Faster, Faster, Fastest

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Faster, Faster, Fastest

By Nick Boland, Director, Global Product Marketing, Amber Road - 05/30/2017
Over the last year or so, "fast fashion" companies have gained tremendous market share from consumers in search of the hottest fashionable item at the best price.  These companies have executives from every industry – not just fashion – talking about the need for speed.  

In surveys across various verticals, speed-to-market has become the top market pressure for retailers. Fast-fashion leaders work in weeks, with a clockspeed in step with the quickening pulse of fashion itself.  More than just lightning-fast lead times, their entire business models are oriented around agility; they look for new trends and create shortened design-to-build cycles that can respond rapidly.

But when it comes to getting agile, normal efficiency practices don't cut it.  There's a limit to how quickly even the most organized supply chain can prototype, manufacture and ship.  This level of coordination requires visibility and digitized, connected systems able to orchestrate and manage inventory to get it where it needs to be. Combining these requirements with business insight generated from structured and unstructured data, and predictive analytics, enables the manufacturer to know where the product is at any given point in the lifecycle — and deliver through whichever channel where consumer demand is greatest. This is "supply chain digitization" — the ability to transform the way we do business by moving data over the web instead of on paper.

In December 2016, The Wall Street Journal (WSJ) prominently profiled the 25-day journey of a new Zara leather coat from concept to selling floor. Zara's parent company, Inditex, reported a 9 percent increase in profits and 11 percent sales growth for the nine months ending October 2016. Inditex had 2015 revenue of $22.1 billion, twice that of 2008. "Simply put, the reason for Inditex's success is short lead times: the ability to offer designs to the customer that other retailers do not yet have. Think of Zara not as a brand, but as a very speedy chameleon that adapts instantly to fashion trends," SociÉtÉ GÉnÉrale analyst Anne Critchlow told WSJ. 

Just last week, WSJ also reported on The Gap's plans to revamp its design-to-shelf processes to streamline and bring "back to basics" wardrobe choices to consumers.  The Gap's annual revenue numbers have flattened, market share is shrinking and CEO Art Beck is ready to transform the company in order to compete with the new breed of fashion retailers such as Zara and H&M.

The concepts Beck and other transformational leaders are looking at include some principal changes to the end-to-end supply chain.

Reduce cycle times by streamlining the design cycle: Supply chains like Gloria Jeans, Zara and H&M are rocking the production cycle, turning out products from design to store in an average of 25 days. Instead of producing multiple "hardcopy" samples, 3D renderings and high-resolution imagery is used to make high-level design concepts.  Through strong collaboration and web-based tools, manufacturers can turn out a prototype in five days based on solid design requirements. When minor changes to the proto sample are communicated back, time spent making additional samples is saved, going right into production instead.

Maintain end-to-end visibility into all phases of the product lifecycle: Creative, production and shipment decisions need to be made in real-time via a cloud-based solution for better information sharing both electronically (XML, EDI, etc.) and via web portals.

Consolidate data into a shared platform for collaboration: Typically housed in siloed systems, by integrating data both internally and across all partners, data can be captured one time and reused again and again.  This eliminates the need to have to re-key data many times throughout the supply chain, reducing time, cost and potential errors. A good solution must possess a robust data model for both master and transaction information that can easily manage the standard global elements as well as country-specific data elements — no small task.

Analyze where improvements can be made:  With all parties connected, transaction and master details housed in a centralized location, and everyone provided with the necessary levels of visibility, it then becomes essential to correct issues where they occur or can be avoided in the future. By leveraging analytics, historical global supply chain information can be mined to determine value points like cost, speed and risk.  For instance, identifying large duty savings opportunities via preferential trade agreements or transportation spend opportunities.

The lessons we can learn from fast-fashion experts are more than just raw speed.  Flexibility, control tower management, and data analytics are also crucial methods to supply chain transformation; these are essential for matching the clockspeed of modern fashion, which shows no signs of slowing down.  But when looking at technology solutions, not all supply chain management platforms are created equal.  Decision makers need to be sure they are looking for providers with the following attributes:
  • A very robust and comprehensive data model, able to model the global supply chain for all functions as well as all countries.
  • In addition to the digitization of the global supply chain data, digitization of the export and import regulations for all countries.  This allows for the automated processing of those regulations.
  • A rich set of capabilities to allow for the sharing (collaboration) of information as well as automation functions to perform the tasks required without human intervention.
In today's world where nearly every consumer industry is moving to an on-demand model, if you aren't looking to fast fashion for inspiration, you will need to catch up. This is the industry that is closest to the consumer and can react to trends and expectations with the lowest price, fastest delivery, highest quality, and lowest risk. 

By digitizing the global supply chain and leveraging collaboration, automation, analytics, and achieving flexibility, a robust and comprehensive GTM platform creates value by not only providing speed-to-market to stay on pace with the fast-fashion manufacturers, but also improve margins, agility and risk management. Beating the fast-fashion frontrunners means leveraging the right solutions to become not just faster, but the fastest.

Nick Boland is director of global product marketing at Amber Road.