Supply Chain Challenges in Apparel Industry and How You Can Fix Them
Updated: Jul 22, 2019
This blog post was originally posted on August 30, 2017 but has been updated with new information on December 8, 2017
The apparel industry has become, in the past few decades, a very volatile one: costs, risks, and the demand for materials and products change frequently and even global factors such as the economic environment are the type of challenges retailers must face nowadays.
Anything that stops or slows the movement of materials and apparel products is considered a supply chain problem. It might be a problem with stocking for raw materials, or even increasing tariffs in countries where your factories, warehouse, and suppliers reside. These supply chain challenges can have a major impact on your company’s profits and make your day-to-day business processes unpredictable.
Top Supply Chain Challenges in Apparel Industry
Supply chains are far more than just cost control: there are many steps within the supply chain where an issue can be encountered, thus delaying the fullness of the process. With longer lead times, worldwide outsourcing, and shorter seasons, apparel supply is becoming more complex and demanding. Predicting changing styles and consumer demands is impossible to do, so businesses need help to overcome these supply chain problems.
1. Overseas manufacturing delays
Apparel stores in North America and Europe are increasingly depending on Asian manufacturers to produce their clothing and accessories. For instance, 97% of the clothing sold in the USA is made in another country. Many newcomers to the apparel industry are caught off guard by manufacturing delays that often result from lengthy international holidays. Apparel store owners can help prevent delays by heeding the following steps:
Keep a calendar of key international holidays and festivities (such as the Chinese New Year).
Place orders for apparel at least one month in advance of key holidays.
Follow up with manufacturers before your ship date to confirm your order is on track.
2. Lost or damaged shipments.
Shipping damage and lost shipments combine to create ongoing headaches for apparel companies that outsource their manufacturing and use drop shipping on a regular basis. Fortunately, business owners can help prevent these woes by following these tips:
Do your homework on shipping companies. Look for the best drop shipping companies.
Do not limit yourself to one shipping company. Varying your shippers enables you to compare them.
Complete shipping claims quickly and thoroughly to ensure a prompt response from the carrier.
In this environment, fashion companies integrating technology have an advantage in terms of visibility and control over business processes. Integrating an ERP into an apparel companies business processes is a great way that brands can evolve with business changes. They can easily view company-specific metrics and key performance indicators. Gathering this data can help apparel businesses stay profitable, be sustainable, socially compliant, and create customized Requests for Information (RFI). With a dependable ERP, apparel companies can achieve the below:
Generate accurate forecasts to manage the business;
With and ERP in-depth analysis, forecasts, revenue, and margins can be measured with historical data;
Efficiently handle multiple product dimensions;
Manage product life-cycle transitions from season to season;
Automatically respond to the changing seasons, trends, and product transitions;
Quick ordering systems to streamline the point of sale;
An ERP can help with tracking, reporting, and improve the accuracy of your forecast, as well as customer service performance;
Generate sourcing plans that will help you sync inventories with constantly changing forecasts;
Manage an effective sales and operations planning process;
Manage inventory and prices more efficiently across all channels;
Decrease ordering and distribution handling time — this will enable a quicker time to market.
When faced with apparel supply chain challenges due to industry demands, the best solution for your business is to have all information in a transparent format. Armed with a strong B2B integration tool like an apparel ERP system, companies can survive and even thrive in an industry that is constantly evolving.