This Solution Could Save Countless Lives in the Supply Chain

This Solution Could Save Countless Lives in the Supply Chain

There aren't many people alive today who don't remember the devastation of the Rana Plaza collapse with the thousands of garment workers trapped inside. Seemingly just another day at work, their lives were changed forever. But has anything really changed?

What Supply Chain Industry Leaders Are Doing To Stay On Top

Who are the fashion industry leaders within global supply chains? They are identified by their promise of potential and future leadership. Peers and customers recognize a passion for learning in leaders striving to conquer the demands of guiding a fashion industry supply chain in a world market. Leaders earn customer trust by using effective actions and plans in wholesale and retail challenges.

Supply chain management industry leaders encourage efficiency and innovation in all types of fashion. A fresh approach eliminates long-standing problems in the chain. This is particularly evident with design and manufacturing of apparel and accessories.

An example is the tendency of suppliers to drop prices to retailers when quarterly sales numbers are down. Consumers know about this pattern and buy the product as needed until items go on sale. At that point, they stock up on regularly used items such as lingerie, shoes, and dress clothing. Fashion industry leaders analyze an effective way to change the pattern and benefit all members of the chain.

Instead of relaxing with the comfort of the status quo, fashion industry supply chain leaders abolish the scattered pattern of static strategy. Today’s business practices succeed by implementing swift resilient operations in response to consumer demands and needs. Incredible supply chain leaders forecast the success of great companies.

What Makes Supply Chain Companies Great

The fashion industry thrives with superior leadership skills from great supply chain companies and organizations. They share their successful experience and lessons learned with other companies in blogs and at workshops. Policies in national and international supply chain operations bring success to small boutiques, major chains, and top companies such as Levi-Strauss and Adidas.

Musician and fashion designer Pharrell Williams teamed up with Japanese fashion designer Nigo a decade ago. Products are carried online and in shops around the world. Customers find eco-friendly apparel that consumers want to wear, including Ice Cream footwear. The sustainable item on the supply chain for Pharrell’s latest venture with G-Star is denim. The fabric consists of yarn spun from shredded plastic gathered from ocean trash and cotton.

The Global Leadership Award in Sustainable Apparel, or GLASA, inspires leaders in the fashion industry to overcome challenges that affect natural capital and environmental resources. The move is towards sustainable materials rather than throw-away fashion like cotton. Leadership makes a huge impact, as approximately 60 million people currently work in the fashion industry.

Textile recycling from LMB in London and aWEARness in the Netherlands lowers the demand on natural capital and reduces environmental impact. Greenpeace East Asia, through the Detox Catwalk campaign, recently recognized the pledge and accomplishments of several companies that have improved the environmental quality of their supply chains. H&M eliminated PFCs and contracts nearly 90 percent green transport options like rail and sea to move goods and supplies. Marks and Spencer received recognition for their move towards eliminating phthalates and APEOs in their supply chain.

The best fashion industry supply chain leaders and companies focus on improvement to increase effectiveness of the entire chain. They display the ability to adapt to changes in logistics and economy while continuing to meet customer needs.

 

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Photo: HKRITA

4 Solutions For Supply Chain Obstacles

Fashion trends can change in a matter of minutes. Supply chain executives must meet these sudden changes by focusing on what possible trends are set to hit. When a change does occur, they need to get the new products in stores before the trend cools. For the fashion industry, some best practices must be followed.

Streamline Process:

The first is giving everyone a clear overview of what is happening from the time the customer places an order, to the time it is shipped. The online ordering process should be streamlined so the latest products are moving. Otherwise, you are faced with an overstock you might struggle to offload later on.

As part of this process, make sure you pay close attention to the key factors causing delays in orders. This includes the length of time it is taking stock pickers to locate items, how long it takes staff to box up and ship items. You should also verify shipments are being contained to the fewest number of boxes possible. After all, each box will increase the costs you have with the order. The goal is to streamline the shipping process so your customers receive the items they order quickly, while the fashion trend is still hot.

Protect Gross Margins:

Getting the product to the customers quickly is only part of the equation. You also need to focus on protecting the gross margins of the company. The number of employees handling a transaction and the shipping costs increase the transaction costs. With the rising cost of staff and shipping costs, it might initially seem wise to downsize your staff or to outsource elements to foreign countries. This poses two problems in the fashion industry.

The most obvious is the delays and fuel surcharges associated with shipping from a foreign location. In turn, a reduction of staff does offer a new concern. While it is true you have fewer employees to pay to do the work, shipments aren’t being released as quickly. This delay slows down the receipt time for customers and employees are often forced to work overtime to get the daily shipments out in a reasonable amount of time.  The result is it costing the same if not more, to maintain the speed the company needs.

Drop Shipment:

Although, there is a logistics solution in cases where you don’t have the customer to warrant a full fledge shipping department. In this case, drop shipping is a great choice. It allows your customers to receive their items quickly, without incurring a considerable cost. Many drop shipping providers also have warehouses in key areas of the country and they can ship from one closest to the customer who placed the order. This allows them to get their item sooner and while the fashion is still at its peak.

