Few industries are as in need of more flexibility and control of production to meet ever-shifting consumer demand than the apparel sector.
To boost returns and respond more quickly to fashion trends and changing customer demands, brands are keen to reduce the time it takes for raw materials to be sourced, production lines to be established and then for the finished goods to be shipped and stocked on store shelves. Long lead times and big orders have long hampered the apparel industry, making flexibility and nimbleness hard to achieve.
But in an industry that continues to be driven by fast-fashion models – and increasingly a demand for improved transparency – brands need the situation to change.
That is why there has been so much anticipation about the potential of digital technologies to transform supply chain operations. This includes applying digital solutions to manual sourcing processes, using technology to build more transparency data across the entire supply chain, and making better use of analytics, artificial intelligence and automation in factories to redesign and digitise processes.
Rather than focus, as they always have, on identifying suppliers and agreeing transactional orders, apparel companies know they must forge collaborations and partnerships with suppliers that offer different functions and products – crucial if they are to be agile enough to give customers what they want, where and when they want it.
Efficiencies at scale
In a 2017 survey
from McKinsey of chief procurement officers at some of the world’s biggest apparel companies, more than 80% said they expect “digitised end-to-end process management” to be the norm five years from now, with cloud-based systems to buy or develop new products, for example. More than two-thirds said they expect to have digitally enabled capacity planning in place, “helping them to allocate production capacity more efficiently and spot bottlenecks earlier”.
A similar number fully expect to be running online portals to build better transparency and collaboration, both with external suppliers and internal teams.
In terms of adoption of digital technologies, it is still early days. But the opportunity to build smart, more resilient and sustainable supply chains is clear. Companies piloting 3-D designs and virtual sampling report a shortening of their sampling process by two weeks or more, reducing the number of samples needed by more than 50%, thus cutting waste and the environmental footprint of production.
Greater use of robotics will also make factories more efficient. In 2018, the Chinese clothing company Tianyuan Garments will open a new factory in Arkansas in the US. Thanks to sewing robots, the facility will be capable of making 1.2m T-shirts a year for the same price as a factory in one of the lowest-wage countries.
A principal concern about digitisation and factory automation is, of course, the impact on factory workers. Over the past few years supply chains have developed on the basis of there being sufficient available low-cost labour for factories in producer countries to satisfy production demands.
McKinsey’s research suggests that in fact automation may roll out in parallel with existing production models, arguing that even when technology exists to enable digitisation, the benefits may not outweigh the costs with production by hand remaining competitive.
Where acceptable lead times are longer, technology may support rather than replace existing workforces – so low-cost labour dependent sourcing does seem set to continue alongside increasing digitisation.
For Anna Maria Rugarli, sustainability director for the EMEA region at the US apparel and footwear company VF Corporation, digitisation is one of the “next frontiers of innovation”. In 2018, one of the company’s brands, Napapijri, will launch a new line of products called Ze-Knit which are digitally knitted. They are not just more comfortable, they also come with “remarkable environmental benefits,” she says, with the digital production process reducing waste by up to 30% compared to a traditional manufacturing system.
However, as with all new technology, it’s what we do with it and not just what it can do for us that is important, says Rachel Kibbe, co-founder of Helpsy, an ethical fashion retailer. “Digitisation offers a different way to help solve problems that exist but must be manned and continuously checked and balanced by humans.
Loss of skills
It’s not just in production where human capital may be lost. A significant fear for Kibbe is the loss of craftsmanship skills in fashion design, as well as a loss of knowledge and jobs in the process. On the plus side, she’s also “cautiously optimistic” about technology that can deal with garment end of life and track textile contents through blockchain technology which would be “huge for recycling and helping to eliminate textile waste”.
Digitisation will shape new business models to tackle environmental and social problems, Rugarli says. But it won’t be just a matter of “how we are producing” but also about “how we embed digitisation” throughout the value chain, connecting it to other emerging trends, such as circular economy. “There is a huge opportunity in the waste industry right now – how textile companies will develop new digital methods to sort and recycle products to be reintroduced into the value chain.”
To take advantage of such opportunities, the industry must evolve fast. And the technologies will need to be adopted at a large enough scale to make the difference required – with careful consideration to mitigate any implications for existing supply chain workers.