Supply chain management is critical for businesses in the highly competitive and fast-paced apparel industry. An optimized supply chain can help you quickly pivot to the latest trends in the industry. Here is more information on how a supply chain management strategy can help your apparel business.
Supply Chain Challenges for Apparel Businesses
It may seem straightforward, but managing an apparel supply chain can be challenging for various reasons. For example, brands must anticipate when customers would want new items based on seasonal changes and plan ahead. Demand forecasting is another major challenge in the apparel industry.
There can also be delays in the arrival of textiles, especially when an apparel business sources raw materials from foreign countries that are thousands of miles away. Businesses have to contend with inventory management and pricing pressure, making it even more vital to implement a supply chain management strategy.
Apparel Business Supply Chain Strategies
In the apparel industry, brands typically use three types of supply chain management strategies: push supply chain model, pull supply chain model, or a combination of both.
In the pull supply chain model, manufacturers typically wait for the consumer’s demands before creating a specific product. This prevents the retailers from holding inventory that may not sell, helping them manage inventory costs. However, if demand quickly ramps up, retailers would be at risk of failing to meet the consumer’s needs.
The push supply chain model is different from this model because rather than waiting for consumer demands to build up, manufacturers and designers use market forecasting to create a product. The drawback of this model is it could either lead to overproduction or underproduction of products.
Most apparel businesses use a combination of the push and pull model, also known as a hybrid push/pull supply chain. In the hybrid model, production is typically done in smaller batches to reduce major costs associated with overproduction or waste. This allows brands to increase production levels when demand gets higher.
Benefits of Supply Chain Management Strategy
A supply chain management strategy helps your business in many ways. Not only does it increase productivity, but it also helps your apparel business remain up-to-date with consumer demands and maintain a competitive edge. Supply chain management strategies can help retailers minimize inventory costs by only placing orders depending on current consumer demands.
An increasing number of consumers prefer ethical supply, transparency, and sustainability, and better supply chain management links manufacturers directly to suppliers, allowing them to adopt more sustainable practices, including reducing water and energy consumption and preventing raw materials from going to waste.
Supplier delays and raw material shortages are some of the most significant disruptions in the flow of goods and services for a brand. Effective supply chain management boosts collaboration and communication among all organizations involved in the supply chain. This helps brands identify potential concerns related to products before they impact the market. Management strategies also make it accessible for brands to pivot to different suppliers by diversifying their network. This can allow them to avoid supplier delays.