Navigating supply chain hassles in the Fast Fashion Industry

In this fast evolving and moving world, people want to stay on top of everything, whether it’s a new technology or new fashion. To keep up with people’s demand of wanting everything latest, fast and at an affordable price, the fashion industry gave birth to a new business model – Fast Fashion – a model that brings the latest runway glamour to you in a matter of days. And, in doing so the industry has to rely on a well adjusted supply chain. In this feature, we take a look at the challenges faced by the fast fashion supply chain and how can one navigate through them to make the supply chain effective and deliver the latest trends to the consumers before they run out of fashion.

The fashion industry is gradually transitioning from the traditional business model of fashion retail to one cannot affirm that traditional “fashion on demand”. While fashion has run into troubled waters, with the changing shopping preferences of consumers, the fast fashion business model, which is regarded as being a fairly new concept that originated from brands like Zara, H&M, etc., is becoming the King.

Globally, the fashion industry is worth USD 2.5 trillion and fast fashion’s share of this industry is continuing to grow to an expected 43% by 2029. Growing consumer demand for leading fashion brands at an affordable price seems to be primarily leading this growth.

According to a Statista forecast, by 2025, the global fast fashion industry is expected to reach a market value of USD 40 billion.  Regardless of being at the receiving end of a constant love-hate reaction from consumers, the fast fashion industry is most likely to experience splendid growth in the coming years. But, replicating recent catwalk trends and high-fashion designs, mass- producing them at low cost, and bringing them to retail stores as well as online while demand is highest, can be gruelling at times, and almost an unachievable task if not supported by a well-adjusted supply chain.

“To meet this growing demand, we are working with our customers in the fashion and retail industry to develop a flexible supply chain management system that enables them to respond to new market requirements, such as increased demand or product launches,” says Suresh Kumar Kannappan, Chief Commercial Officer (Indian Sub-Continent), DB Schenker

A poorly built fashion industry supply chain, leaves the apparel industry open to significantly elevated risk. Characterized by highly integrated global supply chains, the fashion industry faces significant supply chain challenges owing to its globalized nature.

Speaking of the supply chain issues in the fashion industry, Aditya Shah, Executive Director, V-Xpress (a division of V-trans) says, “From a logistics point of view, the textile, apparel, and garments are considered time-sensitive products. The most significant issue coming out of volatile demand is the potential cost losses linked with the factors of time to market and correct inventory.”

Further he says, “Distribution issues and irregularities in making goods reach a particular place at a specified location on time can cause stock shortages, subsequently leading to unhappy customers and reduced or no profits for the textile owner.”

Supply chain sustainability and transparency, reverse logistics, omnichannel and modern trade deliveries, accurate forecasting, and availability of raw material are among other supply chain issues faced by the industry. To deliver their raw materials and final goods across the nation, with accuracy and strict timelines, one needs to identify areas for improvement in processes, gain a competitive advantage in the industry, and eliminate supply chain disruption.

This begs the question: How can the fastfashion model be run efficiently?

Vertical integration for success

The term ‘fast fashion’ signifies speed and agility. Vertical integration in the apparel supply chain model is the key to keeping up in the fast fashion race. It helps create a faster, shorter and a more flexible supply chain. The companies that have aced the new business model are those that have shortened their supply chains, sped-up their processes, and secured direct control over design, production and logistics, if not raw material supply.

“The fashion industry requires a highly agile supply chain that takes into consideration both speed and cost. In this case, vertical integration supply chains are the most effective. The advantage of apparel supply chain vertical integration is that it allows companies to have the intrinsic ability to control all aspects of their process,” says Mr Shah

Mr Kannappan highlights a few advantages of vertical integration. He says, “There are multiple advantages to implementing vertical integration in the industry. It helps in creating predictability, increasing demand for the products, and gives more access to the production and logistics requirements. It also helps apparel brands in improving their local market share and enables them to offer high quality and customized products. In addition to this, brands benefit from increased control over the value chain via reduced distribution costs and the ability to align products with fast-changing fashion trends.”

Speed, flexibility and efficiency are the key in the retail industry. To survive you must adapt to an ever-changing landscape, assure quality checks for all products and provide the latest e-commerce solutions, Mr Kannappan adds.

Any apparel company with a vertically integrated structure has a good foundation on which to operate the fast fashion business model.

As to be summarised, with an emphasis on speed in every aspect of the business operation, vertical integration offers the fast fashion industry the possibility to react in near real-time to consumers’ tastes, accurately assess demand and then respond quickly by utilizing fast-cycle manufacturing processes.

This is an abridged version of the original story that was published in the June edition of the Logistics Insider magazine. To read the complete article, Click here.

Leave a Reply

Your email address will not be published. Required fields are marked *