Many countries are exiting the most restrictive phase of their pandemic lockdowns. And while more localised restrictions are likely to be put in place in the second half of the year, retail channels are reopening and consumer spending is exhibiting at least a partial recovery.
But this is not a return to normal. Brick and mortar stores may have their doors open, but inside things are going to look very different for the foreseeable future: two-metre distancing, sanitation stations, contactless checkouts, and products that shoppers have touched but not bought being placed into quarantine.
At the same time that retailer’s processes are being overhauled to reflect the new reality, consumer priorities are shifting for the same reason. Particular sectors like loungewear, lingerie, athleisure and beauty are seeing year-on-year growth while other segments slump, and shoppers are displaying a preference for longer-lasting, higher-quality products backed by unimpeachable environmental and ethical credentials.
And in the background, supply chains that were stretched beyond breaking point by the initial outbreak are being pieced back together from parts that don’t quite fit the way they used to.
These are the challenges of the new reality, likely to remain with the fashion and retail industry for the remainder of 2020, and very likely into 2021. They are challenges that brands, retailers, and manufacturers need to tackle head-on today, and prepare to keep on top of tomorrow.
Crucially, though, not all of them are new.
The same challenges, but more concentrated.
Clearly nobody expected a global pandemic that would shut down retail for a full quarter, and make hygiene, sanitation, and customer safety store owners’ foremost concerns. And while masks, antimicrobial fabrics and other personal protective equipment have been common accessories in East and Southeast Asia for decades, their emergence as a hot ticket item – and a tool for individual expression as well as safety – was unexpected at the global level.
But the other pressing challenges facing the retail industry today are pre-existing conditions that have just become more acute – happening more quickly and more visibly – as a result of the coronavirus crisis.
Consider inventory. Right now, physical retailers who could not fall back on eCommerce or social commerce (the latter of which is only at a nascent stage in the Western hemisphere) are sitting on huge volumes of dead stock from their spring / summer season. Some household names are, in fact, considering packing that stock away and storing it until spring / summer 2021 rather than discounting it to clear.
The scale of this is unprecedented, but the concept of holding excess inventory that did not sell-through at full price, and following a strategy for discounting or repositioning it to sell at a reduced pricepoint is not new. In fact, it’s been fundamental to the workflows and cultures that have shaped fashion and retail for a century or more. In a typical season, a traditional retailer will discount 33% of the volume of any given product, and then scrap a further 15%. So in practice only a slim majority of the apparel, footwear, and accessories made are sold at their target price.
Lifecycle speed is another example. Getting products to market faster has been a priority for every contributor to the fashion value chain ever since the disruption of fast fashion. But while these improvements to speed have normally been measured and iterative, the post-COVID market is demanding newness within a timeframe that simply is not achievable under the usual design, development, sourcing, and manufacturing cycle – which can take between 6 months and a year to bear fruit.
eCommerce is a similar story: a growing direct-to-consumer route in normal circumstances, suddenly elevated to become the primary channel by the pandemic. It is unlikely that online sales will retreat back, with the eCommerce sector already pegged to pass $700 billion by 2022. But analogue processes and digital channels don’t always mesh, and this has created an incredibly competitive market for companies that are either scaling up a previously small online operation, or trying to stock or replenish digital storefronts faster than their manual workflows can manage.
And finally, consider transparency and sustainability – another area that has been climbing the priority ladder for some time, but whose ascendency has now been accelerated. Close to half of consumers in 2019 were willing to part ways with brands they felt were causing environmental harm, and the dual public health and inequality crises that have characterised 2020 so far are likely to translate into an even greater degree of conscience-led shopping. Consumers will reward brands that operate with an open book, and punish those who keep the inner workings of their supply chains hidden.
New demands; new solutions.
Whether they are novel or more concentrated versions of existing challenges, the key to overcoming them will be the same. The fashion industry must redesign the way it develops and produces products. More than simply overstressing the long-standing model of manufacturing offshore, in high volumes, the pandemic has revealed the need for an entirely different approach. An approach that balances the need for scale with the requirements for leanness, responsiveness, and improved profit margins at a time when every penny counts towards a brand or retailer’s bottom line.
But while a lot of column inches have been devoted to the theory of overhauling manufacturing, there have been very few practical examples of how fashion can actually match its production with the demands of the new reality.
Prior to the pandemic, in October 2019, Gerber Technology opened its Innovation Center in New York City. As well as being a lab for ongoing software and hardware innovation and development, the Center also contains a fully-functioning Microfactory. The Microfactory is a demonstration of real, working technologies that are sharing data and working in symphony, showcasing the possibilities presented by a new kind of production.
The Microfactory workflow starts with a browser-based eCommerce website designed to simulate the consumer buying experience. From here, visitors can “place an order” that will feed directly into the production queue once their choice of product is complemented by style and print selections and sizing information, which can be inputted manually or imported from body scanning applications such as 3DLOOK.
When the “order” is placed, Gerber’s software then takes the parameters that has been passed by the eCommerce frontend and uses these to alter a base CAD pattern file (created using Gerber’s AccuMark platform) and create a custom product. Alteration is handled through intelligent algorithms, and the resulting personalised pattern is then supplemented with material information from a library stored in Gerber’s YuniquePLM, before being converted into a print file. The same software can then aggregate multiple orders for efficiency, creating a nested marker that optimises fabric utilisation and cuts down on waste.
Once the order has been automatically sense-checked against clear, pre-agreed criteria, those patterns are then printed using a Kornit Digital Printer, which uses water-based pigment printing to produce fabric on-demand with zero toxic waste and no requirement for any inventory besides greige. The printed and marked fabric is then passed through a dryer and on to a Gerber single-ply cutting machine, which uses a computer vision system to detect and cut pattern outlines before sewing and final assembly – both of which are done on-site.
