Key Takeaways:

  • Fashion’s traditional product design and development process is inefficient and leads to overproduction, waste, and missed market opportunities.
  • PlatformE is focused on reducing overproduction and waste in fashion by revolutionizing the product design and development process.
  • PlatformE’s solution involves leveraging real-time data, creating digital catalogs, and using existing 3D design software to eliminate the need for outdated steps like sampling.
  • By providing a single point of communication and standardizing operations, the platform aims to reduce the inefficiencies of the current fashion industry infrastructure and promote collaboration between brands and manufacturers.

PlatformE, a technology company focused on drastically reducing overproduction and waste in fashion, is working with The Interline to look forward at the future of product design, development, and connected, collaborative production – and to demonstrate why that future may not be too far away.

Why fashion needs a fresh approach.

In spite of the industry’s increasing investment in technology and process innovation, fashion still works in largely the way it has for decades.

Massive up-front commitments to materials and manufacturing capacity, constant and unnecessary reinvention of foundations like blocks, patterns, and sizing, and long lead times (an average of 18 months, made up of iterative cycles of design, development, and sampling) have become the standard, making it nearly impossible for brands to react quickly to shifts in demand.

But that reactivity is becoming increasingly essential, as today consumer preferences can change in an instant – influenced by something as fleeting as a viral video – making it harder than ever to get products onto shelves during their trend windows, at the right price, and in the right volume.

The disconnect between what the market wants and what fashion brands are able to deliver is at the root of many of the industry’s deepest problems – both visible and invisible – and is an area that PlatformE has invested heavily in helping brands and manufacturers to understand and overcome.

The outward impact is easy to measure on both brands’ and suppliers’ bottom lines, and on the tab that the environment has to pay. Because of the inefficiencies baked into the traditional product lifecycle, and the length of time it takes to get an idea to market, brands have been forced to accept a steady erosion of key metrics, like retail conversions and product margins because the products they stock are not aligned with fast-changing market demand. And due to the setup of the typical supply chain, those brands also need to make, stock, and try to sell large volumes of styles – each of which has its own inefficiency route to market that relies on wasteful, iterative sampling.

For consumers, high-volume, low-cost fashion that takes a long time to produce often means low quality, disposable fashion that falls out of trend quickly. For brands and retailers, high volume fashion means making massive, static upfront commitments in an industry that changes by the day, and a lot of products that reach the market are simply never sold.

In pure commercial terms, this is a risk equation that fashion is balancing wrong far too often, and represents – according to John Thorbeck, Chairman of Chainge Capital LLC – the fundamental flaw in fashion’s business model: a misalignment between demand estimation and inventory management. And while there is a great deal of expert analysis focusing on this issue, a top-flight business qualification is not a prerequisite to observing the outcome: steep and persistent markdowns, progressive damage to brand reputation, and heaps of unsold stock sitting in warehouses and distribution centres.

This is also a vicious, self-perpetuating cycle. By implementing a 50% discount, for example, to shift overstock, brands must sell twice as much to attain the same revenue. And with every discount the margin per stock keeping unit (SKU) drops further. But because the next months-long product calendar is already underway, those products must be moved to make room for new inventory – and so a cyclical race to the bottom continues.

In the current legislative environment – and against the backdrop of the visible face of climate change – commercial risk is also tightly wound up with sustainability and regulatory scrutiny. This combination has been front of mind for PlatformE’s teams when the time came to devise a new solution that addressed the tightly interlinked nature of fashion’s commercial challenges and the industry’s environmental footprint.

Consider what becomes of products that fail to find buyers even after they’re marked down. Unless they are offloaded to outlet partners (which comes at the expense of brand reputation), donated to charitable causes, or recycled to some degree, they end up being incinerated or deposited into landfills, exacerbating the already problematic levels of pollution, waste, and resource usage that their design, development, and production lifespans emitted. A new exposé also suggests that products that are ostensibly recycled or donated through brand-owned initiatives still find their way onto landfill sites on other continents.

To get an idea of the scale of the problem, pre-pandemic the UN Alliance For Sustainable Fashion reported that the fashion industry was writing down around $500 billion (USD) in losses through the production and subsequent destruction of clothing that was made and never sold.

