How Fashion PLM Can Enhance Supply Chain Resilience and Agility

BY CHRIS JONES | NOVEMBER 15, 2023 | 7 MINUTE READ     

The fashion industry is renowned for its ever-changing trends and consumer demands, which makes it essential for brands to maintain a flexible and efficient supply chain. However, the fashion supply chain is plagued by disconnection and inefficiency. The fashion industry relies heavily on a distributed supply chain model, with numerous intermediaries contributing to producing, distributing, and retailing clothing and accessories. This fragmentation results in a lack of transparency and coordination, making it difficult for fashion brands to implement efficient processes. In today's fast-paced world, supply chain resilience and agility are crucial to meeting customer expectations, responding to market changes, and mitigating disruptions. Real-time visibility and traceability are required to improve the fashion supply chain's efficiency, resilience, and agility. How can this transformation be enabled?

Numerous processes, partners, and solutions must be aligned to streamline collaborative workflows and enable real-time insights. One powerful tool that can help fashion brands achieve these goals is using Product Lifecycle Management (PLM) as a hub within an integrated solution. This article will explore how Fashion PLM integrated within a connected business solution can enhance supply chain resilience and agility by providing a hub to collate primary data from processes, materials, products, and logistics across the supply chain and leveraging real-time data analytics, predictive modelling, and risk management tools.

Causes of poor transparency and traceability in the Fashion Supply Chain

Compared to other industries, efficiency, transparency, and traceability in the fashion supply chain are poor. For example, the automotive industry has exceptional transparency and traceability. Why is there such a difference between these industries?

The transparency and traceability found in the automotive supply chain can be attributed to several key factors:

  1. Regulatory Requirements: The automotive industry is highly regulated, and governments worldwide have established strict standards and regulations for safety, emissions, and quality control. Compliance with these regulations necessitates thorough documentation and tracking of the supply chain's materials, components, and processes. Non-compliance can lead to significant legal and financial penalties, incentivising transparency and traceability.
  2. Vertical Integration: Many large automotive manufacturers have vertically integrated supply chains, which means they own or closely collaborate with their suppliers. This level of control enables them to implement standardised processes and systems, ensuring transparency in sourcing, manufacturing, and quality control.
  3. Long Product Lifecycles: Automotive products typically have longer lifecycles than fashion items, subject to seasonal trends. Longer product lifecycles make it more feasible to invest in robust traceability systems and maintain consistent supply chain practices over time.

In contrast, the fashion supply chain suffers from poor transparency and traceability due to the following reasons:

  1. Fragmented and Complex Supply Chain: The fashion industry relies on a vast and fragmented network of suppliers, manufacturers, subcontractors, and retailers, often spread across different countries and regions. This complexity makes it challenging to track and trace products effectively.
  2. Rapid Fashion Cycles: Fashion brands constantly introduce new collections to meet ever-changing consumer tastes and trends. This rapid turnover of products makes it challenging to maintain detailed records and trace the origin of materials, labour and resources used for each garment.
  3. Cost Pressures: The fashion industry is highly competitive, focusing on cost-cutting and quick production turnarounds. These pressures can compromise transparency and traceability as brands seek cheaper and faster sourcing options.
  4. Lack of Regulations: Unlike the automotive sector, the fashion industry is not as heavily regulated regarding supply chain transparency. There are fewer legal requirements to disclose information about sourcing, labour conditions, or environmental impact.

The contrasting transparency and traceability levels between the automotive and fashion supply chains are rooted in the differences in their industry dynamics, regulatory environments, and supply chain structures. While the automotive industry has established comprehensive systems to ensure accountability and compliance, the fashion industry's complexities and rapid cycles have made it challenging to implement similar levels of transparency and traceability.

Not only is the fashion supply chain inefficient and often includes unsustainable practices, but due to its fragmented and complex nature, it is tough to rapidly pivot to alternative sourcing options when faced with supply chain disruption, such as geopolitical events. Additionally, the lack of visibility makes it difficult to make accurate measurements for defining and executing improvement programmes.

Technology and standardised methodologies are required to address these challenges by connecting processes, partners, and disparate solutions in the fashion supply chain to provide greater visibility, accountability, and efficiency while supporting the rapid fashion cycles and cost pressures.

Often, initiatives originating within the Fashion industry have failed, so a range of regulatory legislation from the EU and North America will add more significant incentives to invest in successful solutions fully.

The evolution of Fashion PLM

Product Lifecycle Management (PLM) is a comprehensive software solution streamlining product development, from design and sourcing to manufacturing and distribution. In the fashion industry, Fashion PLM focuses on managing the entire lifecycle of a product, from concept to consumer. It allows brands to collaborate efficiently, reduce time-to-market, and improve product quality. However, the benefits of Fashion PLM extend beyond design and development – it can play a significant role in enhancing supply chain resilience and agility.

