Fashion is at a crossroads.  The need for total digital transformation has never been so imperative, but at the same time that goal seems to be moving further out of reach with each passing week as more touchpoints, projects, challenges and initiatives get added to the mix.

This ever-shifting landscape is being constantly shaped by changing, global market forces.  This was the case before the COVID-19 pandemic, and it’s only become more pronounced today.  From fluctuating consumer demand to factory connectivity, fashion is being rapidly forced out of its comfort zone – away from the traditional linear supply chain and towards what we refer to as the intelligent, data driven, continuous value-chain loop.

Every way forward from here relies on technology: from core design, development and sourcing solutions to emerging technologies like AI, 3D virtual showrooms, and smart, automated manufacturing.  These will soon become necessities as fashion moves from operating according to the traditional supply chain, to truly intelligent, demand-driven production.

Traditional supply chains versus demand-driven value chains

The traditional supply-chain model is linear, siloed, and in many cases, it’s hidden from the consumers because the brands commissioning the orders have very little insight into what’s actually happening when they send something into production.  This is sometimes referred to as the “black hole” of the supply-chain, and that lack of visibility has become a big problem for brands who have been blindsided by ethical and environmental scandals.

But nevertheless, the traditional model continues to dominate, placing total emphasis on the physical design and development of merchandise that is then sent off for manufacturing in bulk.

In a traditional supply chain, brands and retailers output technical specifications (“tech packs”) and then pass these on to their suppliers – often by email, in PDF form, or via portals or direct access to the customer’s PLM solution – who are asked to make the products according to the specifications, in large volumes, and then pass them on to logistics companies who transport them to distribution centres or direct to retail outlets.

Over the last four decades, that traditional model has been stretched way past its limits.  Fast fashion in particular has changed the game, making the paradigm of producing wherever the lowest labour can be found unsustainable.  Today, consumers expect such rapid turnaround of new styles, in such high volume, that iterative evolution simply cannot keep up.  And in the process, unfair labour practices and environmental harm are becoming more common.  And as the landscape shifts more dramatically, towards smaller orders with greater complexity (in some cases even double digit quantities, rather than the tens of thousands we’d traditionally expect) it’s becoming clearer that the traditional, bulk supply chain is no longer fit for purpose.

An intelligent demand-chain, by contrast, is designed to connect the links – people, processes and products – that make up the end-to-end value-chain in an equal sharing relationship, rather than pushing production information from design and development into a black hole.  Technologically speaking, this means that the data inputs and outputs of a broad range of different solutions (included those from competing vendors) must become connected, with software, hardware, and people-centric processes becoming interoperable.

Reimagining the end-to-end solution stack in this way will not only improve visibility and transparency, but also power real-time collaboration between customers and suppliers, deliver new trend planning capabilities based on consumer demand curves, and allow for the ongoing, real-time, balancing and improvement of production and distribution processes.

This, in my opinion, is the real core of sustainability.  As well as delivering environmental and ethical benefits, changing our supply chains to become demand-chains will also lead to leaner, more repeatable processes.  And in turn these will become the bedrocks on which broader digital transformation is built, ensuring that any investment in becoming more demand-driven is one that any brand or manufacturer is likely to see a big return on.

First steps towards a big change

So, what do you need to consider when moving toward an Intelligent demand-chain?

First, it’s important to define what’s going to be possible and develop a vision from that.  Whether your digital transformation strategy is about pure survival – which many are in 2020 – or more concerned with improving the bottom line, you need to plan.  Every change should be subject to the 7 Ws:

  1. Who needs to be involved?
  2. What are the challenges we want to resolve?
  3. Why is it important to the business?
  4. When do we need to start?
  5. Where should we begin?
  6. How long will it take to deliver this portion of our transformation?
  7. How much is it going to cost?

An effective digital transformation project on this scale will also demand radical thinking, since the demand chain remains a forward-looking concept where there is no clear precedent to point to.  Stepping outside the comfort zone in this case will mean looking at the existing, traditional value chain from a whole new perspective.  Instead of working backwards from the long-held assumption that you will make products in volume and hope to sell them at full price, your team will want to work forwards from consumer demand – mapping a timeline of near and long-term objectives that will allow you to deliver on the strategic goal of making to demand.

Next you will need to create a blueprint for the future.  As I’ve already established, the demand-chain requires that a wide array of different software, hardware, and processes be connected.  Your vision should therefore be to move from the current situation – where manufacturing is almost entirely disconnected from design – to a new environment where new technologies bridge those gaps.

These might include:

  • Smart decision making.  AI and machine-learning systems that can deliver real-time product demand curves for merchandisers and buyers, with recommendations and insights for how to deal with the unexpected – such as changing the complexities of orders sizing and colour ratios. These new insights can then drive PLM systems to auto-create template and trigger workflows that push and pull the processes that drive material planning, virtual sampling, BOM’s, BOL’s, synthetic costing, sourcing, production planning, capacity scheduling, real-time tracking and so on.
  • Process Automation – Automated operations that can help streamline the workflow of the new demand-chain, and allow all those partners involved to focus on more value-added tasks such as improving quality, cost, and sustainability metrics.
  • Customer Experience – This level of digital transformation will also help to take the customer experiences to new heights by bringing shoppers into the process  of design with configuration or personalisation tools.  At the same time, having visibility and transparency upstream will also you to extend the same insights downstream – providing customers with unprecedented transparency, and allowing them to track and trace their purchases, learn more about those involved in the production process, or to obtain proof of the product provenance.
  • Business model innovation – A digital demand-chain can help your company strengthen its business model (for example, by expanding into new market segments, or designing new collections or categories that capitalise on trend windows you could not respond quickly enough to reach before) as well as allowing you to collaborate more effectively with both customers and value-chain partners.

Telling the story

Like any large-scale digital transformation, switching to a demand-chain strategy will involve more than just adopting and implementing new technologies.  The key to success will also lie in how you communicate the value of those new technologies to every value chain partner and stakeholder.  This should be a three step process:

  • Step one: a long-term plan that outlines your transformation journey for the next three to five years. No change on this scale should not be a quick revolution, and it will take time for all value partners to learn how to work together based upon achieving timely objectives. Keep in mind that things to adapt over time, and accept that changes and additions to the vision will need to be made as new technologies and processes come to market.   
  • Step two: a short-term quick win plan that outlines specific near-term goals that need to be met in order to remain competitive and improve efficiencies. And we have to remember that just staying in business could be the quickest win for many companies right now.
  • Step three:an evolutionary transformational change management plan that outlines the processes or tools you will completely change – and a plan that maps all the inputs and outputs across the value chain.

Let me end this article by making the point that advances in digital technologies have never, in all of my 35 years in fashion IT, come to the market so fast! From 2D CAD / CAM to PLM and 3D design, technology has helped many companies become more efficient, but the sheer variety of options today is staggering.  However, a word of warning for those reading this article: moving too quickly in the past has ended in disappointment, as brands, retailers, and manufacturers have jumped too far ahead, without adequate preparation and detailed understanding.

To truly take advantage of the combined potential of 2D, 3D, PLM, ERP, IoT, Industry 4.0, supply chain, AI, automation, transparency and other technologies, fashion businesses need to realise that the change we’re talking about isn’t a matter of turning a new page.  It’s a whole new chapter.

As a technology advisor to the fashion industry, Mark has worked for more than four decades to help the world’s best known retailers, brands and manufacturers achieve efficiency savings across their entire supply chain through informed technology investments.