The key advantage of the microfactory model is its speed. A finished, personalised shirt or dress can move from customer order to final product, ready to ship or be collected, in less than an hour. And the Gerber team has collaborated with designer Stephanie London to extrapolate those results to a complete collection of new styles, with the entire design, simulation, production and finishing process being accelerated from the 50 weeks the classic model requires, to just 4 weeks.
But as well as being far quicker than traditional manufacturing, the microfactory is also highly automated; the production queue requires just a single operator to oversee printing and cutting, with the output speed of the printer synchronised to the input speed of the cutting machine. Sewing parameters are set during the design process and then, via PLM integration, uploaded to the sewing station – giving the operator a clear operational breakdown. And as the cutting process proceeds, real-time status updates can be both analysed for factory efficiency monitoring and machine maintenance, and exposed to the person placing the order.
The Interline has visited the Gerber Innovation Center and seen the microfactory in action, and as impressive as it is as an example of integration, it illustrates a more important and more fundamental change from the traditional factory. Rather than manufacturing being triggered by a bulk order, a microfactory like the one assembled by Gerber and its partners is entirely demand-driven – products are not made until they are ordered.
With the Stephanie London collection as evidence, the benefits of this on-demand model are compelling. A single product created in an onshore microfactory can carry the same retail price but achieve close to 5% additional profit to the retailer alongside the other clear advantages of on-demand production: tenfold speed to market increase, personalisation, improved fit, guaranteed transparency, full target-price sellthrough, and a vastly reduced requirement to hold inventory.
And although Gerber and its technology partners founded their microfactory as a proof of concept, similar factories are already springing up elsewhere in the USA and around the world. As this new, in-country infrastructure develops, brands will be able to tap into new resources for sample creation, short-run manufacturing, or on-demand, personalised production. In the near future, there will be a very real possibility of moving those segments of your business to an onshore “pull” model rather than the long-standing, risk-prone offshore “push” paradigm.
But building microfactories in consumption markets like the USA and Europe will not solve fashion’s broader manufacturing challenges by itself. While a microfactory can handle limited-scale production and customisation at lightning speed, even a network of them will not be able to shoulder the burden of producing in the kind of volume that the mass market requires.
Micro to macro.
Unlike other technologies, where the leap from proof of concept to application at scale is difficult to envision, the microfactory model can be extrapolated to enterprise scale without the need to reinvent it.
Whether you’re producing a limited run in a nearby city, or sending a larger order overseas, the same technologies and the same principles can deliver comparable results. Both models rely on using algorithms to predict trends and demand curves, and then leveraging this information to drive digital product development that can be constantly refined and collaborated on in a virtuous loop of 2D pattern design and 3D simulation. The micro and macro-scale factories of the future both heavily feature automation, whether it’s feeding an eCommerce order directly into the production queue, or using telematics and dashboards to oversee assembly and finishing, and monitor delivery timelines from a continent away.
From a financial perspective, this is good news for brands that have, pre-pandemic, worked towards digital product creation, since the same tools – Adobe Illustrator, 3D simulation, and PLM – that support the creation of “ready to manufacture” virtual samples can also feed the production cycle. From pattern files to tech packs, the same outputs can become the inputs for both on-demand production and mass automation.
Within the factory itself – micro or macro – the same combinations of digital tools can work to minimise waste and maximimise responsiveness in both push and pull models. Whether you are making a small run or producing at volume, order aggregation and nesting tools will be able to improve efficiency and material yield. And whether you’re making personalised garments or large quantities of basics, the same Internet of Things (IoT) technology can automate the integration from digital printers to single or multi-ply cutters, and on to sewing machines.
There will, of course, be more specialised scenarios. Made-to-measure is one example, and cut planning and roll management also require dedicated modules, but for supply chains to achieve the level of flexibility the market demands, each of those tools will need to be connected to the same digital workflow.
From edge cases to more common applications, success in the new reality is likely to be determined by the degree of connectivity that brands and retailers can build within their own operations as well as with their strategic supply chain partners. In a fully connected supply chain, a product or collection can then be assigned to the best possible production channel. Short runs will be made onshore or nearshore in response to real-time demand, while more predictable, high-volume production will continue to be made offshore at lower cost, but with quality, speed, efficiency, and transparency all enabled by smart, connected software and hardware.
As we move further into this new reality, information collected from eCommerce storefronts will then drive a continuous loop of iteration and improvement, with rapid output of new designs and two new models of production being driven by the same digitally integrated supply chain.
Meet the microfactory
Like any digital transformation, reaching that end goal will be a multi-stage journey. But unlike other technologies, where the potential is mostly theoretical, microfactories are already up and running, and the components within them are already proven in their own rights in other factory settings.
To take a first step towards the future of production, consider booking a virtual tour of Gerber Technology’s Innovation Center from August.
About the sponsor: Gerber Technology delivers industry-leading software and automation solutions that help apparel and industrial customers, including over 100 Fortune 500 companies, improve their manufacturing and design processes and more effectively manage and connect the supply chain, from product development and production to retail and the end customer. With customers in 134 countries, Gerber Technology has a global team of passionate experts to support companies in apparel and accessories, personal protective equipment, home and leisure, transportation, packaging and sign and graphics industries.
Based in Connecticut in the USA, Gerber Technology is owned by AIP, a New York based, global private equity firm specializing in the technology sector and has more than $3.0 billion assets under management. The company develops and manufactures its products from various locations in the United States and Canada and has additional manufacturing capabilities in China. Visit www.gerbertechnology.com and www.gerbersoftware.com for more information.
