Comprehensive Guide to the Fashion Supply Chain
Fashion is one of the most innovative and ever-changing industries in the world. Clothes and accessories come in and out of trend at lightning speed, forcing brands to continuously turn out new styles month after month to stay competitive.
With so much production and demand, fashion businesses must take control of their supply chains to ensure they are getting the right products to the right consumers at the right time. New tools and technologies are helping fashion companies optimize their operations and boost their bottom line.
Explore everything you need to know about the fashion supply chain in this comprehensive guide.
What Is the Fashion Supply Chain?
The fashion supply chain refers to the network of businesses that work together to produce clothing and accessories. It encompasses the entire process, from the product idea to production to sales.
Businesses should aim to increase transparency and optimize communication at every level to establish the most efficient supply chain possible. The more refined and sophisticated your fashion company's supply chain management processes are, the more you can boost profit margins and satisfy your customers.
With so many moving parts and complexities involved in the fashion supply chain, businesses can benefit from using digital tools that help them plan, order and track their materials at every stage.
The Fashion Supply Chain Process
For apparel, footwear and accessory companies, the supply chain typically consists of the following:
1. Sourcing raw materials: The first step is sourcing raw materials or parts for the products. Fashion brands may work with multiple vendors for the materials they need, such as fabric, dyes, hardware etc.
2. Planning and design: Merchandisers, designers and tech designers create plans to manufacture products, keeping material availability and overhead costs in mind. They establish the specs for each product that a manufacturer will follow during production.
3. Manufacturing: A company will produce or assemble the products at a manufacturing facility using the raw materials often sourced from other providers.
4. Distribution: Distribution consists of different channels, including wholesalers, retailers and e-commerce, that are responsible for supplying products to consumers or other businesses. This step involves product handling, shipping and extensive transportation networks.
5. Warehousing: Inventory and material storage is an important link in the fashion supply chain. Warehousing plays a crucial role in the order fulfillment process.
6. Fulfillment: The process of receiving, processing, and delivering orders is called fulfillment. This could take place at a distribution center, retailer, or warehouse.
7. Sales, delivery, and customer service: Getting products to customers is the ultimate goal of the fashion retail supply chain. The final step is ensuring consumers receive the correct products in a reasonable time frame and that proper customer service operations are in place to handle questions, returns or exchanges.
With so many businesses and vendors working together, the clothing supply chain can easily become convoluted. Fashion brands can turn to software solutions to help them gain better clarity over these processes to create the most efficient and effective supply chain possible.
Why Effective Fashion Supply Chain Management Is Crucial
Fashion is a massive, highly competitive industry. The global apparel market was worth a whopping $1.53 trillion in 2022 alone. Brands must take action to differentiate themselves from the competition and meet ever-changing consumer needs. One of the primary ways to do this is by investing in your supply chain management operations.
The fashion industry is known for being extremely fast-paced. Certain garments can be in high demand one season and fail to move off shelves the next. Brands must take action to improve supply chain efficiency and get the right products into buyers' hands when they want them.
Failing to effectively manage your company's supply chain could result in the following:
- Lost revenue: Inadequate supply chain management can hurt your business's bottom line.
- Unhappy customers: Consumers want your products in a timely fashion (no pun intended). Disruptions, stockouts and other supply chain hiccups can frustrate customers and inspire them to turn to a competitor.
- Damaged reputation: Delayed deliveries and quality control issues caused by poor supply chain management can negatively impact your business's reputation among your audience in the long run.
In such a volatile market, fashion brands cannot afford to neglect their supply chains. Proper management can provide greater insights into your various vendors and suppliers so you can maximize your brand's profitability.
6 Benefits of Fashion Supply Chain Management
Here are the key benefits of effective supply chain management in the fashion industry.
1. More Visibility and Control
Fashion brands can gain better insights into their entire supply chain with the right management solutions. Monitoring the flow of goods is easier with the help of software that offers more visibility into each phase.
With greater visibility and transparency into your supply chain processes, you can enjoy more control. This can help your management team easily identify and mitigate potential bottlenecks before they become costly issues.
2. Better Communication with Your Suppliers
Another advantage of fashion supply chain management is improving communication with each vendor. When your business has systems in place to monitor everything from the availability of raw materials to inventory forecasting, your management team can improve collaboration with each supplier.
Better communication means greater insights into the entire supply chain and improved logistics at every level, from sourcing to delivery.
3. Improve Inventory Quality Control
With greater communication between your fashion brand and its suppliers, you can establish meaningful relationships with these vendors. You can also work together to establish clear quality standards. If one link in the supply chain encounters an issue pertaining to quality, your business can quickly address the problem and create a plan of action to minimize delays and lost profits.
4. Boost Efficiency at Every Stage
With help from automated supply chain management tools, fashion companies can supercharge their overall efficiency and get their products into consumers' hands faster.
The right management solutions can be highly beneficial for your warehousing operation. With extensive tracking information and ongoing data collection, your company can easily identify areas that need improving to reduce costs and inefficiencies.
5. Save Time and Money by Reducing Human Error
Fashion brands can effectively save time and money by investing in the right supply chain management solutions. Automated tools can help your company reduce errors and delays, which are two of the leading causes of lost profits throughout the supply chain. By minimizing mistakes and keeping products moving through each phase, you can decrease the time and money you put into correcting human error.
6. Improve Customer Experiences
Ultimately, fashion businesses should invest in their supply management operations to provide buyers with the best products and services possible. With more control over each process and fewer inefficiencies, your company can prioritize meeting market demands and providing excellent customer experiences.