Holistic insights from a connected business solution

Achieving resilience and agility within the fashion supply chain necessitates a comprehensive approach integrating the multitude of disparate solutions inherent in the industry. The holistic insights can only be realised through a connected business solution that combines various components like Fashion PLM, ERP, Retail Planning, CRM, Digital Product Creation tools, Supply Chain Management, Quality Management, process resource capture, Factory Planning, and many other design, development, production, and tracking tools. Fashion brands can establish streamlined workflows across all processes and partners by utilising Fashion PLM as the central hub to collate and harmonise data from these diverse sources. This interconnected ecosystem enhances data visibility and facilitates rapid decision-making, optimised resource allocation, and improved responsiveness to market fluctuations. In a dynamic and fast-paced industry like fashion, this integrated approach is the key to achieving resilience and agility, ultimately positioning brands for success in a highly competitive market.

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Real-Time Data Analytics

One of the primary tools to enhance supply chain resilience and agility is through real-time data analytics. Fashion brands can gain real-time insights into their supply chain operations by integrating PLM with other enterprise systems such as Enterprise Resource Planning (ERP), Retail Planning, Supply Chain Management (SCM), and Customer Relationship Management (CRM). This data includes inventory levels, production schedules, open-to-buy budgets, supplier performance, and consumer demand.

With real-time data at their fingertips, brands can make informed decisions promptly. For instance, if a sudden spike in demand is detected, they can quickly adjust production plans and prioritise certain products or styles. Conversely, if inventory levels are high, they can explore discount strategies or alternative distribution channels to avoid excess stock.

Predictive Modelling

Predictive modelling is another crucial aspect of a connected ecosystem contributing to supply chain resilience and agility. By analysing historical data and combining it with real-time information, brands can develop predictive models that forecast future trends and demand patterns. These predictive models can help fashion companies make strategic decisions, allocate resources more efficiently, and optimise inventory management.

For example, a brand can use predictive modelling to anticipate seasonal demand fluctuations, enabling the team to adjust production schedules, orders, and inventory levels accordingly. This proactive approach minimises the risk of overstocking or understocking, reducing financial losses and ensuring that products are available when customers want them.

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Risk Management Tools

A connected ecosystem should also offer robust risk management tools that enable brands to identify and mitigate potential disruptions in their supply chain. These tools can help assess supplier risk, geopolitical factors, and external market conditions that may impact production and distribution. By proactively addressing these risks, brands can develop contingency plans and diversify their supplier base, reducing vulnerability to supply chain disruptions.

For instance, if a key supplier is located in a region prone to natural disasters, Fashion PLM can assist in identifying alternative suppliers, processes, resources, and logistics routes to ensure a continuous supply of materials and products. This proactive risk management approach minimises the impact of unforeseen events on the supply chain and helps brands maintain business continuity.

Consistent and interoperable processes with Partners

Knowledge and partnership are the foundation for the technology described above to be effective. If your supply chain insights indicate a switch of supply to another region, can you be sure that the new supply chain option will avoid set-up delays?

It's essential that the processes for every supply chain option are documented and thoroughly understood. This will allow a like-for-like switch of supply process to minimise disruption to schedules, but the ability to track changes in resource usage will also become a regulatory requirement for sustainability purposes soon.

Brands such as Mango have already begun to build this agile manufacturing foundation. Mango is partnering with manufacturers with similar manufacturing processes in different regions so that supply can be switched from one region to another seamlessly, or manufacturing in multiple regions can be managed more easily as part of the sourcing strategy.

Conclusion

In an industry as dynamic as fashion, supply chain resilience and agility are essential for staying competitive and meeting customer demands. As a hub within a connected ecosystem, Fashion PLM offers powerful tools, data, and capabilities that can significantly enhance these attributes. Real-time data analytics, predictive modelling, and risk management tools enable brands to make informed decisions, adapt to changing market conditions, and reduce the impact of disruptions.

By embracing a connected ecosystem with a foundation of process knowledge and strong supply chain partnerships, fashion brands can build a more resilient and agile supply chain that responds to challenges and seizes growth opportunities. In an era where adaptability is critical to success, integrated Fashion PLM has become an indispensable asset for fashion companies looking to thrive in the ever-evolving fashion landscape.

Author Chris Jones

Chris has helped global brands, retailers, and manufacturers align people, processes, and technology for over three decades, driving transformation projects to maximise business impact.

This article is also published on LinkedIn: How Fashion PLM Can Enhance Supply Chain Resilience and Agility (www.LinkedIn.com)