How supply chain management in fashion is beneficial for the industry?
What is the role of supply chain management in fashion?
The supply chain is a critical function in most industry. Timely flow of materials to production and flow of finished product from the production site to warehouse and to the customer is what ensures the success of an organization.
Supply chain management in fashion is very important as the fashion retail sector depends on the supply chain to ensure timely delivery of products to customers. The last few decades have seen huge changes in the fashion industry that have changed the face of the industry.
Some of the key factors here include:
The entry of multinational corporations leading to greater competition and easy access to international brands
Fast changing trends, that change at faster cycles than before
The growth of online business, leading to more transactions happening online with fashion retailers selling their product more online
Greater competition leading to price wars
Consumer’s demand for quality
- Being able to sustain profitability in the competitive scenario
The supply chain needs to gear up to meet the challenges thrown up by competition and digitalization. This would ensure that fashion retail outlets can provide its customers with the merchandise they need on time.
Changes in supply chain management in fashion
Fashion retail industry is making changes in its supply chain system to be in line with changing scenario. These changes are a must for every retailer if they want to cope with the challenges of today’s world. Here are some of the key changes that are happening:
Flexibility is the key today. The rigid system of working in one particular way no longer holds good. Competition has ensured that flexibility is the need of the hour. Changes are needed in the system to meet the changing demands of customers. Omni-channel retail is the way forward. Omni-channel brings about a perfect blend between online and offline (brick and mortar). This is how it works – a customer can shop online and prefer to pick up the product at the store. This allows the store to receive more customers who may find something interesting. For the customer, the benefit is visiting a store helps in exchange if he/she wants. In the offline store, there would be kiosks that would allow customers to select products. They can even place orders online and pick up at the store. These changes are happening rapidly and are the order of the day.
Automation is happening everywhere, at the store, at the warehouse, and even at the delivery point. An automated supply chain ensures that things go systematically, accurately and on time. Human intervention is always possible if something goes wrong. Automation ensures faster cycle time and very few errors. Robots and automatic cranes working in warehouses is no longer science fiction, it is happening. The latest trend is drone delivery, which ensures automation even at the time of delivery. This is the trend to watch out for. The fashion industry can serve its customers better by automating the supply chain. Automation also includes the use of ERP software and artificial intelligence systems. Analytics on product movement would be used to plan for production and stocking. This would ensure that products can be delivered faster to clients.
Cloud is where things happen. Earlier computerized systems would store data on the local system, which had to be backed up. Then data started being stored in a server. Today cloud computing is common. Everything is stored on a cloud server online. This ensures that access is available 24/7 and at any place. Computers are no longer required. Tablet and mobiles can be used to work with software. Cloud storage ensures security, speed, and convenience. It easily facilitates online shopping.
Moving with the trend is a must. Trends change rapidly as do customer preferences. While earlier shoppers would wait and watch before adopting a new trend, today trend adoption is much faster. Retailers have to quickly make use of analytics to understand customer buying trends and respond accordingly. The supply chain also needs to be geared up to respond to this to prevent wastage in inventory and losses.
- Quality is all important. Consumers focus on quality. It is needed not just in production, but in every stage of the supply chain. Well defined processes that focus on meeting customer needs have to be implemented in the entire supply chain. Transparency in the sourcing of materials is also happening worldwide. Customers want to know where the input materials are coming from and if the product is sustainable?
Benefits of supply chain management in fashion
When supply chain management systems are geared up to meet changes and the challenges of today’s world, it can ensure better profits for the fashion retailer.
This is how the supply chain would be beneficial in the fashion industry:
It ensures faster turnaround times. Products are available easily for delivery to customers without too much of waiting times.
Effective inventory management is ensured. Storing too much merchandise which goes out of trend is a common problem in fashion. This can be solved by effective supply chain management.
Reduction of risks is an advantage. Supply chain management with well-defined processes that use automation would reduce risks at all stages.
Quality improves thanks to a proper system with robust processes. Quality at every stage means the customer would get the best quality in product and services. This can lead to improved satisfaction and loyalty and more profits.
Overall efficiency improves. This also helps in accuracy while predicting demand, which is critical for the fashion industry.
An effective system that uses automation leads to reduced costs, which translates to savings and greater profits.
- It also ensures better collaboration with suppliers at all stages.
Supply chain management in fashion plays an important role in today’s scenario. It helps the fashion industry to be in tune with changing trends so that they can keep customers happy and improve profitability.