It’s unfortunate, but the worst pain often brings about the biggest change. The Great Depression of the 1920s and 30s. The staggering increase in inflation cause by the 400% spike in oil prices in 1973. And if those seem too distant, it’s only 20 years since the dot-com bubble burst – taking the Nasdaq down 80% from its peak – and just 12 years since excessive risk-taking by banks led to the global financial crisis in 2008.
Each of these was a complex event, brought about by a lot of different factors, but they all had two things in common: they redefined people’s priorities and prompted different ways of thinking, and they were all underestimated until their true impacts became impossible to escape.
In an act of pure bad luck, I actually started working in fashion around 1974. And while I was personally insulated from the economic reality – I worked for a business that had been ambitious in mechanisation and computerisation, which helped it weather the dire effects and become more efficient – I know, looking back, that it took years for inflation to return to anything like normal levels. The impact, on other companies and industries, at the time, was devastating, and it’s clear now that it was only by reacting quickly and embracing change that the business survived.
Needless to say, we’re facing pain on a scale beyond anything in living memory today. And while some sectors are reopening, and things are looking up in the short term, the real economic impact could be yet to come. The earliest corporate casualties have been in hospitality, tourism, and entertainment – where lockdowns have stopped revenue generation in its tracks – but other sectors may not be far behind, banking on pent-up consumer demand that simply may not exist.
Fashion retail is certainly not going to be spared the fallout of the pandemic. The high street has already seen significant job losses, and more are likely to come when government assistance and job retention schemes – the UK’s version of which is currently paying the wages of around one in four workers in my home country – are wound down in late summer. Remember that the fashion value chain employs tens of millions of people worldwide, and consider how many of those jobs are at risk without a sudden, and significant, return of consumer spending when shops open back up this week.
We might have expected eCommerce-first (or eComm-only) companies to be spared the brunt of this, since their online storefronts have stayed open. But in fact their supply chains have been so disrupted by the serious, military-style lockdowns in countries like India that once they have emptied the backlog of stock from their channels, it’s going to prove difficult to find the product to fill them again. As I write this article, India is still struggling in a serious way with the effects of the pandemic, making the safe return of factory workers a very delicate tight-rope to walk. It will likely take a considerable amount of time for the industry to return to pre-COVID levels of output.
Which brings me on to the core idea of this article: that the forced stop on fashion brought about by COVID-19 could be the catalyst for the industry to finally change from the bulk production model, where “stack it high and sell it cheap” is the mantra, towards a mix of staple, never-out-of-stock products and fashion-linked products – both based upon a new demand chain model, and produced using a digitally connected ecosystem.
What do I mean by a demand chain? Last year I might have needed to explain it in theoretical terms, but at the moment the evidence is out there. As the global supply chain has stretched beyond breaking point, attention has turned to how brands can regain control of their manufacturing – bringing at least some element of production back onshore or to near-shore countries, to respond to a consumer market that seems highly likely to demand smaller, more frequent, more sustainable collections.
But while this new model could solve some immediate problems, its chances of competing with the scale of the current offshore model are very slim – especially when we remember that most of the manufacturing skills we once had in the Western hemisphere have been steadily migrating to the east for several decades.
Where does the answer lie? In following the models laid down by other sectors – such as automotive – where just-in-time manufacturing has proven itself time and time again since the 1960s. Because while JIT has been threatened by the pandemic, once the parts begin moving again, its inventory-less model is likely to be even more appealing for smart brands that want to build factories that are equally smart – and more accurately connected to the consumers’ actual needs.
Introducing the Factories of the Future
Even before the pandemic, the need for a new model of production was clear. The offshore paradigm – where orders were pushed to the other side of the world, with little or no visibility or accountability – simply couldn’t hold up to the scrutiny it was being put under by shoppers, governments, and NGOs.
A big part of solving the issue of sustainable production will, of course, be figuring out how to create more ethical and environmentally-sound practices. But another key component will be moving to a model that doesn’t rely so heavily on making huge volumes of things and hoping they sell. Instead, the future will be a measured, controlled, and demand-driven.
The merchandiser’s best friend has always been trend: the curve, based on intuition or data, that tries to predict what’s coming right around the corner, and tries to forecast even further than that. A decade or so ago, a trend curve could take months to become real, whereas today what’s next changes on a daily or even hourly basis, although evergreen essentials like t-shirts and now PPE last longer. Responding to that need is going to mean completely digitising and connecting the value chain, allowing a brand to deliver better quality, increased design options, configuration and customisation.
As the name suggests, though, complete digitisation is not a one-step process. From new manufacturing hardware to bi-directional software integration, the factory of the future will need to include most, if not all, of the following:
- A.I. M.L. – Demand analytics with intelligence & insights
- Planning – extended to include both manufacturing and retail
- E-comm, PLM & ERP – deeper bi-directional connectivity
- 2D CAD (Innovative design platforms)
- CAM & NC-Cutting
- 3D (all types)
- Digital Knitting, Weaving, Printing & Dyeing
- Scanners (all types to support people, materials and components)
- Material Platforms (Physical and Virtual)Mass-Customisations, Personalisation and Configurators
- Blockchain – E-contracts, Proof of Providence, Personalised marketing
- Robotics – Material handling, Cut & Sew.
- Rail Systems – Digitally controlled overhead rail systems
- Track & Trace etc – Smart tagged bundles and single products
- And more
As the sheer scope of the technology I’ve just listed suggests, the factory of the future – in its full-blown form – will not be a small investment. As a result, while the appetite for re-shoring is high, the reality is that the large-scale side of production will remain offshore for some time and therefore the near-term strategy should be how to streamline and connect each of the value-chain partners. Factories in China, for example, may already have some – or many – of these pieces already in place, while the task of setting up a new factory in the US, EU, or UK will probably need to start from scratch… and let’s be realistic it’s not only a matter of machinery and technologies, but also the challenge of training and onboarding new resources!
It’s therefore important that advances in manufacturing happen both at home – through the introduction of new micro-factories for sample production and short-run manufacturing – and overseas by connecting existing manufacturing hardware, software and processes in a fully digital transparent, and interconnected value chain.
For that chain to work, though, hardware and software vendors – even those who compete directly with one another – will need to work together to agree open interface standards and file formats, and to design future versions of their tools with integration and collaboration in the forefronts of their minds.
As The Interline’s two-month focus on 3D working has shown, though, the industry is actually making good progress in this direction. Today, we have settled on a single, standardised file format for 2D CAD, and while we still have at least two different 3D formats, evidence suggests that the industry may be able to agree a unified technical 3D material format in the next couple of years.
Only with this integration in place will we be able to ensure that data can flow from design to the factory floor and onwards, into distribution. And it’s only with that consistent approach to information integration that the fashion industry will be able to shift its approach to production from supply to demand.
This interconnectivity of software, hardware, and information is the central pillar of Industry 4.0 (or Smart Manufacturing in the US). And while that has been a concept rather than a reality in fashion – other industries are much further along the speed and scale of the changes required that’s been brought on by the pandemic. This could be the perfect opportunity for the fashion industry to reach into the black hole of manufacturing and pull out greater visibility and control.
Next week, I’m going to examine some of the practical steps we, as an industry, can take to move away from the wasteful, unsustainable – in a literal sense – model of the past, towards a more data-oriented, demand-driven future.
