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Blog / May. 14

Lessons from COVID-19: Why Supply Chain Digitalization Is the Hottest Trend in Fashion

Luca Ferraris

In Aptos’ recent conversations with fashion retailers, a leading theme is recurring: supply chain digitalization. Many of the retail brands we work with are indicating that digitalizing the supply chain will be a top priority in their technology investments in the years to come.

It sounds like nothing new, right?

While retailers have been investing slowly and steadily in supply chain digitalization for a while now, the pandemic has added new urgency and acceleration to this existing trend.

“We produce some of our styles in Europe and some in Asia,” said the product manager at a renowned Italian fashion brand. “When China’s factories closed, part of our new collection got completely stuck; we didn’t have full visibility of how suppliers’ delays could impact our operations and didn’t have sourcing alternatives. When China’s suppliers restored their activity and were ready to deliver, it was then our turn to be at home, in lockdown, unable to receive prototypes, do the fitting and launch samples. Meanwhile European suppliers started to shut their doors, meaning the whole collection was at risk.”

As the example above shows, COVID-19 has brought forth a new realization of the extreme vulnerability of global supply chains and with it the need to move fast on the path to digitalization. Digital supply chains can increase visibility at all levels, mitigate risks and promote business continuity – even with disruptions of the magnitude that are occurring during the current crisis.

“Recently, the impact of the global pandemic COVID-19 has accelerated many digitalization trends and exposed deficiencies in processes and systems, highlighting the need for preparedness and resilience,” Gartner research director Bob Hetu stated in a blog post.

So where should brands start, or what should they do next on the journey to supply chain digitalization? It quite simply depends on where brands are in the process. Digitalization cannot be accomplished overnight. It’s a journey that requires new skills, new technology and a whole new culture. Most important, the approach must be a strategic and holistic one. To maximize the potential of digitalization, the different processes – from design to supply, sampling, manufacturing and delivery – must be well integrated so that any benefit gained at one phase can positively impact with a cascading effect at all levels of the chain.

Based on Aptos’ expertise working with 500+ fashion brands to support their merchandise lifecycle management strategies, here is what we view as the best-practice approach to introducing more digitalization into end-to-end supply chain and merchandise processes:

Designing, Prototyping and Sampling – Digital designs, mood boards, tech packs, virtual look books: digital technology can be leveraged in all creative and development phases of the product lifecycle. When integrated with product lifecycle management, the use of technology such as 3D and augmented reality allows everyone involved in the design, sampling and prototyping processes to visualize a style in a realistic manner and from different perspectives. Teams can work together by adding notes and sharing comments or modifications. Benefits include faster time to market, lower costs, better remote collaboration and business continuity in times of disruption or social distancing. The whole innovation process becomes fully sustainable as no product is physically produced until a final vision is reached.

Supplier Collaboration – Some would claim that supplier collaboration has been digital for a long time. What is different today is that systems supporting supplier collaboration are not merely one-to-one data exchange and tracking applications. They allow the creation of multi-enterprise networks where collaboration with multiple suppliers, logistic service providers and forwarders is facilitated up and down multiple tiers. The use of AI, analytics and real-time KPIs helps participants in the network turn the whole value chain from reactive to predictive – allowing everyone to preview where bottlenecks might occur and where risks ultimately sit, as well as explore sourcing alternatives in case of disruption so prompt decisions can be made.

Commercial Buying – At this moment in time, brands should be presenting their summer 2021 collections. However, with no events for collection previews and buyers who are limited in their ability to travel, the whole buying process is slowed. Solutions that support the digital buying session allow buyers and area managers to visualize styles remotely and in digital format, via their tablet or other mobile device, so they can act on their tastes and automatically place orders. Since no manufacturing resources have yet been committed, all inputs received from area managers can help adjust a collection’s design and planning to the needs and preferences of local markets.

• “Market-testing” and Selling – We’ve all heard about the success of the Kim Kardashian: Hollywood app that allows users to dress an avatar with clothes from Roberto Cavalli and Karl Lagerfeld. It may be hard to believe, but the potential of digital clothing goes far beyond even that. A fashion business that goes fully digital might be able to see its customers browsing its 3D designs and expressing their sentiments online. Eventually, buyers might be able to try on a new dress using augmented reality, see how it looks with the “analog” bag they purchased last year and buy the dress. When the value chain is well integrated, reactions to the product (sentiment) along with data on the best and the slowest sellers can be transferred to the planning team (who can then make the best assortment decisions) and to the design group (who can leverage this newfound intelligence of the market into the next innovation cycle).

Where are you in the journey to digitalization, and what initiatives are you planning to prioritize next? If you would like to share your thoughts and experiences on supply chain digitalization in apparel, don’t hesitate to reach out to me on LinkedIn.