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05.29.18 | Comments

Tailoring the Apparel Supply Chain

apparel supply chain

A successful supply chain strategy has become an essential key to success for apparel companies as they continue to build their brand. To provide the latest styles to their customers, supply chain partners should be an extension of the company’s business and service, with the ability to contribute to a good customer experience. Today’s consumers are looking for quick and uncomplicated gratification while they’re shopping for the latest fashion, whether it’s online or traditionally through brick-and-mortar stores1. Regardless of the channel, an apparel company’s supply chain should be tailored to fit the evolving needs of consumers.

In Stock Merchandise Challenges

The apparel industry is facing various supply chain challenges. According to Accenture, sourcing and production costs have continued to steadily increase over the past two years, heavily impacting margins in the apparel industry2. Additionally, companies have to compete to deliver goods in a timely manner to stock all of their channels to meet customer’s expectations for quality and speed. To meet demand and create cost efficiencies, companies are analyzing their distribution center locations, fulfillment strategies, and transportation models.

Speed-Critical Challenges

Fashion and apparel has become speed-critical as trends change at a rapid rate. Apparel companies must forecast demand and take into account surges and seasonality. Today, full-price items sell through at a rate of 60 to 80 percent. Once items are marked down, margin losses become inevitable which is why aligning inventory is so important for apparel companies. Insufficiently aligning production volumes with customer demand has significantly impacted stock and related markdowns. For instance, a delay in delivery of one or two weeks will drastically affect the product, which has an average planned lifecycle of eight weeks3. With seasonality and trends changing rapidly, lifecycles of products should be strategically planned in advance, beginning at production.

Aside from inventory availability across channels, companies also have to be conscious of their fulfillment strategies post purchase for e-commerce consumers. E-commerce continues to grow, with $24.2 billion of apparel and accessories sales made online in 20174. From distribution center to doorstep, speed, accuracy, and visibility are essential for a seamless and positive customer experience.

Improving The Experience

Although there are challenges facing the industry, there are ways to evolve and innovate to provide exceptional customer service. Accenture recommends that to stay competitive, apparel and fashion companies should shift focus to look for opportunities for value creation. In particular, the report recommends:

  • Increasing investment in product innovation
  • Improving time to market and delivery reliability
  • Better aligning buying and production volumes with actual consumer demand
  • Paying attention to social and environmental responsibility in production
  • Strengthening or maintaining product quality compliance and standards

Implementing these recommendations can uncover new opportunities to identify and improve efficiencies, which will ultimately create value to the end customer as well5. Working with an international logistics provider can help provide the visibility and expertise in areas to continue to innovate. Despite challenges and changes in the industry, a successful supply chain can contribute to brand loyalty growth. Collaboration with supply chain partners and vendors is essential to provide a seamless customer service.

Related

Sources

  1. https://apparelmag.com/5-things-know-about-2017-apparel-supply-chain
  2. https://www.accenture.com/t20171114T071812Z__w__/us-en/_acnmedia/PDF-65/Accenture-Strategy-DD-Sourcing-Whitepaper.pdf
  3. https://www.accenture.com/t20171114T071812Z__w__/us-en/_acnmedia/PDF-65/Accenture-Strategy-DD-Sourcing-Whitepaper.pdf
  4. http://www.inboundlogistics.com/cms/article/extent%20-of-e-commerces-differing%20-impact/
  5. https://www.accenture.com/t20171114T071812Z__w__/us-en/_acnmedia/PDF-65/Accenture-Strategy-DD-Sourcing-Whitepaper.pdf

Retail, Supply Chain, Transportation, Warehousing

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