Reimagining the Fashion Supply Chain
The vertical fashion supply chain is suffering from an array of century-old problems. The manufacturing pipeline is slow, disorganized, and lacks transparency. On a macro level, fast-fashion and apparel account for a whopping 10 percent of carbon emissions globally, making the fashion industry one of the biggest culprits of climate change.
At the retail level, retailers are receiving significant pressure from all ends of the spectrum, including from consumers who want differentiated and hyperpersonalized experiences.
Fortunately, the industry has incredible potential to shift and evolve.
The Road to Recovery
In a competitive, fast-paced industry like apparel, supply chain management is crucial. It's the driving force behind a successful fashion season and a brand’s ability to maintain its position as a trendsetter. Yet, in 2022, it takes roughly three months to four months to get a new style from ideation to shelf.
Shortened Supply Chains
The lengthy process has forced retailers to carry a wider-than-needed variety of products to ensure they're meeting customer preferences. If you think about the longevity of each fashion trend, then you know the lifecycle is short. This means retailers must order large amounts of inventory well in advance, and to obtain reasonable pricing, retailers tend to source materials from the cheapest destinations thousands of miles away. But any disruption in the supply chain results in large supply shocks. This is no secret given the supply chain disruptions witnessed over the last year. Supply chains are not agile and this has denied retailers the ability to shift to alternate sources in real time.
Supply chains need to be shortened through a transparent system that gives retailers a clear understanding of what's available to them, from where, along with price points. By creating a transparent system, off-the-chart pricing will fade out and manufacturers will have no choice but to provide fairer pricing to stay in the game.
Agile Textiles and Smaller MOQs
The fashion industry, in particular, has a seemingly complex supply chain route. It involves several players, including yarn manufacturers, fabric manufacturers, garment manufacturers in addition to wholesalers, distributors and apparel retailers. The number of participants adds heightened complexity and therefore requires a seamless and organized process to manage inventory and operational flow.
Beyond this, the industry needs supply chains to enable smaller but more frequent ordering, and that allows for more diversity. Driving costs down with large volumes or large minimum order quantities (MOQs) is a practice that needs to be thrown out the window. To procure something slightly more expensive that, in turn, allows the industry to reduce waste, meet customer needs quickly and that provides retailers the ability to pivot on-demand is worth the few extra dollars. After all, running out of an item at the wrong time can cost a brand, especially during peak fashion seasons.
Highly Accessible Shelf Space
Staying competitive in the fashion market requires being where your customers are. Offline retail can no longer compete with online shelf space, distribution, and speed to market. This must be thought about from the perspective of the consumer. With access to numerous styles from across the world, customers have become less reliant on retailers that continue to prioritize just their physical retail presence. Retailers must also make use of the online shelf space that's available.
One use case for physical retail space is as a quick-turn fulfillment center for online orders. Combining retail stores with delivery services has the potential to provide a huge value-add of quick delivery to customers, especially in urban areas. On the other hand, luxury and boutique stores will continue to thrive offline as they offer a differentiated and personalized experience that consumers love.
The carbon footprint of each piece of garment’s journey, from its creation to the conditions of the factory it's stored in, has birthed an unsustainable operation. This, combined with the need for shortened supply chains, versatility, and growing consumer demands, has revealed a critical need for better tech supply chain solutions.
Advanced tech solutions can provide fashion companies with an array of benefits. From real-time production updates to data-based production quality checks and maintaining a pulse on the inner workings of the industry, modern-day artificial intelligence (AI) and tech-based manufacturing solutions are filling key gaps which have previously been prevented.
Everything from AI to cloud-based technology and automated supply chains can drastically improve the current conditions. By utilizing technology, the fashion industry is able to modernize, become more transparent, and take a turn towards more sustainable operations.
Pawan Gupta is the CEO and co-founder of Fashinza, a B2B supply chain marketplace for fashion brands.
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Pawan is the Co-Founder and CEO of Fashinza, building the future of fashion manufacturing industry using data and cloud that is more sustainable, ethical, inclusive, fast, and efficient. Fashinza is funded by leading VCs, Accel Partners (Facebook, Slack, Flipkart) and SAIF Partners (PayTM, Swiggy).
Previously Pawan co-founded Curofy, which is today India's largest network of Doctors in India with over 50% of Indian doctors discussing patient cases with their peers to provide extremely quick and better diagnosis to their patients. Curofy was VC funded and got acquired by a large US corporate, Edifecs in an all-cash deal in 2017.
Pawan is a mission-driven entrepreneur who believes in using technology and entrepreneurship to bring meaningful change in the lives of the most needy. He was part of Forbes India's 30 under 30 in 2018, Rising Stars by Bloomberg TV, and Young Turks by CNBC. He has also written guest columns in leading publications and has spoken at global events.