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.
Evolution in the Fashion Industry
Adaption of Changes by the Brands
Since the introduction of first jeans in 1873, Levi's is one of the world's largest brand-name apparel marketers with an unparalleled global presence of more than 100 countries which are sold under the brand names Levi's and Dockers. The changing and demanding trend in fashion business had an extensive impact on them. They explain that it was under pressure to lower the prices of its clothes which has put pressure to reduce workforce and cease operation of some of its own facilities. The global outsourcing trend in the early nineties pushed them to outsource from less expensive resources to keep them competitive. Levi's forced to reorganize its strategy which resulted affordable Signature brand. Although they were offering more affordable priced product to the customers, they were putting effort on providing more options to the consumers. Levi's have been trying to customize jeans for several years, offering consumers choices within a range of style, colour, and fit, which was not a successful campaign at the end. But recently they have re-launched the mass customization concept offering "Made To Order" jeans for individual customers. In addition, Levi's emphasized on sustainability through green campaign, better cotton initiative, waterless products etc. So, they are not following the footsteps of fast fashion, but yet try to offer versatility in their product range.
Nevertheless, Levi's was struggling with the flourishing aptitude of
less expensive and trendy products as ecological campaign is also not
uncommon by those brands. It is not only the low price, ecological
product, fit, brand image that is offered by the brands which makes the
difference, but the consumer behaviour and market need is one of the
chief moderators. Barnes and Lea-Greenwood argue that there has
been a decline in the length of fashion product life cycles which has
put pressure on retailers to replenish more frequently as they simply
need more product ranges to keep up to date. Fashion from the catwalks
that might have been exclusive in the past is now often widely available
on the high street in weeks. The prime user of
fast fashion concepts like Zara, H and M, Gap organized their operations
to refurbish products many times in a year. Firms like Inditex (Zara)
and H and M are able to produce apparel from design to distribution in
three to eight weeks, which allows them to renew the
stores frequently.
Zara is one of the pioneers to use the fast fashion concept to
manufacture and retail clothing successfully. Zara introduces
approximately 11,000 new products each year, resulting in a much shorter
product shelf life. From the drawing board
to store racks, new fashions can be brought into the markets in 2 weeks. The traditional product development and product
offering which was based on two main seasons is extended. According to
Runfola and Guercini it is increased up to four or even six
seasonal collections. From the design point of view, it is continuous
product development round the year where seasons have an impact to
develop products rather than the collection based on season. It is clear
that the target is to offer a wide option for the customer according to
the current trend and also at an affordable price.
Runfola and Guercini highlight the international expansion of
some successful fast fashion companies (namely the two leading examples,
Inditex-Zara and H&M towards foreign markets, especially towards
European countries. Zara has over 2,000 stores strategically located in
leading cities across 88 countries. Their international
market positioning places it in direct competition with some of the most
skilled operations in the business, including Italian fashion giant
Benetton and U.S.-based Gap and The Limited and also
H&M. The whole process of supplying goods to the stores begins with
cross-functional teams–comprising fashion, commercial, and retail
specialists–working within Zara's design department.
They have their own tightly linked and vertically integrated SC that is
attributed by many as key to its success.
Almost uniquely they have developed SC processes that enable them to
capture ideas and trends in the apparel market and to translate them
into products in amazingly short lead times, through
closely connected, highly synchronized arrangements with internal and
out-sourced suppliers.
Zara's specialist design team constantly collects the customers'
feedback. A creative team consists of over 200 professionals forward
those to product development. Besides efficient design process, they
have organized material sourcing and product manufacturing which are
strategically located in different places. Raw materials are procured
through the company's buying offices in the United Kingdom, China, and
The Netherlands, with most of the materials themselves coming from
Mauritius, New Zealand, Australia, Morocco, China, India, Turkey, Korea,
Italy, and Germany. The product range is
strategically divided in order to produce the fastest among fast from
the adjacent facilities and the least amongst to take competitive
advantage of relatively inexpensive resources. It also uses a
postponement trick in its SC by keeping the utmost raw material in
unprocessed form. The material or fabric is also held in "Greige" (i.e.,
undyed and unprinted) and, if demand for a particular garment turns out
to be higher than expected, local manufacturers can then quickly
manufacture additional products.