The supply chain challenges that arose during the pandemic underscored the importance of resilience and flexibility. It has also become clear that new technology is not enough to bridge the challenges to meet rising customer demands for speed and reliability. To capture growth and compete you need a scalable business model that is agile, data-driven, and technology-enabled. Here, the factor of Supply Chain Network Design (SNDC), also called strategic supply chain planning, comes in. The analytic side of supply chain network design helps to locate the potential for growth and provides hard data to prepare for expansion plans. The biggest trend however is to create systems that are flexible enough so that they can stay efficient with constantly changing market needs. Usha Periasamy, Director- Brand and Operations, Classic Polo in an explorative interaction with Upamanyu Borah,elaborates on their strategic approach to designing and managing supply chains to execute distribution strategies with a range of process and technology change levers essential to building resilient, competitive advantage.

What is Classic Polo’s stance in the market in terms of demand planning and forecasting capabilities in the fast fashion industry? Where the company beats others in the competition?

At Classic Polo, supply chain and demand planning are based on detailed research from market information, ERP/SAP metrics and feedbacks. Understanding the demand and supply architectures has helped to adopt a lean, agile and data-driven approach and revealed new ways to cut costs in operations, boost revenue, and offer a greater competitive edge.

There are two approaches to demand forecasting– Unconstrained demand forecasting that focusses on raw demand potential without factoring in possible constraints such as capacity and cash flow. And constrained forecasting that takes into account the limitations of the operations part of the business. We employ both types to enable the business to facilitate client orders and give the customers the best value for money while keeping the supply cost to a minimum.

To ensure the second wave of COVID-19 does not have the same devastating effect as the first, what steps are you taking to shape and measure the effectiveness of contingency plans for manufacturing and supply chain management?

COVID-19 has challenged fashion businesses of all shapes and sizes to re-look at business practices and forced many to adopt new ways of working. Knowing that the crisis will have a long-term impact, it’s time to redesign the industry’s value chain and emphasise on the importance of becoming not just more digitally adept but digital frontrunners.

Against the above backdrop, Classic Polo’s prime strength—in-house production through its state-of-the-art infrastructure offers great advantage to increase speed and supply chain efficiency. Things like materials sourcing, creative and technical design, samples, production and shipping under the same roof is a boon.  We ensure that on-demand products are produced and supplied within the best possible time while all-season fashion products are produced with utmost caution and experience—in smaller batches to avoid inventory pile-up and or capital crunch.

In short, Classic Polo is getting ready for the new normal with the help of the following parameters—proactive forecasting, rapid generation of insights, responsiveness with greater transparency and visibility, more digital collaboration with stakeholders, producing closer to raw material, and financial resilience—in place.

What would you say are the hidden pitfalls in terms of India’s garment manufacturing technologies perspective? And through what measures, the industry can take to extremes?

For the Indian garment industry, the path forward requires moving up in the value chain by upgrading raw materials and innovating products through the use of technology, and producing higher value products in terms of design, fabric, and sustainability. Very few garment companies operate on a large scale because of the lack of access to technology, finance, and operational dexterity.

New manufacturing technologies enable the apparel industry to move from labour-intensive to capital intensive production. Other outcomes of new manufacturing technology include faster production, less waste, restoring the localisation of production nearer to market so as to lower carbon footprints. 

Thanks to the internet, hyper-connected users with their devices have driven consumer expectations. This has created a necessity for brands and entrepreneurs to become quicker in the collection of user data, sales performance, customer feedback, identifying supply chain difficulties to better their functioning, changing the very nature of the fashion cycle.

Technologies are already available to make the garment supply chain more sustainable. However, most promising technologies require extensive R&D efforts, money and collaboration to produce actual tangible results. Unfortunately, it’s not enough just to follow trending technologies in apparel manufacturing. To ensure that we are applying the appropriate systems to our supply chain operations, we need to evaluate our production and identify which technologies will maximise efficiency, generate revenue and reduce costs.

 

In practice, everyone doesn’t need to use all the available technology. Even many existing garment factories don’t have latest technologies in their manufacturing plants and still they run the business successfully.

Despite the noise, it is hard to analyse the true impact of AI and Big Data on fast fashion, especially in the multi-player Indian apparel sector. Does this ring true to your experience?

We all are experiencing the benefits of AI and Big Data, as technologists continue to speculate the brighter future for AI.

In recent years, brands have been using AI to enhance customer’s shopping experience, analyse data, boost sales, forecast trends and offer inventory-related guidance. Improved inventory management is possible through AI-based predictive analytics that enable fashion retailers to learn from prevailing customer behaviour—fashion trends, purchase patterns—and plan their inventory stocks accordingly.

Big Data has a key role to play throughout the fashion supply chain, starting with the way designers create, and how brands market their garments. Today, Big Data helps brands build new strategies—by tailoring the consumer experience and enabling the customer to lead the way—which is revolutionary.

Despite the several advantages that advanced technology offers, there are also disadvantages that we cannot ignore.

AI-based software programs require frequent upgrades in order to cater to the requirements of the changing environment as the machine needs to become smarter day by day. In case the software suffers a severe breakdown, then the process of recovering lost codes and reinstalling the system can give you nightmares due to the huge time and cost involved.

However, it won’t be too optimistic to believe that all these problems will probably be fixed with time, including the issue of unemployment which can be solved only with human up-skilling.

In terms of improving the quality of wearables and enhancing customer satisfaction, what type of new supply chain innovations can we expect from Class Polo for faster production to meet market demands faster?  

