An Overview of Demand Management through Demand Supply Chain
Read this article researching the challenges in the fashion industry to respond to ever-changing consumer tastes. While reading, think about industries other than fashion where managing production capacity is an ongoing task.
Introduction
The fashion industry has seen significant transformation in recent past. The rise of globalization trend in last few decades redefined the production strategy where outsourcing prevalent among many top brands. In order to remain competitive, many corporations feel they must send some of their jobs offshore because their competitors have already done so. Price combat among the brands urges for offshore production, on the other hand, product variety and quick replenishment complicates the manufacturing and distribution, because fashion industry is predominantly dealing with the products which are characterized by short product life cycles, volatile and unpredictable demand, tremendous product variety, long and inflexible supply processes, and a complex supply chain. Moreover, the evolvement of fast fashion brought new consumer groups and also enhanced the consumption by the existing groups. The consumer taste has changed over time, and the tendency is more varieties in short period. Since the 1980s, a typical life cycle for fashion apparel had four stages: introduction and adoption by fashion leaders; growth and increase in public acceptance; mass conformity (maturation); and finally the decline and obsolescence of fashion. The impact of the change is multidimensional, and its influence on the business is big. The supply chain is lingered and span is widened because of outsource potential from many sources.
The complexity and the span of the fashion supply chain draws attention
of the academicians and practitioners which results many studies on the
supply and demand management. According to Canever et al., the
increased complexity, diversity and dynamics in consumer demand was
forcing the whole business system to be more complex, more flexible, and
more dynamic than ever before. The complexity propagates towards the
supply chain among different stakeholders. The list of stakeholders in
fashion chain is long, i.e. fibres, machinery and chemicals), manufacturers (clothing and
textiles, including technical textiles), retailers and fashion bureaus;
post-consumer actors; service providers (software, consultants, press,
industry associations) and independent experts (scholars), the supply
chain (SC) . and it grows truly complex as de Brito et al. state.
The trend of outsourcing extended the span of company's operations and
increased dependency to the external parties. Outsourcing is being
driven by a desire to reduce the cost of operations, and the need for
business flexibility to respond quickly to changing markets.
The present fashion market is demanding and such dynamic market asks
products to be sometimes delivered even in three to four weeks' time
from design to stores. The flexible nature of the market compels
traditional operations to adapt agile strategy. As the fashion product
supply chain is quite long and often consists of many different phases,
therefore meeting the demand of the market is challenging. Although
often the raw material and initial production process (such as weaving
and stitching) may remain the same for multiple products from the same
retailers, yet supplier has to start the raw material procurement and
production process way before the order is received from retailers. A close collaboration throughout the chain
is a must as operations and manufacturing steps are interdependent.
Because current competition does not just concern the individual firm
but, rather, involves the entire SC.
Christerson and Appelbaum state that most firms which market
brand-name labels in apparel do not take part directly in any
manufacturing activities, but focus on design, marketing and retailing.
Manufacturing operations are mainly outsourced under the direct
supervision of the brands or through the third party agents. As denoted
by Gereffi, generally the SC is led by large retailers, branded
marketers, and branded manufacturers who set up decentralized production
networks in a variety of exporting countries. The evolution in fashion
industry reformed from the customary supply chain management (SCM),
which is apparent in many studies. Because of the extended external
network and lack of direct control in manufacturing demand management is
challenging. Demand change management (DCM) emerges as an effort of
combining marketing with supply process for handling the demand. The
approach of combining the demand chain and supply chain management has
brought by the academicians at a later stage as a succession of DCM,
which is quoted as demand supply chain management (DSCM).
This study focuses on DSCM which is based on a systematic literature
review of textile and apparel supply chain and also demand chain
management of the forerunner fashion brands. The study is in search of
two principle research questions: How the demand-supply is operated by
the retail brands which deal with more fashion sensitive and less
fashion sensitive apparel products? How to manage and organize the
demand supply chain (DSC) based on fashion sensitivity? To clarify these
issues, textile-apparel demand and supply management of the DSC is
studied through a literature review. The study concerned with the
evolution and explanation of DSCM. To understand better the DSCM,
present status of the fashion market is studied and also analysed how
the market is evaluated among the brands towards quick response
settings. To get the picture about the complexity of the fashion supply
chain, the textile and apparel processing stages are briefly discussed
by dividing the operations from the supply side and demand side.
Afterwards, composition of DSC in textile and apparel sector and its
consequences are presented.