The Fast-Fashion Challenge

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The Fast-Fashion Challenge

Want to be like Zara and H&M? The author discusses five innovative strategies whose embrace of internet solutions will make your supply chain faster and more nimble.

The "fast fashion" business model, a successful paradigm employed by Zara , H&M, and others, embraces supplier collaboration, workflow optimization, real-time feedback mechanisms, and information technology to achieve stunning business results. These types of activities and practices are ideally suited for web-based supply chain management systems whereby businesses can find a newfound bridge to global supply chain collaboration. The internet is now in young adulthood and delivering incredible quality, efficiency, productivity and collaboration to organizations who embrace it by aligning systems, incentives and communications through dedicated online communities.

With global competition raging and consumer spending a veritable mystery, it is more important than ever to get the right product to the market in breakneck pace at the lowest possible cost. Easier said than done, right? Overwhelming is more like it, unless we get really serious about organizational agility and leveraging best practices in information technology. Technology vendors of ERP systems and PLM systems have been promising end-to-end supply chain management and supplier collaboration for several years now, but is that what they truly deliver or are they simply confusing the market? PLM vendors do product data management really well, but don't usually share that information well across a deep, global supply chain. ERP systems manage mission critical data really well, but don't play well with outside vendors or partners without extracting a heavy toll on company resources to create custom applications. In reality, these aren't supply chain management solutions or turnkey end-to-end solutions at all. However, both the technology company and the client often wish they were, so the charade continues.

I think it's time to cut the rhetoric and take a closer look at industry best practices that embrace the interactive and collaborative nature of the Internet to find innovative new solutions to apparel supply chain issues. In working with both high-tech and apparel clients over the past several years, what follows are the five best ideas I have found so far in creating the organizational agility necessary for customer success in today's business climate. I share these solely in the spirit of opening a dialogue around best practices and as an advocate for transparency that I believe ultimately is key for all of us to continue with success moving forward.

1. Leverage the Internet for retail customer feedback as well as an early warning system for supply chain issues to accelerate processes and to keep product lines fresh and scarce.

Zara has tapped into the power of fashion. Small and frequent shipments keep product inventories fresh and scarce -- compelling customers to frequent the store in search of what's new and to buy now, because it will be gone tomorrow. Web-based systems that listen and collect commerce data as well as social media feedback provide honest and fresh eyes and ears in the marketplace, a pulse that the whole supply chain can be attuned and connected to.
2. Treat all suppliers and vendors as part of a single integrated company.

Zara treats all its suppliers and contractors as part of a single integrated company responding to the end consumer demand and feedback from the retail eyes and ears of the marketplace. Traditional enterprise technology, organizational structures, and disparate technology infrastructure make systems implementation cost prohibitive to sharing common systems and licenses with labs, small suppliers and logistics partners. Web-based supply chain management systems eliminate these barriers and connect all trading partners on common system without license restrictions via cloud computing software as a service model and innovative performance based pricing.

3. Integrate communication into a single Internet based platform that optimizes workflow along the critical path.

Poor communication is often the culprit of bottlenecks. Zara invested in information technology (IT) early on. Zara's in-house IT is simple and effective.Vendors and suppliers report that people are accessible and answers can be obtained quickly. To truly enable "fast fashion," organizations must strive to eliminate manual processes (e-mail and excel) wherever possible. Hidden data instead of transparent real-time data kills speed because it kills decision-making ability. Web-based supply chain management systems connect workflow to communication to ensure compliance and transparency. This guarantees that the communication is not separated from the early-warning system and does not occur outside the system.

For example, in some supply chain management solutions, all dialogue between the apparel company and all suppliers and vendors takes place only on their Internet platforms and not per email or Excel. Any number of attachments can be included and pulled from any ERP, PLM or other backend system, thus guaranteeing that the correspondence concerning each transaction, each order and each article can be traced and all-important documents can be accessed immediately from a central portal. As Holger Zdora, vice president at Katag, one of Europe's largest purchasing companies, puts it: "real-time assessment of the process enables us to decide more rapidly and dramatically accelerate time to market."

4. Pay for performance. Stop buying hardware and software, and leverage shared infrastructure in "the cloud."

If there is one thing that the phenomenal success of Google has shown business in the new economy, it is the power of pay for performance. Cloud computing, hosted web applications, and transaction-based pricing are the way to go today. This aligns incentives, priorities, and allows everyone to focus on their core competencies. Top technology companies have better technical talent and better technical infrastructure than brands. Trust them to handle it. No software to install, no hardware to buy, no upgrades to deal with. Simply service and results.

5. Simulate the vertical supply chain with adaptive supply chain partners who are trained and certified on your common systems.

Zara and H&M connect sourcing to retail in a collaborative, global, factory direct manner that empowers dynamic flexibility and adaptability to changes in demand. Finding the next China or backup suppliers and vendors for any part of your supply chain can be a long and arduous task. However, with web-based SCM, companies can tap the power of shared infrastructure and collaborative networks down to the tiny button company in Bangladesh. Brands can tap direct access to reliable, trained suppliers on demand from over 35 countries who are already active on the system and shared resources for 24/7 logistics support from technology vendors themselves. Look for this type of capability and support from your tech vendor rather than your sourcing and logistics agent and you may find more alignment and adaptive support than you ever thought possible.

Bill Palmer is Founder and President of Activate Media Group, an interactive video marketing company, as well as a recognized thought leader and speaker at executive conferences on social media and online video. Prior to Activate, Palmer worked in corporate finance for General Electric, strategic consulting for Deloitte, digital marketing for Synchrony Communications, and built a successful brand development firm called Progressive Brands. Palmer graduated Magna Cum Laude from the Kelley School of Business at Indiana University with a degree in Finance and Accounting. He is a competitive endurance athlete, and professional digital video artist. Bill hails from Los Angeles.

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