Having an efficient supply chain means a brand can beat competitors on retail price and improve profitability. Having high performing operations means a brand will be able to meet or exceed customer expectations on delivery of its product. Effective supply chain management allows any brand to do just that.

Vendor managed inventory (VMI) hub which refers to the logistics distribution centre located near the manufacturer and used to store the raw material supplies, unlike decentralised distribution mode, supply hub changes the relationship between manufacturers and suppliers from one-to-many to one-to-one, simplifying the operational processes. Since the utilisation of supply hub has already achieved good results in enterprise management practices, Classic Polo validates the effectiveness of the new approach by comparing and analysing the flexibility in performance in a decentralised distribution mode. All of this ultimately leads to faster product roll out in a fast-moving market.

The customer expects great service every time, all the time. If a brand doesn’t deliver products quickly enough, consumers are not happy, and this means the company’s supply chain has failed. Especially in the modern climate, where a customer can blast a company publicly on social media, brand reputation is more susceptible to damage from preventable supply chain mistakes than ever before.

Classic Polo is omnichannel—accessible across online and offline—so its service goes a step further in ensuring an integrated, seamless experience across each one. Giving customers what they want, when they want at the sharpest price is key to keeping them satisfied, we are consciously following the golden rule and leaving no stone unturned to delight our customers.

What steps should India take to properly deliver upon its true potential in the textile and garments sector?

India is the largest producer of Cotton (30 per cent share of the global Cotton production), 2nd largest producer of Polyester and Silk, 3rd largest producer of Viscose, 4th largest producer of Acrylic and Nylon.

India is a rapidly growing industrial economy with availability of key resources such as land, power, water, manpower and a conductive regulatory framework for industries in textiles and apparel sector to thrive. The textile industry can capitalise on its strengths of extensive raw material base, large manufacturing infrastructure, availability of abundant workforce, and presence in all levels of manufacturing value chain (from fibre to finished goods) to achieve better growth rates than in the recent past. India is one of the few textile manufacturing countries in the world where all levels of textile value chain, i.e. from fibre/filament to garment manufacturing are present, in both natural and synthetic fibres. The presence of several large integrated players in the country, spread across its vast geography has proved to be of strategic advantage in maintaining this presence of complete manufacturing value chain.

This vast raw material base has adequately supported the development of downstream manufacturing value chain along with securing India’s position to capitalise on opportunities presented by both domestic and international markets.

Textile manufacturing is a labour-intensive industry and is cost-competitive in terms of manpower. India possesses one of the largest pools of young, trainable workforce with 62 per cent of Indian population being in the working age group of 15 to 59 years. Based on the current demographics of India, the current workforce is expected to sustain until 2055. With this abundant availability of manpower coupled with relatively lower costs, India possesses the necessary preconditions for this sector to thrive.

Programs like Skill India and Make in India, along with continuous development and growth in the management consulting firms in India for foreign companies, is working in favour of the developments in the Indian textile industry. The access to skilled manpower and a good market for textile products, the industry would become competitive in the global market.

So as you look ahead to the next decade, how do you see Hub services evolving within the domestic market?

The delivery time of order has become an important fact for customers to evaluate logistics services. Due to the diverse and large quantities of orders in the background of omnichannel presence, how to improve the flexibility of distribution hub and reduce the waiting time of customers becomes most challenging for logistics companies.  Today, as the development of e-commerce drives the increase of consumer demand, improving the flexibility of distribution hub to reduce the order-to-delivery time has become the primary challenge for distribution centres. Due to the high time and financial costs, order delivery is considered an important activity of logistics distribution centres.

A stabilised transport infrastructure is an essential requirement for the movements of products, whether commodities or consumer goods. It may comprise not only roads, railroads, or waterways, but also a variety of logistics nodes that support industrial and commercial operations, promoting the flow of goods and information across local, regional, national and international borders. These allow improving logistics service levels, particularly through the reduction of lead times and transports costs.

The apparel sector seems to be split among those that provide the services themselves, those that work with outsourced service providers, and those that work within limited distribution networks, or a hybrid of some or all of these. Does Classic Fashions have a preferred approach?

Brands are in need of a supply chain network that could not only satisfy efficient distribution demand but also scalable to serve any new B2B operation intended to distribute apparel to independently-owned, smaller-footprint stores. Such new supply chain network models give fashion retailers the necessary scalability to keep stores serviced appropriately across multiple formats. The fulfilment speeds and supply chain cost reductions are expected to give each location the ability to operate at their target margins while growing the business through a quickly growing B2B network of retail customers.

Today, Classic Polo handles multiple channels of distribution to ensure the following:

  • Bring outsourced volumes back in-house
  • Embrace the concept of performing multi-channel distribution within a single facility
  • Increase levels of automation

We believe there are several factors driving these trends. Arguably the catalyst is that volumes shipped through non-traditional channels have grown significantly, it is now a matter of urgency that this flow is handled effectively and efficiently.

In reaction to this growth, information systems have developed and are now capable of handling multiple channels within the same system often using the same inventory. A common inventory can help reduce shipping costs and traditional shipping methods can be leveraged to facilitate, for-example, in-store pick-ups of merchandise ordered on-line at a very minimal marginal cost of freight.

With a single facility and single information system, many physical flows can be combined into common flows regardless of channel. With common flows there is now greater movement to justify higher levels of automation, which in turn can dramatically reduce labour costs. This is particularly important for the very labour intensive e-commerce distribution channel. 

Classic Polo has been working on the conventional method, systematically till date. But with changing needs and demands, we foresee a transformation in practice.

LEAVE A REPLY

Please enter your comment!
Please enter your name here