Managing the flow of goods within the apparel industry requires an extensive and well-established supply chain network. Since this particular industry is insanely fast-paced, any problem within the supply chain can lead to a loss of sales for the business. Supply chain management can really be a deal-breaker for an apparel business. The management of resources in the hands of a business is no small deal. In the apparel industry, there are frequent trend changes and products that require a supply chain that adapts to the volatility of the industry.
While optimizing the supply chain operations can be challenging in an industry such as apparel, professional help for the same can do more good for your business than you think. There are countless benefits of having an optimized supply chain. And numerous case studies of businesses show that by investing in better supply chain management, the prospect of business growth improves significantly.
Stages of Operations in an Apparel Business
Here, we have broadly classified the stages that an apparel business has:
Designing the Garment
Design is the first step that happens in apparel manufacturing. Fashion designers curate design pieces, keeping in mind the current trends and consumer demands. And this is where it all begins. The designers also specify the type of fabric, the details, and the print or embellishments, which are taken care of in the next few steps. The design and details by the designer serve as a kind of blueprint, which is used to determine the details of the production of the clothing design.
Production of the Garment
The next step after the designs are finalized the production of the clothing. For the production, the appropriate raw material is sourced or produced based on the details provided by the fashion designers in the previous step. Next, the raw materials are used to manufacture and put together the designs. All the finishing touches are added to the design and then it is all ready for the next step.
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The next major step is the distribution of the clothing items. The items are dispatched to retailers or distribution centres so that they can eventually reach the customers. This is a huge step that requires the extensive support of groundbreaking logistics that helps distribute the clothing to appropriate locations across the country or countries.
Why Does the Apparel Industry Require Supply Chain Management?
Since the apparel industry is huge, it produces millions of garments every day and has millions of workers employed globally. One of the biggest challenges that this industry faces is the increasing cost of garments production. Another cost factor that troubles businesses is apparel is the ever-increasing cost of local and imported raw materials.
Countries, especially in South Asia, like China, India, Bangladesh, Pakistan, Vietnam, etc., offer competitive prices for apparel manufacturing to businesses within this industry. Brands from all over the world outsource garment manufacturing from these countries to minimize their production costs and reap greater profits. For the same, managing the supply chain for the business becomes challenging. The raw materials, manufactured products, and ready-for-delivery products are constantly travelling from one place to another by the time they reach the end consumer. Therefore, businesses require an optimized supply chain so that there is no disturbance in these and other operations within the business.
An efficient supply chain can help you to minimize your direct and indirect costs and can improve the visibility of your supply chain as well.
Types of Apparel Supply Chain
There are three major types of supply chains that keep the apparel industry working:
Push Supply Chain
In this type of supply chain network, there will be analysts who project demand for your products, and once they come up with a conclusive analysis, they push your products to the retailers based on it. Demand forecasting is an essential feature of this type of supply chain network and you will require dedicated professionals who are experts at analyzing key metrics to forecast the demand. The suppliers prepare for an increase or decrease in demand accordingly. For example, when the seasons change, the retail stores display winter clothes or summer clothes. This is done after calculating the possible demand that a particular season can witness for the particular product.
Pull Supply Chain
In a pull supply chain, the demand gets created first and then the product is created. This reduces the cost of keeping the inventory that would not sell. The pull supply chain network might work for people who are interested in minimizing costs and inventory space. However, this strategy could also be risky as you might not have enough inventory to sell when the demand for the product does come up. Meaning that you won’t be able to meet consumer needs when it arises.
Hybrid (Push-Pull) Supply Chain
Imagine the combination of a push supply chain and a pull supply chain. A producer may keep products that are finished at a distribution centre and use them when the demand for it arises. Likewise, a manufacturer may keep a store of raw materials to quickly fulfil demand in case it arises in the future. This type of supply chain uses up the advantages provided by both types of supply chain and combines them to provide the business a supply chain network that might just work for them.
Apparel Supply Chain Challenges
In the apparel supply chain, there are many challenges that are unique to this industry specifically. Here are the top challenges that the industry faces:
Because of many unpredictable factors, demand forecasting within the apparel industry is quite difficult. And inaccurate or lack of demand forecasting can bring up several challenges in effective supply chain management. Some of the negative results that inaccurate demand forecasting can have on the business include inventory overflow, inventory being understocked, etc. This will evidently lead to the customers being unsatisfied with your business, which could hamper the image of your business.
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Trade wars can cause problems keeping the supply chain in check. All around the world, there are some countries that are involved in trade wars. Some of the consequences of trade wars include increased tariff costs, custom duties and import charges, and these create even more challenges for the businesses.
Waste management is a serious issue that the apparel industry is facing. Millions and millions of tonnes of apparel waste are being produced year after year and being discarded in landfills or random places. There’s a huge environmental impact that the industry is contributing to, and businesses, independently and collectively should take the responsibility of solving this issue.
Poor inventory management and zero transparency can be the result of some serious supply chain issues within an apparel business. A poor supply chain will lead to a host of problems, including bad inventory management. When the aspects of a supply chain are not optimized, there could be confusion/miscalculations about the inventory, which can lead to taking up more space than is needed in the inventory or vice versa.
Human Rights Violations
Since the apparel businesses frequently outsource their operations in countries where they can get the manufacturing done for cheaper, there have come instances of human rights violations from the production plants of prominent apparel businesses. This is a vice that many apparel businesses need to overcome and work on.
Supply chain management in the apparel industry is extremely important to keep the operations going on efficiently. A smooth apparel supply chain can ensure that the processes are happening at the right pace and that the demand can be met more optimistically. For professional supply chain management, many apparel businesses rely on providers like AWL India, who use their experience, resources, and technology for groundbreaking supply chain transformation. Invest in professional supply chain management if you are an apparel business looking to fill up the gaps within your supply chain and improve overall operations.
About the Author- Dr Muddassir Ahmed
Dr MuddassirAhmed is the Founder & CEO of SCMDOJO. He is a global speaker, vlogger and supply chain industry expert with 17 years of experience in the Manufacturing Industry in the UK, Europe, the Middle East and South East Asia in various Supply Chain leadership roles. Dr. Muddassir has received a PhD in Management Science from Lancaster University Management School. Muddassir is a Six Sigma black belt and founded the leading supply chain platform SCMDOJO to enable supply chain professionals and teams to thrive by providing best-in-class knowledge content, tools and access to experts.
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