8 Lessons Supply Chain Management can learn from Fast Fashion
One of the major trends influencing retail is fast fashion — a business model based on fashion and marketing trends. Supporting this trend is the “fast fashion supply chain,” an approach that cuts lead times from an average of 52 weeks to 26 week deployment and “fast track” capabilities of 13 weeks.
How is retail doing it? Just-Style recently explored how a fast fashion supply chain works, including the struggles retailers and designers encounter. Here’s a look at eight lessons supply chain management and chief procurement officers can learn from fast fashion.
Dual Supply Chains. It’s a fact for every economy: Some products and services are about costs, others are about quality, and still others revolve around what’s fashionable. Not that all three options are exclusive, mind you, but let’s face it, you can usually get two but not all three. To keep from losing cost advantages on products where pricing is key, some retailers run dual supply chains. Fashion items are produced in one, while less trendy items are produced in another, allowing that second group to be produced more slowly, with long lead times and the resulting cost savings.
Centralize work flow. While fast fashion may sound a bit whimsical, with its focus on the latest creation of designers, making it work actually requires a well-oiled and engineered process. That’s where a centralized workflow can help by arranging the development process to best reduce wait times.
Plan and Prep When Possible. Even though fast fashion drastically reduces production deployment time to 26 weeks, supply chain managers still plan ahead for some products. While each season introduces a new trend in jeans, when it comes to manufacturing, you do know a few things: There will be denim jeans, for instance. You can even have a basic prototype of jeans already made, so all that’s required are last minute adjustments and style details.
Establish Long-Term Relationships. Since fast fashion has to move quickly, retailers want to avoid constantly on-boarding new suppliers or manufacturers. That’s why they favor long-term relationships, even though the products themselves are designed to be short-lived.
Use technology in smart ways. Automation and integration of your supply chain is always a smart move, but fast fashion takes advantage of technology in other ways. For instance, manufacturers might do an all-size fit check with 3D prototyping technology, which reduces back and forth sizing modifications.
Take advantage of global sourcing. While fast fashion supply chain management favors long-term relationships, it also values risk management, which means establishing those relationships over a diverse geography. This will provide protection from “unpredictable world events and allow flexibility when assigning or changing production ratios,” Anastasia Charbin, Lectra’s fashion marketing director, told Just-Style.
Of course, it’s not quite that simple, since logistics and time can be a trade-off with global sourcing. That’s the tension created by fast fashion supply chains: Risk management, lower cost, and other supply chain basics can put you at risk of missing the shelves during that short time frame when something is “in style” and when it’s not, which brings us to another key lesson from fast fashion…
Know when to subcontract. Retailers tend to pick one of two options, depending on their size. Option 1: The fully vertical integrated model, where the retailer controls every aspect of the supply chain. Option 2: The house-branded model, where the retailer supervises design and/or the manufacturing through subcontractors. Usually, the more store locations, the more retailers relies on a house-branded model, according to Vertica Bharwaj of the University of Texas at Austin’s Department of Textiles and Apparel.
Source for capabilities. For fast fashion, it’s not as simple as “sourcing close to the retail space” versus global sourcing. It’s about sourcing close to the capabilities, where you’ll have access to both your key materials and a labor pool that understands how to work with that material, according to Achim Berg, a consultant at McKinsey & Company in Germany. In practical terms, that means you’ll have to look at production on a product-to-product basis, he said.
“If a company wants to make cotton dresses, they need to look at sourcing from places that are big cotton producers, have efficient fabric mills and offer low cost sewing capabilities — like Egypt or Vietnam,” Berg told Just-Style.