Even as the fashion industry and sector are facing an unstable and complex reality, we recognize that supply professionals have high hopes that they will be able to generate and develop the tools and structural responses to successfully manage this situation.
What is the future of the supply of fashionable clothing and accessories?
In previous posts, we analyzed McKinsey’s report and said that when managers of global apparel and fashion leading companies were asked to choose one word to describe the future they envisioned for the industry, the most frequently chosen were “flexible,” “fast,” and “transparent”. Not only that, they all confirmed that they would leverage the benefits of digitization to improve efficiency, predictability, decision making and accuracy – not just in the delivery process, but throughout the business.
In this last point lies the importance of what we have been analyzing in all the previous articles about the current situation of the supply chain and its digitization process.
Digitization applied end-to-end to the process, from the first to the last link in the chain, will allow companies and fashion brands to be faster, more transparent and much more flexible.
What structural changes are expected in the sector generated by digitization?
When McKinsey approached fashion executives about this, nearly 90% of them predicted significantly greater investments in technology between now and 2030, and a large majority of them expected significant reductions in pre-production and manufacturing times and deadlines, as well as greater flexibility in the allocation of purchase orders and products.
Most executives also predicted a reduction or rationalization of the supplier portfolio due to the requirement that they comply with certain digital capabilities that make integration possible and the generation of strategic relationships for long-term continuity.
It is very important to remember that among fashion leaders the competitive advantage, generated by digitalization, most appreciated and considered as fundamental is the increase of speed and versatility in the production process.
Purchasing offices must be integrated and digital from end to end.
Driven by the phenomenon of digitization, those responsible for the supply chain and sourcing at origin expect significant changes in the configuration and role of the purchasing and sourcing office at origin.
Strategic relationships and closer, technology-driven collaborations will enable more direct communications and total integrations between buyers, designers, merchandisers at origin and suppliers. To all this we must add the automation of manual processes and integration with third parties – forwarders, quality inspection companies, agents, and others – which could result in a reduction of collaborators at the sourcing point.
If the objective is to generate a significant impact, we must focus so that the digitalization of the purchase and production of clothing is firmly focused on improving the agility and speed of supply. Most organizations and fashion brands understand that they must increase investment in the supply chain digitization process if they are to remain market leaders or become one in the future.
Collaboration and strategic relationships with suppliers
Digitization and integration with suppliers will achieve long-term, closer, collaborative relationships with shared goals between brands and their strategic vendors. Through this, an optimization and a reduction of the number of active and portfolio vendors will surely be achieved. It is now more important than ever that apparel companies concentrate on those strategic suppliers that have the strong conviction and ability to actively contribute to improving the supply chain using digital technology.
In a global world characterized by rapid change, with a new generation of intelligent consumers and greater competition, there is no time to lose. We need to start digitizing the supply chain, including offices at origin, right now. The market is relentless!
Do you share this view?
To conclude, here are the links to all the latest articles where we have analyzed this exciting process and the challenge it poses to sourcing and procurement professionals:
Digitization, the next stop for sourcing
Fashion sourcing in an uncertain world
Sourcing and the new origins of fashion
The new model of fashion sourcing
Digitization in fashion means speed
Customer-centric digital provisioning
Digitization, the next source of fashion sourcing