No one should deny that fashion and retail brands can be innovative. Many are leaders in e-commerce and digital marketing. Some have even pioneered groundbreaking materials and designs that now are widely copied.
But the retail design software and operations technology most global fashion brands and retailers use to manage their supply chains is stuck in the last century. As a result, much of what happens in far-away clothing and footwear manufacturing plants happens behind an opaque curtain.
Brand designers and product/process managers usually are digitally disconnected from overseas contract manufacturers’ operations systems. Once they send specifications for a new design to a contractor, they have limited ability in their fashion design software to monitor downstream processes. This lack of connectivity, communication and systems integration makes it difficult for both sides to:
• Clearly see what’s happening and control quality
• Solve problems with strategically aligned solutions
• Quickly alter course in response to changing demand
• Test potentially differentiating ideas for manufacturability
A drastic upswing in retail store closings and bankruptcies has escalated the urgency to replace this failing retail design software. Credit Suisse Group AG expects 2017 to be a record year for U.S. store closings: about 8,600, surpassing the 6,200 stores that closed during the global recession in 2008.
Clearly, massive disruption is underway and continues to be a fast-moving threat to established brands. In June, Nike—a pioneer in the “athleisure” category—announced a restructuring in response to shareholder pressure to focus on 12 global markets only, a plan it calls “local business on a global scale” that will “deeply” serve Nike customers.
A new process-management model in retail design software
Nike’s move is not surprising. One reason for lost sales is that fashion buyers want personalization, rapid fulfillment, as well as transparent and ethical sustainable manufacturing—all of which are fueling the need for closer-to-the-customer production.
Managing the variability required to fulfill buyers’ wide scope of demand globally while also maintaining profits and standards requires fashion design software with a high degree of production flexibility and rapid response, both of which are missing in the offshore production model.
To stay viable and relevant, brick-and-mortar retailers and fashion brands must transform their fulfillment, execution and delivery mechanism. They need fashion design software that will allow them to have design-to-delivery real-time visibility and digital enablement to assess, analyze and act on supply chain activity.
The ideal solution also needs to be flexible because offshore production will remain the prominent production choice for many companies, so configuration and rate of change will vary per application. But flexibility can give producers what they need for proactive revenue growth through innovative production planning, such as implementing near-market production when it makes sense—like Nike.
Production-management solutions in other sectors, such as automotive and consumer product goods, have changed drastically in the last decade and present a proven use case for end-to-end digital connectivity across the supply chain. Traceability can be achieved almost immediately, for example, and orders and actions are defined and instigated through signals from sensors and other digitally connected resources.
Why PLM is the fashion industry solution for today and the future
Many manufacturers have found that modern product lifecycle management (PLM) solutions are the answer for right now and into the future as the fashion, retail and contract manufacturing industries continue to change.
Digital collaboration and data sharing is not a new concept, and PLM dates to the mid-1980s. So, what makes now “go time” for PLM in the fashion brand industry?
One reason is that PLM is a singular platform that provides many advantages for retail design software. It enables fashion and retail brands to embed advances such as high-performance computing, data-driven predictive analysis (as in, forecasting), and production simulation into operations.
PLM also enables execution at global scale. Users find they can:
• Standardize on best practices, reduce complexity, shorten cycles and gain visibility with a singular and shared digital stream of product data.
• Use early-stage collaboration to plan for manufacturability and avoid problems/delays downstream; and to profitably execute on high-demand and/or differentiating designs.
• Share performance data with suppliers and audit for quality standards; and find root causes of problems through traceability to enable fast fixes and future prevention.
• Lay the groundwork for automation, 3D printing and other digitally-driven technologies/practices that reduce cost, lower scrap, enable innovation and speed up processes.
Choose to look forward, not back
Low-cost labor and fast-moving merchandise used to be the winning formula for many fashion and retail brands, but the world has moved on. Consumers want more than a shirt or a pair of shoes. They want something that feels unique and different, and they want social and ethical accountability from the brands they choose.
At the same time, the retail design software process technology that makes it possible to meet these requirements is not easily inserted into the entrenched global supply chain.
Innovators find PLM to be the perfect solution for this conundrum: it provides the flexibility needed to make big improvements in their fashion design software with small steps. Fashion and retail brands can move forward with a transparent, design-driven production model that enables direct quality control as well as easy on-ramps for use of modern business tools such as predictive analytics.
Ultimately, it comes down to a decision to keep using what once worked but no longer does; or to embrace a new way of managing suppliers that will make fashion and retail brands more resilient, responsive and relevant.
This concludes part two of our series on digitalization to meet fashion and retail needs. In part three, we discuss how digitalization holds the keys to surviving in an unforgiving industry.
About the author Suzanne Kopcha is the Vice President of Consumer Products & Retail Strategy for Siemens PLM Software. She is responsible for using Siemens PLM’s resources to provide value-added solutions for the consumer products and retail industry. Kopcha has spent her career leading and consulting with others on the transformation of their innovation processes and leveraging technology as a catalyst for business growth. She’s been involved in transforming consumer products companies for almost 3 decades and has more than 27 years of experience in the industry. Kopcha was previously the PLM leader and an Enterprise Transformation Leader at Procter & Gamble, where she was responsible for technology and shared services across the company’s design and innovation processes; she also spent 2 years in the Corporate Strategy Office. Kopcha holds a Bachelor of Science degree in Management from LeMoyne College and an MBA from Rensselaer Polytechnic Institute.