Supply Chain
How to determine the best strategy for your Fashion Supply Chain
Like many other things, the supply and value chains of the fashion industry are subject to constant and currently rapid change. Whereas years ago the primary focus was on globalisation, today other aspects dominate the discussion in industry and trade: for example, we discuss integration, disintegration or virtual integration of a supply chain. Other strategic topics are aspects such as omnichannel supply chains, sustainable supply chains or supply chain transparency.
Many of these dimensions are highly relevant for the strategic positioning of a company. At the same time, these aspects have a massive impact on processes as well as on infrastructure and systems or applications.
Omnichannel and digital pure players
The challenges for companies are growing daily. In the fashion industry, companies are coming under increasing global competitive pressure combined with advancing digitalisation. So-called digital pure players are becoming increasingly important and setting new trends. In addition, vertical suppliers are almost omnipresent – they are simply omnipresent on all available channels.
The key points of the blog
In which application areas do companies need to make rapid progress?
In which application areas do companies need to make rapid progress?
Time-to-market
Accelerate time to market
Systematically accelerate time-to-market through extensive integration of processes.
Automation
Use automation
Use ALL available automation potentials to secure processes, accelerate and increase efficiency.
Value creation and sustainability
Value creation and sustainability
Take a global and holistic view of value creation based on division of labour and relevant sustainability issues, such as social compliance, carbon footprint or waste reduction.
Merchandising and planning
Merchandising and planning processes
Optimise data-driven merchandising and planning processes.
Individualisation
Individualisation
Reaction to increasing individualisation and the resulting ever smaller batch sizes. A new idea comes into play here: scaling is required in both directions.
Timing the realignment as early as possible
Timing the realignment as early as possible
The timing of the realignment in the company plays a key role: a relatively early realignment of the internal and external flows of goods and values (supply chain and value chain) results in numerous opportunities. With effects on the internal organisation, a completely new view of processes and system architecture, the rethinking of integration and collaboration as well as adaptation of strategic action patterns of the «digital natives». A clear IT architecture, for example, enables targeted analyses and thus promotes decision-making processes in the specialist departments and in management.
We are therefore entering a phase of supply chain development in which the established players in industry and stationary-driven trade must learn from the online pure players how to optimise data-driven processes! Conversely, the online pure players need to learn how to gain increasing control over a globally fragmented supply chain and orchestrate it through an appropriate internal organisation.
In the context of a major transformation initiative of a well-known retail company, it became apparent to me early on that not only a systemic realignment was needed, but also an organisational one. The «traditional» purchasing organisation, which consisted of separate procurement units for stationary and distance selling, was transformed into an omnichannel organisation. Not without challenges for the employees, who now had to approach topics such as assortment, timing or replenishment with a significantly broader perspective. And what was remarkable for me was that the impetus for this courageous step even came from the employees themselves, who had a very clear view of future market requirements.
Requirements for action for companies
For companies, the following requirements for action can be derived from this:
Review strategy
Supply chain and omnichannel
Review and optimise your strategy with regard to supply chain and omnichannel approaches!
Question solution architecture
Long-term competitiveness
Question your current process and solution architecture with regard to long-term competitiveness and do not be too optimistic about the time you have to transform.
Develop target vision
Risk-controlled to the target state
Develop target vision and transformation scenarios to get to the target state quickly, risk-controlled and efficiently.
Conclusion: Time pressure makes holistic solutions necessary
Conclusion: Time pressure makes holistic solutions necessary
Time pressure is indeed necessary in order not to lose touch: As part of my teaching activities at the Niederrhein University of Applied Sciences, I deal with many of the above-mentioned topics, especially concerning the consequences for future global supply chains. Here, too, we can perceive an increasing global pressure to act with regard to the realignment of supply chains. Last but not least, the pandemic has clearly shown us how quickly consumer habits can change and, on the other hand, how vulnerable our global supply network has become.
For us, this was an additional trigger that accelerated the development of industry-specific Instant Platforms and made them urgent as a customer offering. A state-of-the-art architecture of processes and solutions that are fully delivered for industries such as «Fashion, Luxury Goods and Lifestyle». Simplifying and accelerating transformation is at the heart of what we do.
Within the framework of this blog series, we want to take up various topics that are currently moving the fashion industry and fashion retail and also discuss them with you. In the next episode, we want to look at the triggers and options for a transformation journey and explore the question of what contemporary transformation must look like tomorrow.
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