Wednesday, 17 July 2013
How to Manage Fashion Logistics Pipeline
Uncertainty in business is often dealt with by using forecasting. However when it comes to fashion forecasting is not always accurate. Short life cycles cause many problems with forecasting and so it is down to fashion logistics to come up with ways of coping with uncertainty and making fast changes to cope with trend rises and falls.
Short lead times can reduce the risk of errors being made as the forecast horizon is also shortened. It is still focused on the time it takes to design, produce and ship the products. There are three lead times that have to be managed effectively in fashion:
• Time to market – the time it takes to seeing a potential opportunity and translating it into a product that can be sold.
• Time to serve – How long it takes for customers to place an order and to deliver their order in a time period the customer will be satisfied with.
• Time to react – The time a business is able to respond to the volatile demands of the customer.
Time to Market
In the fashion industry it is essential to be able to spot trends and respond to them by creating suitable product lines as quickly as possible. Those failing on speed are faced with missing excellent sales opportunities and find themselves with excess stock that won’t shift as the products arrive after the interest has died down. In order to manage time to market companies have to be focused on being more flexible. Reducing the sizes of each batch in the manufacturing department and using CAD and CAM helps to ensure product changes can be made throughout the season and the duration of the cycle.
Time to Serve
In the past orders were made months ahead, around 9 months approximately. The time it takes to deliver the goods is not really the problem; the problem lies in the time it takes for orders to be placed and the suppliers’ processes. Batch based production methods contribute to long pipelines and each process has to be managed effectively to reduce stock outs and obsolescence. As these cannot be banished completely the need for excellent reverse logistics continues to become more valuable in fashion logistics with each passing day.
Time to React
In an ideal world every brand will be able to respond to the demands and orders of their customers instantly. However there are barriers that get in the way such as the long lead times between time to market and time to serve. It is vital that the reaction time for those in fashion is extremely fast and responsive. Keeping an eye on trends is an hourly job and spotting the changes can gave a huge effect on the success or failure of the products.