The right management tools will also allow you to offer greater order transparency so consumers know exactly where their goods are and when they can expect them. Happy customers mean greater brand loyalty and increased revenue for your company.
Common Fashion Supply Chain Challenges
Here are the most common fashion industry supply chain issues that brands encounter.
Sustainability
Fashion supply chain sustainability is more important to shoppers than ever before. In fact, nearly half of consumers are willing to spend more on products that are socially responsible or sustainable.
Brands must do their due diligence to ensure their suppliers engage in ethical and sustainable practices. Having an environmental, social and governance (ESG) strategy with compliance reporting can help businesses meet important sustainability standards.
Trend Lifecycles
Trends in apparel, footwear and virtually every other branch of the fashion industry are continuously changing from month to month. Without the right supply chain management tools, keeping up with trend lifecycles and ensuring your company has the inventory to meet consumer demand is extremely challenging.
Macroeconomic Issues
Macroeconomic challenges, such as inflation, natural disasters, or geopolitical tension, can directly impact your fashion business's supply chain. From sourcing raw materials to shipping overseas, many global factors can affect how efficiently your supply chain is able to function.
Transport and Delivery
Transport and delivery operations can be a challenge for fashion companies. The primary modes of transport include maritime, road, air and rail shipments. Tracking your products and customer orders across all of these modes can be highly complex. If you do not have the proper management tools, losing track of your goods could result in lost revenue and dissatisfied customers.
Fashion Industry Supply Chain Best Practices
Fashion brands can use the following best practices to stay ahead of the curve in this highly competitive industry and optimize their supply chain:
1. Utilize integrated technologies: Fashion companies that invest in integrated technologies can enjoy greater visibility across nearly their entire operation. From future planning to inventory management to tracking deliveries, modern software solutions are delivering unparalleled access to your company data and product lifecycles.
2. Prioritize traceability: Supply chain visibility and transparency are key to coordinating with all of your suppliers, ensuring everything is ethically aligned with your business at every stage, and addressing concerns promptly. Integrated applications and tools can make product lifecycle tracking easy.
3. Choose ethical suppliers: Your fashion business should spend time getting to know each supplier and their practices. Ask about their working conditions and how they approach waste management and sustainability. Some suppliers may have special certifications to demonstrate their commitment to ethical and fair business practices.
4. Optimize inventory management: Processing inventory is especially challenging for businesses in the fashion industry as items go in and out of style quickly. Inventory management solutions can help companies strike the right balance between supply and demand to optimize their stock levels.
Emerging Fashion Supply Chain Trends
Much like fashion itself, supply chain trends are always changing to become more intelligent and effective. Explore the following emerging trends in the fashion industry supply chain you're likely to see in the future.
Sustainability Initiatives
Businesses are capitalizing on new sustainability initiatives that help reduce negative impacts on the planet and ensure suppliers are abiding by ethical practices. As more consumers demand more from the businesses they shop at, fashion companies can benefit from getting behind the movement and taking action to cut down on waste and source raw materials sustainably.
Artificial Intelligence
Artificial intelligence is transforming how fashion companies are managing their supply chain. AI-powered technologies give brands more insight into every level of their operation. With real-time data available at your fingertips, your business can easily identify weaknesses in your supply chain and use historical insights to determine the best course of action.
Predictive Models
Fashion supply chain software is helping supercharge how apparel and accessory brands prepare for the future. Predictive models use AI and machine learning to accurately anticipate your company's needs, from inventory management to raw material availability.
Technology and the Supply Chain in Fashion
Supply chains in the fashion industry can benefit from implementing the following technologies.
Enterprise Resource Planning
Enterprise resource planning (ERP) software allows fashion companies to oversee their entire organization. With a comprehensive view of your business at your fingertips, you can easily manage daily operations with greater insight, accuracy and efficiency.
ERP solutions can streamline how you manage your entire operation, from accounting to manufacturing to human resources to procurement.
Product Lifecycle Management
Product lifecycle management (PLM) solutions are particularly advantageous for apparel businesses. They offer greater insight into the entire lifecycle of your products, from the initial design idea to how consumers throw away or donate a product when they are done with it.
Having a PLM tool allows your brand to get products to customers quicker with the help of data-driven decision-making.
Electronic Data Interchange
An electronic data interchange (EDI) is one of the best ways to supercharge your business's overall efficiency. These solutions streamline communication between your computer systems to do the following:
- Improve collaboration
- Speed up order processing
- Shorten shipment times
An EDI solution can help your business with retail compliance, simplify order management and enhance your customer service operation.
Shop Floor Control
Shop floor control (SFC) systems offer more visibility into your fashion business's performance data. They are highly beneficial for improving productivity and efficiency at every phase of the supply chain.
SFC solutions can help your fashion brand track order release, scheduling and progress to uncover potential issues or loopholes in your production. These systems also help improve resource planning and offer real-time data about every phase of the production cycle.
Contact CGS for Fashion Supply Chain Management Solutions
Is your fashion or footwear brand looking to streamline and optimize its supply chain?
The BlueCherry® Enterprise Suite from CGS is here to take your supply chain to the next level with integrated omnichannel solutions. Gain greater control and insight into every aspect of your operation, from idea conception to sales. You can work with a CGS BlueCherry® expert to get real-time visibility into your enterprise and fine-tune your supply chain to supercharge your fashion brand.
To see our fashion supply chain management solution in action, request a demo of the BlueCherry® Enterprise Suite today.
