Fashion Supply Chain and Logistics Management

Yi Wang

• Editorial: Routledge
• Año: 2018
• ISBN:
  9781315466514
• Edición: 1
• Categoría: Negocios y empresa
• Categoría: Negocios en general

The fashion industry has a dynamic, ever-changing landscape. The last decade has seen a shift in consumer expectations and a heightened dependence on efficient and effective supply chain management. These shifts in the consumer mentality have already forced apparel retailers to adapt, making changes throughout their organisations to maintain consumer loyalty. This new text provides an overview of the latest trends and advances in fashion supply chain management and logistics, including:

• The fundamentals of fashion supply chain management
• Strategic management of the fashion supply chain, including the planning aspect of management
• Technology in fashion supply chain management
• Radio-frequency identification (RFID) and interoperability

Drawing on the expertise of academics, researchers and industry experts, including a wealth of real-life international cases, this book is ideal for advanced undergraduate and postgraduate students and academics of fashion management, logistics and supply chain management, as well as practising professionals.

1

BASIC CONCEPTS OF THE FASHION SUPPLY CHAIN

1.1 Introduction

The fashion industry has a dynamic, ever-changing landscape. The last decade has seen a shift in consumer expectations and a heightened dependence on supply chain management (Towers et al., 2013; Duclos et al., 2003; Bruce et al., 2004). Consumer trends suggest there will be a wider demand for a higher quality of product, greater transparency within the supply chain, and through increased economic stability consumers will begin to spend more on their apparel products. These shifts in the consumer mentality have already forced apparel retailers to adapt, making changes throughout their organisations to maintain consumer loyalty – an imperative in today’s market (Grover & Srinivasan, 1987; Dickson & Ginter, 1987; Krajewski et al., 2005; Teece, 2010).

Furthermore, due to the importance of the supply chain as a point of competitive advantage (Li et al., 2006; Chan et al., 2002), academics and practitioners are predicting a change in the focus of the apparel supply chain such as customisation, lean, agile, flexible and responsive (Melnyk et al., 2010; Reicharhart & Holweg, 2007; Holweg, 2005).

Today, the success of apparel retailers is due to their understanding of two main areas of business: responding to consumer demand and developing products/services that suit the demands of the market. Without a well-developed supply chain, retailers will struggle (Teece, 2010; Porter, 1980). A supply chain will articulate the logic and provide data and other evidence that demonstrates how a business creates and delivers value to consumers (Teece, 2010; Melnyk et al., 2010). The provision of a business determines the basic backbone of the company: target market segment and supply chain management.

Table 1.1 provides a summary of the differing definitions of a supply chain, according to academic publications over the years.

TABLE 1.1 Definitions of supply chain

Reference	Definition
Duclos et al. (2003, p.448)	Encompasses every effort in producing and delivering a final product or service from supplier’s supplier to the customers’ customer
Chen & Paulraj (2004, p.124–125)	Includes all activities needed to create value: procuring raw materials, converting them into finished goods and offering them to the end customer
Wadhwa et al. (2010, p.150)	A set of interconnected nodes which source, plan, participate, make and deliver different phrases of the value-addition process

All three definitions include some aspect of a process, an interlocking of different activities, leading to a finished product or service. It is these interlocking processes that have to adapt to changing trends in management styles, business models, consumer demands or emerging external factors. A more in-depth analysis of some of the ways the demands of the apparel supply chain are shifting will be provided after gaining a greater understanding of a basic apparel supply chain structure.

1.2 Supply chain and supply chain management

Kim et al. (2013) have simplified the reaches of an apparel supply chain to two main areas: supply and retail. There are two main approaches to sourcing products: in-house sourcing and outsourcing. In-house refers to the products and supplies being made by the company themselves (internally), using their own facilities. Outsourcing is the utilisation of an external supplier or partner by the company to make their products. Again the two main approaches to channel strategy are provided: centralised and decentralised.

A centralised strategy means that all key decisions including price, product mix and inventory are tightly controlled by the focal firm. A decentralised approach allows the focal firm to distribute its functions, providing a more agile structure.

Supply chain management (SCM) has become an imperative in today’s apparel industry. Table 1.2 provides a summary of the main definitions.

TABLE 1.2 A summary of the main definitions

References	Definition
Duclos et al. (2003, p.448)	Integration of all process within a supply chain into one seamless process. Encompass the processes necessary to create, source, make and deliver
Wadhwa et al. (2010, p.147)	The management of all the below which will increase value in the product through the integration of these supply chain processes
Wadhwa et al. (2010, p.147)	Information technology, rapid and responsive logistics services, effective supplier management and now a higher focus on consumer relationship management

These definitions suggest the management of a supply chain is the ability to integrate all of the processes within a supply chain, seamlessly. The only main difference between the more recent definition and the older definitions is the reference to specific technologies that aid SCM, along with the modern focus on the consumer and their growing influence over the apparel industry.