The growing dominance of the fast fashion model (which relies on high volumes, low prices, low quality and constant, seasonless product introductions) has acted as kindling for this fire since the turn of the millennium, with overall clothing industry volume passing the 100 billion garments per year mark in 2014.  Today, the exact figure is likely much more, with most value chains bouncing right back to their old high-volume shape after order quantities fell during the pandemic.

But behind the scenes is also the hidden impact of fashion’s inbuilt inefficiencies on the people, processes, and platforms that bring products to market. From the need to re-engineer basic patterns for essential pieces every new cycle, to the high turnover of creative and commercial staff – who can sometimes leave a brand before a single product lifecycle runs from end to end, taking institutional knowledge with them – a huge amount of human effort is expended on repetitive, administrative tasks. And due to lack of connectivity between different departments and solutions, feedback from one cycle of development is often not factored into the next, leading to an ongoing workload that leans heavily towards reinventing core principles and manually advancing steps in a lengthy, iterative, and inefficient lifecycle.

This disconnected, manual working environment has had a quantifiable impact on the level of experience and expertise available to brands in both creative and technical fields, leading to the devolution of patternmaking and other skills into the supply chain. In practice this would not necessarily be a negative thing if fashion’s systems were set up to allow brands and their partners to collaborate more closely, but in reality this closeness rarely exists, meaning that brands, suppliers, and manufacturers continue to work at cross-purposes, from disconnected information, restarting a long, wasteful process – one that often culminates in overstock – every time a new style needs to be introduced.

Replacing that process is now a major focus for fashion businesses, as well as being at the heart of a new solution from PlatformE, to be introduced later this summer.

Rethinking the way value chains are set up.

So why have these problems persisted even with new investments in technology? The answer is straightforward: fashion continues to use core tools and basic structures that are no longer fit for purpose, brands continue to start from zero with each new style, and the industry retains a closed attitude towards genuinely alternative approaches to design, product development, and production.

For example, given the all-round data / AI revolution that has equipped a lot of industries with better, more timely insights, fashion has got smarter about how it approaches trend analysis and prediction. But an improvement to planning in advance is still just an efficient form of informed guesswork. Which, in an industry that reshapes itself on the consumer end faster than perhaps any other, represents a fundamental disconnect between how demand is sensed and how it’s met. This is, in other words, an innovation that has taken place around the periphery of product design, development, and production – not at its centre.

Similarly, better forecasting at the brand level does not change the equation when it comes to turning plans into finished products. For brands and their suppliers, even the most accurate forecast will eventually become inaccurate if the only way to translate that sharp prediction into a sellable goods is through a long process of repeat sampling (with low adoption rates), and limited profitability-per-product once material waste and margin erosion have been taken into account.

And while it’s easy to see how long lead times become an issue for the companies that sell products directly to consumers, persistent inequality in supply chain relationships mean that the same lengthy timelines also hit suppliers’ bottom lines in different ways. During the first six months of the initial disruption of COVID, for instance, this manifested itself in large numbers of cancelled and unpaid orders (with manufacturers and suppliers left holding the proverbial bag to the tune of $16 billion, by some calculations). This year, post-pandemic, the same forces are raising their heads again, with the heightened cost of materials seeming to fall unevenly on suppliers’ shoulders.

The shape of this relationship between brand and supplier has remained unchanged primarily for commercial reasons. Buying and sourcing teams are incentivised to increase initial markup (IMU) of goods to offset the uncertainty that is baked into the forecast-produce cycle, and this colours negotiations between brands and their producers – leading to a dynamic that focuses on finding the lowest labour cost that does not compromise on quality, and that – as a consequence – has little drive to explore a new approach.

These are two public faces of the same private reality: that suppliers also suffer from the economies of scale, the long development timelines, the razor-thin margins, and the inefficient product calendar that all sit at the heart of fashion’s current infrastructure. Technology solutions, then, need to take into account the needs of both parties – something that PlatformE has taken as a driving principle for its upcoming platform.

