We analyzed in the previous post the process of digitalization in the sector and how to implement it. We also mentioned that in the next post we would list and analyze the four main applications of digitization according to the executives of the leading global companies in the clothing and fashion industry surveyed by McKinsey in The apparel sourcing caravan’s next stop: Digitization. That is what we will do next. In addition, you can download this incredible and comprehensive report for free at the end of the article. Enjoy it!
1. End-to-end process management.
Today, many supply chain processes and sourcing decisions are managed using email and Excel documents. We would certainly be extremely surprised if we knew the names of many international organizations and fashion brands that are still working with these tools. For several years there have been solutions such as product lifecycle management systems (PLM) but not all companies manage their purchases and productions through this system and many are only now implementing it. Although many times, the system adopted is not much more than an advanced version of Excel.
The end-to-end digitization of systems offers a transformational improvement, centralizing information and processes in a cloud-based system. This implementation generates several key benefits, including “single truth”, reduced errors, clear assignment of roles and responsibilities, real-time visibility of information, faster decision making, seamless collaboration with suppliers, reduced overall time to market, and true customer centrality.
Of course, these benefits are generated and accumulated if companies adopt a change of mentality and a truly “end-to-end” perspective for their supply chain. Only by adopting Product Lifecycle Management with the utmost conviction, rather than using it as a mere tool, will organizations truly achieve customer-centric digital provisioning.
2. Productive capacity planning.
The executives consulted by the international consulting firm gave the planning of productive capacity a preponderant importance among the processes of clothing supply. They stressed the need for greater visibility and versatility as brands adopt multi-country, multi-supplier and dual-supply strategies (generally, the production in Asia of basic items and in nearshoring, the latest trend models).
The objective in this area is to be able to identify constraints in the process immediately or as early as possible, as well as to decide distribution quickly and according to a holistic set of data and decision criteria. Digitally driven capacity planning will require closer collaboration with suppliers. This is usually easy to express, but for cooperation with suppliers to be more than a buzzword, brands will need to integrate their systems with those of suppliers and implement supplier qualification models as the analytical basis governing decision making in terms of sourcing and hiring productive capacity. In addition, they should have truly strategic conversations with them.
3. Common web portals for collaboration between the company and its suppliers.
Early involvement with internal audiences, collaborators from different areas and departments, and suppliers is essential for a positive supply; as well as interdisciplinary collaboration, even between companies from different sectors, but with common projects. The digital platforms that generate this interaction foster exchange and transparency, can facilitate cooperation and thus enable internal and external partners to discuss design specifications, demand forecasts and processes together.
Some software companies already offer generic collaboration spaces on their platforms, including spaces for archives and joint work, video conferences and calendaring, among others. However, we expect to see the emergence of solutions focused specifically on strategic sourcing requirements. These should include consolidated demand data as well as supplier feedback, analysis and strategies across different business units and corporate functions.
Such solutions will enable timely and effective interactions to challenge existing hypotheses about what, where and how to source, making it easier to save time, improve accuracy, and ultimately make better decisions.
4. Integration of the estimated cost into the design with value.
Digitization can help companies and fashion brands integrate detailed product cost information into the design process in real time. It can also provide much more detailed cost element information across the organization. With the advent of a more structured and powerful IT system, there will be an increase in data available and better connectivity throughout the supply chain. This, in turn, will allow value-added design calculations to be much faster, more detailed, and more accurate, increasing their acceptance by design teams. Fashion and apparel brands will be able to integrate sourcing information into their design systems to manage their costs from the start.
Same repeated conclusion.
Although we have been listing and analyzing the many advantages of digitization and how its process will create a new action scenario for fashion brands and their provisioning systems, we will not fail to remind you of our vision: “the digitization of current manual processes has much less transformational potential than the total digitization of the apparel provisioning process and its operating model.” Therefore, we express a resounding YES to digitization, but understood and applied in the supply chain from end to end.
We will meet again in a future article analyzing the present and future of our passion, fashion and retail.
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