It is clear that digitization has enormous potential to accelerate transformation in apparel provisioning. But where are textile and fashion companies and their suppliers today on the road to digitization?
We know, and the results of surveys by international consulting firms confirm it, that the digital maturity of organizations and their supply chain is insufficient.
Technology in textile production.
In those same reports, it is predicted that digitalization will generate the greatest impact in the management of end-to-end processes, in the design with added-value and in the planning of productive capacity. In the next 5 years, the impact of digitalization will affect or should affect the following managements and processes of clothing and fashion supply:
Management of the end-to-end process | Design with value, through the integration of the estimated cost in the design process | Workflow with strategy by category | Analysis solutions by category | “Open book” and analysis of the estimated cost as a framework and support for negotiation with suppliers | Monitoring of the supplier matrix and volume allocation | Planning of production capacity | Advanced intelligence for the selection of the country of origin and supplier | Collaborative web portals for the company and its suppliers | Pre-production process; samples, approval and negotiations with suppliers | Production management – dispatch and shipment and its follow-up | Monitor supplier performance and development and expense visibility | Tracking of social, environmental and compliance standards | Electronic sourcing events: e-RFX, electronic catalogs and e-auctions | Automatic replenishment, associated with the ERP system.
Textile production technology and digital maturity
Sourcing executives rate the current digitization maturity of their organizations as low. Not surprisingly, the large players surveyed see themselves as more mature in digitization than medium and small businesses. This result was repeated in all areas, but the difference between larger and smaller firms was especially pronounced in terms of electronic sourcing, decisions about supplier countries, integration of estimated cost in design and negotiation, collaborative portals with suppliers, and greater use of technology in textile production.
This indicates the need to invest in and integrate the latest process management technologies. Returns can be significant: some software suppliers claim that the new generation of PLMG systems can increase productivity by up to 10 times.
Predictive analysis, a demand to supply model
There is also a huge gap between aspirations and current maturity in the field of planning optimization, where predictive analytics can drive efficiencies and help companies meet customer needs. Companies can close another important gap by linking demand to supply through ERP systems. Integrating currently isolated systems in this way will help companies create a single version of purchase order information, allowing automated restocking and reducing time-to-market and the possibility of error.
The potential is exciting, but so far apparel and fashion companies have struggled to close the gap; to date, their investments in the digitalization of sourcing have achieved low success rates.
Investment in digitization vs. success
¿Qué se interpone en el camino hacia un mayor éxito e inversión en digitalización?
When sourcing executives were asked to identify the main challenges for translating investments into impact, we found three prominent barriers: system architecture, supplier interface, and data quality.
This conclusion is not surprising, considering the widespread use of email and Excel sheets in apparel supply chain management, both internally and with external partners. Where more advanced tools are used, these are rarely integrated into the product development stages, thus limiting their potential. To improve performance, companies must create the next generation of systems that go beyond the simple individual application of technologies to existing manual processes.
Other relevant areas identified in the survey include internal capabilities and talent management, as well as capabilities on the supplier’s side; both were identified as particularly profound difficulties for medium sized players when digitizing their processes and using technology in textile production.
Companies must encourage a real change of mentality within their organizations and in their supplier network. This is critical in order to generate a transformation and move from a transactional approach to supplier relationships to true strategic partnerships; from sourcing at the lowest FOB price to managing the creation of value and from the focus on supply to the focus on the customer. The required change of mentality is not limited to sourcing departments and suppliers, but extends to all other instances of product development, production and logistics.
Digital suppliers for a digital customer
While sourcing executives award low scores to their own organizations in terms of digitization maturity, they are no more positive in their supplier qualification. They qualify as low the technology in textile production and the current digitization maturity of their suppliers. The two main problems they have identified are interface management and tracking in manufacturing and distribution.
This last result is not at all surprising since the sensors for the optimization of the production line are just beginning to be installed, have not yet developed common standards for the exchange of data (a closed mentality and distrust to do so prevail) and old machines cannot be easily transformed and turn towards an Industry 4.0 immediately and without investment.
Textile Technology and Industry 4.0
Regarding textile technology and its growth towards a 4.0 Industry, both American and European executives surveyed ranked China as a clear leader in the digitization of fashion supply. While U.S. executives ranked the U.S. second, European executives ranked Turkey second.
Source The apparel sourcing caravan’s next stop: Digitization.