Robust Raw Materials Management Manages Brand Risk

Raw materials management (RMM) in the apparel industry today covers a broad array of decisions and concerns; risk should top that list. Meanwhile, business managers at all levels and across all functional areas must manage more with less — more products, activities, materials, and metrics with smaller budgets, less time, and fewer staff members. So what tools can help apparel executives manage raw materials and associated risk today?

Raw materials management has evolved
A 2010 University of Florida study found humans began wearing clothing 170,000 years ago.1 Someone made those clothes from something, and that was the start of RMM. One could liberally argue early cave paintings of fur-bearing animals were the first inventory monitoring systems. RMM has come a long way, but we can do better.

Raw materials management has evolved in scope and practice as fashion, social awareness, technology, management philosophies, and Internet connectivity have matured. In fashion’s earliest days, one cave dweller made one wrap from one animal hide; today a sourcing executive may oversee purchase and logistics decisions annually for tens of thousands of fabrics, components, and trims over thousands of SKUs made in multiple factories across numerous countries for overlapping seasons, lines and brands. Early RMM was about availability. Today it is a complex ecosystem encompassing physical materials, country of origin, quality and compliance testing, inventory shrinkage, and other data that impact deliveries, import duties, liability and profit. Brand risk associated with the content, provenance, production and movement of raw materials and finished goods today is unprecedented.  RMM tools that worked well enough even 20 years ago leave a brand dangerously exposed to sourcing risk today.

Gathering, analyzing and updating the massive amounts of real time data in today’s speed to market(place) and dynamic social and regulatory environment is a gargantuan task. Though still in widespread use, manually updated, user-generated spreadsheets leave brands vulnerable to reputation, profit and legal risk. Simply put, user-generated spreadsheets no longer suffice.

The problem and the solution: 2014 and beyond
Production-related RMM concerns must not be ignored but first and foremost RMM today must manage sourcing risk. Apparel executives need a data management tool that tracks the myriad of ever-changing, fiber-forward data points in real time simultaneously across users to facilitate profitable decisions and rapidly identify raw material-related risks. In the RMM environment now facing brand personnel, data management is both the problem and the solution. Carefully tracking every detail of the origin, content, processing, movement, and performance of raw materials, concept to consumer, will allow managers who are cognizant of their brand promises, and knowledgeable in the ever-changing compliance and trade regulations to identify any non-conforming materials before a problem occurs. Exhaustive data analysis is the solution.
However, exhaustive analysis is also the problem. If analysis is thorough enough to uncover shortfalls in all the raw materials and resultant product, mountains of data must be analyzed on a daily, if not hourly basis. User-generated spreadsheets require ongoing data entry, are unwieldy to manipulate, and require ad hoc updates to risk alert parameters if they are to remain relevant. Deliveries will grind to a halt while managers await analytics and clearance to ship. If manual analysis is quick enough to keep up with the fast pace of production, it will either bypass or overlook key data, testing or metrics. That leaves brand executives to fly, quite literally, by the seat of their pants in hopes that no land mines explode. To be manageable and current, data analysis must be automated. Therein lies the solution.

Today’s business environment demands meticulous analysis of massive volumes of up-to-the-minute data but it allows neither the time nor the personnel to undertake the task by hand. To address this:

RMM tools must be robust enough to integrate, update and protect a vast array of fiber-forward data from sources both internal and external 2 to the brand.
Updates must be made seamlessly and concurrently across all user interfaces, in the event of expected and unforeseen events.
Risk testing parameters must be current and risk alerts must be automated; architecture must allow new risk tests to be added as new hazards are identified and new regulations arise.
Permission-based input by key vendors and brand partners must be allowed, to minimize brand workload.
Standard reports, exception reports, and dashboards must be customizable to meet the needs of managers at different levels in the brand hierarchy.
But the tool must also be affordable to the brand, must be easy to use, and it must help, not hinder, brand personnel’s work.

Fiber-forward solutions
The solution to the challenges of managing raw materials risk in an era of capped resources is a scalable, cloud-based, fiber-forward, integrated solution that spans concept to consumer with built-in risk and action alerts. It must allow permission-based real time updates, generate exception reports, and offer customizable dashboard capability. It must also be affordable to the majority of apparel brands, including small brands with limited experience, expertise and resources.

Current PLM and ERP systems enhance the ability to quickly track and analyze integrated data through much of the supply chain and help ensure every user is viewing the same version of data. But in today’s regulatory environment, only solutions that provide full fiber-forward visibility provide protection for a brand.

Margaret Bishop is a global consultant to the textile and apparel industry, and an Adjunct Instructor in the Departments of Textile Development and Marketing, and International Trade and Marketing at the Fashion Institute of Technology in New York. She may be reached at [email protected].

1 M. A. Toups, A. Kitchen, J. E. Light, D. L. Reed. Origin of Clothing Lice Indicates Early Clothing Use by Anatomically Modern Humans in Africa. Molecular Biology and Evolution, 2010.
2 Including vendors, labs, and other business partners.

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