Fast Fashion

Keeping track of the fast and furious world of fashion has never been easy. From one season to the next, fashions change. And so do the winners and losers among those trying to predict what to buy, how much to stock and when to deliver.

So when you assemble a group of fashion industry professionals together to talk about the supply chain, one thing really stands out: and that's that speed is everything. Those companies able to ensure that products get onto the shelves within days are often regarded the fastest growing in the world today. The retailers on everyone's lips seem to be Zara, H&M and Mango. During the last few years, the talk of the supply chain has been how these companies have progressively been cutting the time to market from around 76 weeks, to 36, to 16, to 2, and now just to a matter of days. No sooner have the latest trends gone parading down the catwalk than they're on the high street. So how do they do it?

The answer, according to almost everyone present at the conference, is through partnership, collaboration and sharing information. Several speakers, including those representing international fashion brands Gucci and VF Europe, Swiss retailer Vogele, and Italian retailer La Rinascente, all agreed on this. Admittedly, a number of developments have paved the way for cutting time to market, including several technological advances in supply chain planning. But the continual need for a rapid exchange of information on stock levels and sales in stores, seems to be the accepted way forward in fashion supply chain circles."Communication by the convoluted route of fax is being replaced by sharing information in real-time through IT platforms," says Riidiger Bentrup, of logistics service provider Hellmann Meyer & Meyer.

But today's supply chain, serving today's consumer, is getting increasingly complex, he says. The consumer expects far more choice than ever before, and service and quality, not to mention cost, remain crucial.

The Luxury Complex

Take the global luxury-goods brand Gucci, for instance (see sidebar). Its customers demand high quality, as well as, at times, personalized objects for certain customers. This, says Karlheinz Hofer at Gucci, requires a flexible and very responsive supply chain. The leathergoods and logistics director explains that up to two thousand suppliers are involved each season, working on everything from raw materials to assembly. To facilitate the complicated process of producing a luxury bag or wallet, the company has slowly been introducing a 'cost information system' aimed at providing the necessary tools for suppliers to stay in touch and collaborate.

Gucci has implemented supply chain software for both demand forecasting and production planning through TXT e-solutions. An Internet-based supplier management tool, or Intranet, is also being set up through TXT, for increased visibility of the supply chain from the supplier to the retailer. "We've formed partnerships with key suppliers, using the same technology," says Hofer. "Sharing the same tools and having the foresight to base production on more accurate sales data makes life so much easier." Both service and speed have been vastly improved, notably in the leathergoods division where a 31 per cent rise was recorded in 2005.

"The next step for us is to shorten the time to market even more," says Hofer. "We envisage doing that through further integration and managing our supplier network more efficiently. This, in turn, will lead to cost reductions and increased production reliability - mainly through greater operation control for suppliers."

Going Global

Nonetheless, the fashion industry still remains reticent about the potential threat posed by a global network of suppliers, or outsourcing. Many cite the danger of competition, on top of the major concerns of speed and quality. One panelist during the conference raised a cautious point of view, by explaining that indiscriminate outsourcing could lead to the creation of competitors. And he wasn't alone in a fear of sharing internal sales data with suppliers who could feasibly 'give the game away' to competitors.

"Globalization has in many ways led to falling costs, but also greater competition," says Bentrup of Hellmann Meyer & Meyer. All eyes are on Asia at the moment. The impact of relaxed trading laws in 2005, especially between China and Europe, has resulted in imports soaring to record levels. And the surge of cheaper imports from far-flung countries has been accompanied by a backlash from critics. The staunch enemies of outsourcing and global logistics often quote problems of quality, overfull warehouses, surplus stock, increased transportation costs and long lead times.

"Sourcing in lower cost countries, needs strong partnerships," says Carlos Cordon, a professor of operations management at international business school, IMD. "But the traditional problem highlighted by most suppliers, is that there's no direct contact with the stores."

Keeping in Touch with Fashion

So the need to remain competitive, and in touch, has inevitably been good news for some. Technology companies and logistics service providers have been growing almost as fast as the international textile industries they support.

TXT, which has clients including Adidas, Armani and Arena, has become a major player in the fashion industry. Francesco Maderna, its vice-president, acknowledges that the company has grown fast, working closely with the likes of Gucci, to streamline the supply chain and use technology to iron out various trouble spots in the industry.

"Reducing lead times has always been a challenge in fashion," says Maderna. "The increasing variety of products on offer, the demand for more choice of colours or size, as well as the globalisation of the industry, have all made supply and demand difficult to predict."

He goes on: "Retailers and manufacturers all over the world are striving to cut costs and improve their bottom line. But fashion, being so volatile, can be influenced by so many factors. The weather, the impact of promotions, all risk leaving either too much or too little products on the shelves."

But one thing remains clear. Service levels will continue to rise, just as quality improves, and lead times are reduced. Otherwise, where will they find time to go to these conferences?