Fast fashion: Quick and flexible decision-making is key

The management of fast fashion supply chains is not just about maximising speed to market, it is about flexibility too.

 

 

Retailers have had to make their supply chains and decision-making sufficiently quick and flexible to cater to consumers shopping with a 'buy now, wear now' mentality.

 

This, says Munir Mashooqullah, founder and president of Synergies Worldwide, is putting pressure on retailers to constantly update their inventory. The global apparel supply chain management company has offices in countries such as the US, Bangladesh, Britain, China, and India.

 

Capturing the latest trends in the shortest possible time and in the most cost effective manner requires a fast fashion supply chain whose key features are integration and communication, explains Timothy Speldewinde, head of Sri Lanka based MAS Fabrics and managing director of narrow fabrics specialist Stretchline Holdings.

 

“No garment can be created without every component coming together in the right design concept, colour, quality and timeframe. For this to be possible the entire supply chain must be integrated so that it can align with customer demand.

 

"Integration is also key to ensure the flexibility and agility needed to respond to changes in consumer demand and trends.”

 

Successful fast fashion retailers have learned to manage two distinct supply chains, adds Stefano Turconi, a strategy lecturer and researcher at the London Business School in the UK.

 

"The first chain provides 'high-volume basic' items, such as T-shirts and sweaters in classic colours like black, that are in steady demand, and so speed is less of a concern than finding the most cost-effective suppliers, often in lower-wage countries.

 

"The second supply chain provides garments in trend, in demand for only a few weeks. These items are produced or outsourced in smaller volumes and with considerably shorter lead times."

 

Within these fashionable items, retailers such as Zara design product lines with several variations of each item manufactured in limited quantity. For instance, a designer might create a line of dresses with four to six variations but only the first variation goes into production.

 

When stores sell out of that variation, Zara begins producing the second variation, and so on, limiting the leftover inventory: "It's a way to ensure longevity of a specific line, creating a sense of scarcity and avoiding costly markdowns," he explains.

 

Multifaceted decision-making

 

Yet, the successful management of efficient and responsive supply chains ultimately relies on a multifaceted decision-making process that continuously adjusts the direction of the company to adapt to changing demand.

 

"If you have a Ferrari but no sense of direction, you may just get faster than anyone else to the wrong destination," Turconi says. Retailers "need to be clear for which products they would benefit from responsive supply chain; speed is not a solution that feeds all."

 

Mashooqullah agrees: "If you are too structured a company, it is still difficult for you to be in a fast fashion business."

 

He also stresses the importance of booking manufacturers' capacity in advance, and helping the manufacturers ensure they have enough fabric to cope with planned production, especially if that material must be imported.

 

"That's what shortens the supply time - making the right decisions on raw materials," he says.

 

Speldewinde agrees. "Understanding the value chain behind every garment, that is, the entire process from design to delivery, is what is key for all partners including the retailer, the manufacturer and the supply chain.

 

"This way every stakeholder can contribute towards eliminating any waste and delay and ensure that every connecting link in the value chain works in tandem with each other."

 

Another area where effective decision-making can speed supply chains is reacting to poor sales of a product, says Mashooqullah.

 

"You want to stop it [production] so you don't have extra inventory...[and] you need to take responsibility for whatever is left: so you're going to use it in some other form, or you have to pay for it because you made a bad call."

 

A swift decision will mean retailers only pay for the leftover fabric rather than a finished product. And really smart retailers will consider alternative uses for the leftover fabric, maybe using it to produce a different product next season, he said.

 

This kind of decision shows the importance of management judgement. While improvements in technology and apparel/textile industry software slickens supply chains, the human element remains crucial.

 

Mashooqullah adds: "You can fast forward a fashion supply chain by using technology but at the same time...you have to take responsibility of decision-making."

 

Moving beyond mass market

 

Fast fashion is also not just for the mass market. Supply chains for more specialised apparel companies are also speeding up, although at a slower rate.

 

"I see retailers wanting to do it more than they're doing it, but it's increasing," says Steve Pruitt, senior consultant of US-based Blacks Consulting, which works with independent, mostly luxury apparel retailers across the US.

 

The main challenge for these retailers is they can need a number of suppliers who are limited in their ability to make luxury-based goods quickly, adding management complexity. With specialist suppliers, they must also sometimes commit to orders about six to 12 months in advance.

 

"There's so many things involved - from the whole design process; acquiring the custom fabrications; going through the whole supply chain and moving merchandise around the world; quality control - it just takes them a long time to get it done," Pruitt explains.

 

Still, these retailers have been making improvements in the past decade, he adds. The turnover rate of new products entering the market has "gone up dramatically," with luxury retailers producing four to five new collections a year compared to about two collections in the past.

 

"There is insatiable demand for newness going on all the time," he says.

 

In fact, Pruitt anticipates that in the future, retailers will have dedicated micro-factories for even small companies, potentially creating new products as frequently as every two weeks.

 

Of course, one challenge for retailers in fast fashion is the increased risk of making errors in the supply chain, adds Mashooqullah.

 

In fact, tightening quality controls is a crucial aspect of a successful, fast supply chain, agrees Pruitt. "That's not a compromise that can really be made...if you didn't have the quality control in place, you screw up the distribution; the logistics start to fall apart, so you don't [sell]."

 

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