Everything You Need to Know About the Apparel Supply Chain
Welcome to the complex world of the apparel supply chain—a crucial artery in the heart of the fashion industry. Whether you’re starting out in the business or looking to refine your operations, understanding the intricacies of how your clothing moves from concept to customer is vital.
This guide unpacks the key stages of the apparel supply chain, explains why each is important, and discusses the challenges and technological advancements that could reshape the future of fashion logistics. Read on to discover what you actually need to know to optimize and grow your apparel business!
What Is a Fashion Supply Chain?
A supply chain is made up of each service and business involved in manufacturing, sourcing, storing, shipping, and selling products. For the fashion industry, this also includes producing each product from the concept phase to the customer.
Transparent communication between all parties is necessary for a successful fashion supply chain. After all, without open communication, it’ll be much more difficult to improve quality and reduce lead times, which will also impact customer delivery. Ideally, a strong fashion supply chain can help reduce the costs involved in inventory, logistics, and production. At the same time, it’ll also help increase customer satisfaction.
How Does the Fashion Supply Chain Work?
A fashion designer creates a design, which is then sent to a facility to turn it into apparel. From there, each piece undergoes quality control. If it passes, it’ll be shipped to online warehouses and distributed to retail stores. If all goes well, your customers will purchase each product, and you’ll report a positive profit margin!
Importance of Effective Supply Chain Management in the Apparel Industry
Proper supply chain management in the apparel industry can make the difference between a successful item and a failed one. Profit margins are often razor-thin in this industry. Therefore, you’ll need to balance customer demands and eco-friendly concerns with a fast turnaround and ensure you don’t purchase too much of a specific product to sell. Future forecasting is essential, and the goal is to get it right more often than you get it wrong.
Key Components of the Apparel Supply Chain
It all begins when a fashion designer develops a new design. After which, there are seven steps between the original concept and being in your customers’ hands.
1. Acquisition of Raw Materials
Acquiring the raw materials necessary to create each piece includes finding the cheapest possible price. Environmental and fair labor practices should impact this selection process.
2. Production and Design Planning
Engineers will step in to come up with the product’s production plan. They must consider customer demands, along with cost-effectiveness and material availability.
3. Assembly
This is where raw materials will be turned into the finished product. Whether the apparel will be sold directly to the consumer or be distributed to retail locations, it’s critical that the manufacturer can meet the demand without making too many of each product.
4. Distribution
In this step, the manufacturer will ship their final product to retail stores. This means packaging and sending their products via various transportation hubs, including air freight carriers, railroads, roadways, and waterways.
5. Warehousing
Because retail stores typically can’t have their entire supply on display, storing extras nearby is necessary. This approach is meant to avoid stockouts or other delays that can send your customers to a different store.
6. Optimization and Logistics
To increase efficiency and reduce costs, it’s necessary to optimize your supply chain apparel. For instance, finding the shortest possible delivery route or switching to a lower-cost supplier.
7. Customer Service
Are your customers satisfied with the final product? Do they have a question about delivery or making a return? Your customer service team takes care of them and their concerns.
Challenges Faced in Managing the Apparel Supply Chain
Sadly, there can be a lot of monumental challenges to the apparel supply chain. Learning how to overcome the following will put you in a much better position to have retail success!
Sustainability
The world is changing, and many customers are no longer willing to purchase apparel without knowing if it was made for sustainability. For example, linen and hemp require less water, energy, and resources than silk or cotton. Become educated on this topic and ensure your company uses sustainable practices when sourcing clothing.
Macroeconomic Trends
Is your company well-positioned to weather trends such as high inflation, cotton crop shortages, worker strikes, economic sanctions, etc.? There will always be macroeconomic trends, and it’s necessary to remain flexible at all times.
Logistics
Tracking your apparel as it is handed off to various shipping companies is imperative. To do this, part of your apparel supply chain management will involve using logistics applications. That way, you can tell if everything is on track or if there has been some type of delay.
Fluctuations in Trends
Again, proper forecasting is absolutely essential. Remember: fashion moves quickly, and what was popular in the spring may become a dud in the fall.
How Technology is Transforming Apparel Supply Chain Management
The future of the apparel supply chain is predicted to include built-in AI, predictive models, and machine learning. Each of these is anticipated to predict future reliability better. AI can specifically be utilized to track shifts in the weather that may impact deliveries. Hopefully, these technological advances will reduce expenses and help improve the supply chain.
Benefits of Using Apparel Supply Chain Management Software
Turning to apparel supply chain management software such as enterprise resource planning (ERP) can make your entire organization more efficient. Your ERP can provide stronger forecasting through robust inventory management and centralized data analysis. In other words, relying on an ERP will allow you to order what you need when you need it! As such, you’ll experience increased customer satisfaction, save money through automation, and streamline the development process.
Are you in the market for the best ERP to grow your apparel business? N41 has an unheard-of 99% client retention rate. Request a free demo today and learn how we can help transform your company!