If this sounds like a very negative picture of fashion, well, it probably is. Very few other industries would accept the levels of inaccuracy, waste, discounting, rework, needless iteration, and inefficiency that fashion takes for granted.

But even knowing this, the struggles that manufacturers and brands have persist: the inefficient and outdated processes that plague the production and supply chain resulting in delays and missed opportunities; the long product development cycles hinder agility and responsiveness to ever-changing consumer demands, risking the relevance of designs upon release; low conversions and thin profit margins haunt fashion retailers as they struggle to engage discerning customers and contend with fierce market competition.

And as the archaic ways of sampling and then reading products continues, the industry generates a significant amount of material waste, while overstocking perpetuates inventory management burdens.

Distilled down this way, it’s clear that fashion needs a new way forward – one that fundamentally shifts the landscape of both demand and supply, at the same time as reducing risk, eliminating unnecessary work, standardising operations, and mitigating environmental impact as far as possible. Nothing else will touch the industry’s current crises.

But is that new way forward actually feasible? And what will it take to make it real at the scale that fashion needs – not just brands and retailers, but their supply chain partners?

Solving the problem, at scale.

The path towards a better fashion industry must hit a few key destinations: allowing the industry to react to trends quicker, to build new styles on top of proven foundations, to produce in quantities that the market and the planet can sustain, and to revitalise its core business model by reducing risk, slashing excess inventory, and protecting brands and their partners.

This is a tall order, and reaching these destinations will require the right technology – at both the platform level and in terms of infrastructure and hardware – to support this change at scale, and will also need the buy-in of both brands and their suppliers.

Do those platforms exist today? And are they built on top of investments the industry has already made, or do they represent an entirely new set of technologies?

The answer is likely to be the latter. Fashion has made considerable progress in building and piloting the various technologies that will underpin the necessary next stage in its evolution. From 3D design and the broader ecosystem of digital product creation (DPC), to direct-to-fabric printing, item-level traceability, and automated, intelligent cutting hardware and connected sewing machines, the building blocks of a more modern fashion factory – one that’s designed around the principle of producing only what the market actually needs, not an approximation of what it might want – are already in place.

Instead, the most significant missing piece is the platform – a single bridge that can bring together brands’ needs for efficiency, sustainability and profitability with manufacturers’ ability to deliver against those expectations. This is what PlatformE has set out to build.

An ideal solution, then, would focus on the way carry-over styles are made and set reliable standards that guarantee both the factories’ production capacity and top quality. At the same time, it would give brands the freedom to explore new creative avenues and push the boundaries of their designs with the confidence that the underlying patterns remain producible without lengthy and unsustainable cycles of sampling.

In the best-case scenario, brands and their suppliers would share a digital catalogue showcasing comprehensive details, including pricing, lead time, and other essential information. This powerful capability would give brands the freedom to pursue smaller batch production, accelerating their time-to-market and facilitating experimentation with limited runs tailored to specific locations.

The shift would be possible by leveraging real-time data and these digital catalogues, the ability to plug into existing PLM and 3D design softwares and eliminate the need for samples and other outdated steps. The use of real time data in this context would unlock faster decision-making, increased adoption rate, and less time spent on manual planning.

The traditional processes would undergo a significant change for good, moving away from starting each new style from scratch. Instead, there would be a move towards basing new designs on pre-existing and already validated “chassis” as a solid foundation. This change would mean smooth communication between suppliers and encourage the sharing of product catalogues based on these chassis. With this setup, individuals can easily order samples and then move on to bulk production with reduced risk for both brands and suppliers. This proves especially advantageous for suppliers who have faced particular difficulties in meeting the increased demand and adapting to market dynamics.

Through the use of real time data, both brands and manufacturers would be empowered given a single point of communication to cut down on the inefficiencies of the current status quo of spreadsheets, countless emails and phone calls.  This way the core pain points are addressed through standardisation, design for manufacturability, sandbox environments for co-creation, cost predictability, real time price information, accurate inventories and lead times that will lead to more informed decisions.

A big step in this direction, providing a new foundation of connectivity and collaboration at the core of fashion, at scale, could be just around the corner. Stay tuned for more from The Interline and PlatformE later this summer.