The fashion industry is working on digitalizing its supply chain. And that's a good thing. The continuous relocation of production to ever-cheaper countries does not change the outdated manufacturing processes, which are based far too much on mass production and manual labor. To survive, production must finally become faster and more time-optimized instead of always cheaper.
The Assyst Fashion Forum 2018, which took place in Munich in July, had a clear message: Many major brands are now working on the stringent digitalization of their supply chain. They have recognized that without a dynamic and flexible supply chain, companies in the omnichannel business will not be successful in the future. For decades there has been no investment in new, more efficient production and sourcing methods. As long as manual work was still cheaper somewhere, this was not necessary. The supply chains of fashion companies are usually extremely fragmented, non-transparent and cumbersome. Product development takes up to 15 months because the obligatory coordination processes with remote production regions have their pitfalls. Up to three samples must be sewn, sent and inspected.
Respond quickly to trends? Offer individual products? No way. The customer and his actual wishes only appear at the very back of this process, often only when it becomes clear that he will only buy the collection at a discount. So how should the collection hit the mark if the ideas for it are already one year old? Summing up this idea, keynote speaker Hans Peter Hiemer from the consulting firm B4B BusinessforBrands said, "High stock-keeping is proof of not knowing of real consumer wishes.” Instead of finding new structures that are closer to the market, companies are working to tie sales to them and increase margins. Hiemer noted: "Verticalization serves as compensation for market saturation." It was always thought from the product and how to improve the entire added value, but never how to put the customer at the center of all measures.
Microfactories close to customers, a digital supply chain and product development, AI models in market analysis and production are the solutions of the future. Eventually new direct-to-consumer models will replace the classic brand-retail-consumer models. "Relevant and individual offers can only be created on the basis of demand,” said Hiemer. Data archives and algorithms have long been worked on to make better personalization possible. Amazon is developing this, as are the big fashion online retailers. Hiemer made a simple calculation: "Only because of the basic mechanics of our industry do we have to calculate with enormous markdowns. If we didn't have this, we could use our capital differently; we could produce in Europe."
Others have been proving for years that it can be done faster: Asos needs 25 days from idea to product, there is no stock-keeping, instead of mass-production it offers small series. Zara is even faster with just one week. Inditex has built up an agile production network in North Africa for this purpose. North Africa has high wage costs in international comparison, but it is still worth it, because it is close to Spain and trends need speed to have a chance with the consumer.
The phrase “fast fashion” must be redefined. Not all fast is bad and unsustainable. In fact, shorter reaction times could finally help to move away from the one-size-fits-all principle of mass production towards a demand-oriented, individualized and thus even more sustainable industry.