Do you know where your used clothes are sourced? What materials are your used clothes made of? To answer these questions, you need to understand the fashion supply chain. The Supply chain is an important term in the fashion or clothing industry. The apparel supply chain is an extensive network that connects all the companies or brands involved in the process from the collection of raw materials into finished garments and distribution to the customers. Effective supply chain management is an important factor in this ever-changing fashion industry.
What is Fashion Supply Chain?
In this labor-intensive fashion industry, the fashion supply chain refers to the complex network of businesses and services. The network covers all the processes from conception to delivery of clothing and accessories to the customer. It consists of many stages of production including the growth of natural resources and raw materials for making fibers. The fibers are then woven into fabric in the weaving process and then dyed and cut. From there the garments are manufactured and moved to retail stores where consumers can purchase them.
Explanation of Fashion Supply Chain
The fashion supply chain starts with the design of the garment or accessories such as color, fabric, stitching etc. At the beginning a raw material is sourced then a production plan is made, the products are assembled and then the finished goods are distributed to the warehouses. From there the products are shipped to retailers for sale to consumers. In 2022, the global fashion industry generated more than US$1.5 trillion in revenue. Most of the manufacturing across Asia is done because of relatively low wages. The fashion supply chain is critical to any successful fashion business. For example, fast fashion sells cheap and trendy clothes that are quickly produced for the mass market. On the other hand, large clothing brands consistently produce new collections every few weeks and luxury brands usually have a new collection per season based on the latest trends of the season. Fast fashion becoming widely popular worldwide and the fashion industry faces many problems around it such as labor issues, overwork, child labor, low wages etc. These issues raise concerns for the safety of garment workers in developing countries.
Why is the supply chain important in the fashion or clothing industry?
- Effective supply chain management helps improve efficiency. It also helps to streamline business operations. Increasing productivity in the supply chain can improve customer satisfaction.
- A well-managed supply chain management helps in reducing logistics costs, inventory holding costs and other operating costs. It can help reduce waste by reducing excess and outdated products by optimizing inventory levels.
- An effective supply chain strategy helps in identifying any risks like disruptions in operations, quality problems, product shortages etc. and taking necessary steps to mitigate these risks.
- Supply chain management helps to deliver high-quality products and services by responding quickly to customer demand and improving customer service. As a result, customer satisfaction with the company will increase.
- An effective supply chain that is competitive helps any company in the market to differentiate itself from its competitors and gain market value.
How does fashion supply chain management work?
Collection of raw materials: The first step in making any product is to collect the required raw materials. This step of the supply chain process involves direct sourcing of cotton, silk, hemp etc. from suppliers or locally. The main goal of this step is to produce quality materials at the lowest cost that can meet the customer’s needs. In addition, fair labor and environmental considerations must also be addressed.
Design and production planning: In this step, engineers develop a production plan based on customer demand and consider inventory levels, costs and product quality. Fashion designers choose the fabric, trim, fit and finish needed for the clothing items from the design involved. Designers often manage the rest of the supply chain, such as they approve the use of fabrics and materials manufacturers as well as the sellers who carry their products.
Manufacturing: This step requires the raw materials required for each garment. Raw materials are spun, woven, blended and dyed by manufacturers into final products for distribution to retailers or direct consumers. The garment manufacturers then cut the fabric and sew it into wearable pieces according to the designer’s specifications and patterns. Manufacturers must carefully manage their production levels to meet customer demand and avoid overproduction of goods.
Distribution: The distribution process in the fashion industry is complex because once the products are manufactured; they are distributed directly to the customers through retail stores or wholesalers. A well-managed supply chain in this step may involve packaging, transportation management and shipping through various transport networks such as railways, waterways, roadways, air freight carriers etc.
End-user purchase: A customer purchases the item at the last step in the supply chain. Customers can purchase their items from brick-and-mortar retailers or shop online. This part of the supply chain for online retailers places more emphasis on logistics and transportation management, which involves reducing costs and increasing efficiency at all supply chain levels. Sellers must emphasize good sales floor and storeroom management to please customers. Retailers will also focus on inventory management to make shopping easier for customers.
Different brands and companies in the fashion industry use one of three strategies to manage their supply chain:
Push supply chain
In this system, producers and designers “push” products to end-consumer retailers by creating pieces of clothing that analyze upcoming demand. For example, as the weather warms up, clothing manufacturers start marketing their warm weather wearables, creating demand for the products and pushing them into markets and retail stores.
Pull supply chain
In this fashion strategy, manufacturers wait for consumer demand to increase. Here, manufacturers will produce products only when they know that consumers are in demand and will buy them. This is a good practice that reduces the risk of overstocking and helps manage inventory.
Hybrid supply chain
When fashion brands use a combination of both pull and push supply chain strategies, it is called hybrid supply chain management. This helps fashion brands save on inventory costs by reducing unpredictable consumer demand. This supply chain starts as a push system where textile manufacturers can produce the latest designs and garment products.
Problems and Solutions for Fashion supply chain
Environmental impact
The textile industry is the second largest contributor to water pollution with thousands of gallons of water wasted each year in the dyeing process. Also, the production of synthetic fibers is responsible for 35% of microplastic pollution in the marine environment, which adversely affects the environment. Thus many garments are wasted annually and millions of tons of garments end up in landfills. The primary solution to such environmental problems faced is to change the way clothing is made such as the application of a waterless dyeing process and the use of new dyes free from harmful chemicals etc. As a result, water wastage and pollution can be prevented. Also clothing brands are creating collection programs for unwanted clothing considering sustainable methods so that fabric and used items from unwanted products can be reused and not end up in landfills.
Labor and human rights concerns
Today, fast fashion relies on selling clothes at extremely low prices. Those who make these clothes often work in unsafe, hostile conditions and are paid less than a living wage. Also the majority of garment workers are women with 76% reporting experiencing gender-based violence at work. Brands must change the way they do business to address such concerns such as focusing on selling fewer items for higher prices, while also providing decent wages. Additionally, increased accountability and visibility in the apparel industry will further improve supply chains. Meanwhile, programs such as Fashion Checker and the Clean Clothes Campaign are working to demand labor transparency from various clothing brands.
Transportation and Shipping
Currently high international shipping costs in the apparel industry and traffic at international ports make logistics increasingly complex. So to tackle the logistics problem, efficiency and innovation need to be made to make transportation and shipping as efficient as possible. Logistics modeling tools and digital twins can map and optimize the entire supply chain, and data collection tools like IoT devices help improve visibility into the shipping process. Additionally, automation can streamline warehouse and shipping operations through tools like robotics and IoT devices.
Material shortage
Raw material suppliers in the supply chain are being affected by extreme weather due to climate change. For example, increased mortality in wool and herds in Kashmir and disruption of cotton cultivation due to floods. As a solution to such problems brands should focus on selling small collections of high-quality items worn over the years, which will help reduce the pressure on materials suppliers and manufacturers. Additionally, retailers can support suppliers using land management techniques such as regenerative agriculture. Also can recycle used items and fabric by collecting used clothes.
References:
- https://www.docshipper.com/guest-blogging/supply-chain-management-fashion-industry/
- https://www.purolatorinternational.com/what-to-know-about-fashion-apparel-supply-chain-management/#:~:text=The%20apparel%20supply%20chain%20includes,and%20distributing%20them%20to%20customers
- https://www.oracle.com/retail/fashion/fashion-supply-chain/#:~:text=The%20supply%20chain%20is%20important,in%20a%20highly%20competitive%20market
- https://www.onlineclothingstudy.com/2023/01/solutions-to-top-4-biggest-fashion.html?m=1