Supply Chain Financing:

Supply chain financing is also on the rise and important as part of your global supply chain management. This process allows you to work in a manner that allows for discount programs, inventory financing and boosting internal cash flow.  In this case, you reduce external costs by handling the transactions with an in-house payment system. Customers then pay off their accounts through you and you are generating interest off the accounts, while seeing a significant reduction in the transaction fees. While there is still some associated risk, you do have the potential of seeing a significant reduction in fees when customers aren’t using major credit cards to finalize their transactions.

These best practices and solutions are a great way to help you make an impact in your career and the industry.

 

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How To Streamline Your Business Through Distribution Outsourcing

The Pros and Cons of Outsourcing the Order Fulfillment and Distribution

The world is now a gigantic virtual shopping mall, and ecommerce enterprises constantly face the challenge of meeting orders from all over the globe. To meet the demands of an international market, online businesses have turned to outsourcing order fulfillment and distribution. As an industry executive, you need to take a good look at the pros and cons of this strategy before taking it on.

The Pros of Outsourcing

Outsourcing is an unavoidable step for companies who try to move products from onshore and offshore suppliers to customers scattered all over the world. Undoubtedly, outsourcing order fulfillment and distribution has several significant advantages.

  • You save on capital investment on order fulfillment and distribution. Outsourcing minimizes the need to invest on technology, training, personnel, and equipment dedicated to fulfillment and delivery. It frees you from pouring enormous capital into storage, insurance, transportation, and labor. Your business is kept relatively leaner, and your capacity to meet orders is practically limitless.
  • You can focus on product development and company growth. Freed from the burden of running an entire department for order fulfillment and delivery, you can concentrate on product development, marketing and expansion. Your distribution and order fulfillment partner will see to this end of the business, and you will not need to worry about warehousing, delivery deadlines and coordinating the many details that go into getting goods from point A to point B.
  • You avoid a potential weak area in your operations. Distributing products from a fluid, multi-source inventory implies having to manage transportation. In turn, this means managing a “pick up” and delivery route, maintaining transportation and training personnel. These complex undertakings could spell a weak area in the company – one that will impact on the company’s capacity to do well in core areas.
  • You get experts to do the work for you. Your partner will (or should be) an expert with the infrastructure, the established processes, the equipment, and the people to take care of this end of your business. What’s more, you won’t have to train employees for it or go through the trial and error that accompanies any learning curve.

The Cons of Outsourcing

If you have reached a point where order fulfillment and distribution have become gargantuan tasks, outsourcing may be inevitable for you. However, there are potential disadvantages to this strategy that you will need to counterbalance.

  • You have less control but are still responsible for order fulfillment and distribution. Your customers will still complain to you about delayed shipments, lost or damaged products and errors in delivery – even if these are outside of your immediate control. To avoid having problems in this area, choose your outsource partner carefully and thoroughly discuss systems and safety nets.
  • Your company can lose some “visibility”. A company that takes care of its own order fulfillment and distribution gets an enormous amount of exposure every step of the way. Think about the big trucks making deliveries all over the continent – they are mobile advertisements for the company. You will need to think of ways to regain visibility – maybe through packaging, follow up calls, and other tactics.

If you are ready to take your company to the next level, you may consider taking a step towards outsource order fulfillment and delivery.  Just keep in mind the potential disadvantages that come with this step and you can indeed start conquering your worldwide market.

 

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Photo: Axis Warehouse

How Digital Supply Chains Will Improve Your Efficiency

display technology of future

Ever since the introduction of the “fast fashion” model more than ten years ago the use of supply chains has become instrumental in success. In the last few years there has been increased pressure to develop instrumental supply chains to reach the consumer. This pressure has been brought about by a couple of trends in the industry. The fact is that like with any industry online shopping has become instrumental. In short yes digital supply chains are going to play a huge part in retail. Now let’s take a look at what has brought this change about. There are really three trends bringing about this change.

The first trend that we need to look into is the globalization of the market place. With the use of online shopping the reach of your “storefront” has gone from the local community, to literally anyone that has access to the web. This is a great thing in a lot of ways; however it has also made it difficult for retailers that are comfortable with the brick and mortar to compete in the market.

The second, the digital movement makes the market much more price transparent. This means simply that the consumer is no longer limited to the local shops. They have access to almost anything online at a very competitive price. This means that the retailer can expect lower margins and a need for a greater variety of product.

The third and final trend is the demand for multi-channel offers. Meaning simply that the consumer wants to have options for obtaining their purchases, for example “in store pick-up”. This has made it necessary for retailers to develop more flexible supply chains. As we enter into the next phase of retail the use of digital supply chains could be instrumental to the success of any retailer.

What it takes to create a successful digital supply chain is a simple concept. All of the most successful chains incorporate three main principles. They are “lean” meaning that they cut cost and focus on the necessities. They are fast, bringing the fulfillment of the consumers order quickly and accurately. The final thing that they all have in common is that they are flexible; this allows the retailer to create an efficient process for their clients.

Another thing that all successful chains have in common is the integration of the brick and mortar with the online store. With ever changing trends keeping two separate inventories has become a thing of the past. What is more commonly seen now is shipping online orders directly from the store front. Making use of the staff already in place is effective and efficient.  This also allows the retailer to have a better margin and larger product mix.

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Photo: The Bim Hub