An apparel retailer’s supply chain must maintain consistency with all areas of their company, their corporate strategy and its business environment, including changes enforced by their consumer as well as internal and external issues, problems and future trends that may threaten profitability (Djelic & Ainamo, 1999). In order to fully achieve consistency all partners of the supply chain need to be efficiently coordinated: vendors, outsourcing partners, distributors, suppliers and consumers (Lee, 2004; Porter, 1986). This consistency will allow retailers to become more effective when adapting to changing market conditions such as those suggested above (Christopher et al., 2004; Masson et al., 2007).

Academics have understood the importance of SCM in coordinating amongst all aspects of the supply chain ever since the focus moved from retailers driving the industry to the consumer gaining greater influence (Cousins, 2005; Teece, 2010). In order to fulfil customers’ requirements companies have had to focus their resources on the efficient management of their supply chains (Schiele, 2006; Cousins, 2005; Towers et al., 2013). Since this shift it has become arguable that the SCM holds a greater role within an apparel company than any other organisational function, especially when addressing social and environmental responsibility (Tate et al., 2010), a consumer trend of increasing importance (Bendell & Kleanthous, 2007).

With an increase in the complexity of today’s supply chain, through the competitive environment becoming international, more dynamic and customer driven, there is an ever-increasing need for firms to look beyond their own borders and manage their entire system, processes and activities (Duclos et al., 2003). Manufacturers cannot maintain large volume production while balancing cost efficiency with increasing levels of change and uncertainty. A need arose to align their supply chain partners with a common set of goals to ensure all elements are focused on the impeding supply chain demands: flexibility, speed and cost (Wimer, 2001).

With the focus on optimising core activities, maximising speed of response to changing consumer demands (Chase et al., 2000), reducing lead times and improving efficiency, there is an increasing need for a responsive approach to SCM (Bruce et al., 2004). Moreover, firms have begun to look further into areas of delivery, flexibility and innovation in order to develop competitive advantage (Duclos et al., 2003). All of these areas of increasing focus have one generalisation between them: the aspect of time. It has been said that one way to achieve this responsiveness is through SCM (Duclos et al., 2003).

1.3 Supply chain environment

The contemporary business environment is subject to intense competition and dynamic environmental changes: short product life cycles, changing demand pattern, dynamic market, presence of multiple competitors, customer demand for personalised products (Wadhwa et al., 2010), mass customisation of product, and increased variety of products (Chase et al., 2000; Reicharhart & Holweg, 2007), better service, increased reliability and faster delivery (Duclos et al., 2003). Each of these changes is shaping the apparel supply chain of today in many ways; strategies to increase flexibility and quick response are being implemented throughout the apparel industry.

The increased sophistication of consumers means they have a higher expectation of the performance of apparel supply chains. Retailers are finding ways to revitalise their manufacturing capabilities to provide consumers with better products, faster, with a lower cost, personalised, ethically made and environmentally friendly (Rollins et al., 2003).

The contemporary apparel market has to compete in terms of time, cost, quality and the flexibility of their supply chains, resulting in a shift from cost-critical to time-critical manufacturing (Rollins et al., 2003). In response to this shift in focus, retailers have implemented customer-driven supply chains. Academic literature suggests three main types of customer-driven supply chain: build-to-order (BTO), just-in-time (JIT), and postponement. Table 1.3 provides a summary of the main advantages they provide an apparel retailer.

TABLE 1.3 Strategies used to implement a customer-driven supply chain

Supply chain type	Definition	Advantages
Build-to order(BTO)	The manufacture of products or services based on the requirements of an individual customer or a group of customers at competitive prices and within a short time span (Gunasekaran & Ngai, 2005, p.425)	Fast, reliable, customised (Gunasekaran & Ngai, 2005; Holweg & Pil, 2001) More effective matching of product to customer need; enhancing satisfaction and loyalty (Sharma & LaPlaca, 2005) Enables cost saving; reduces raw materials, space; and increases flexibility (Agarwal et al., 2001)
Just-in-time(JIT)	Focuses on purchasing and manufacturing items which belong to the products for immediate consumption (Ho & Kao, 2013, p.751)	Improves customer service and inventory turnover (Achabal et al., 2000) Improves product quality and reduces waste from the production system (Ho & Kao, 2013)
Postponement	The postponement of specification decisions in the production process to reduce initial product variety (Reicharhart & Holweg, 2007, p.1159)	Delays value addition until demand is visible (Wadhwa et al., 2010) Improves supply chain leanness (Zinn & Bowersox, 1988) Mitigates risk (Aviv, 2001) Promotes flexibility to satisfy the needs of product variety and quick response (Lee et al., 1993)

Wadhwa et al. (2010) have suggested three major problems facing the global supply chain:

• A lack of communication and cooperation within the supply chain

• Unnecessary complexity – too many players in the global supply chain, from raw material suppliers to retail sales channels

• Customer requirements are changing fast – difficult to achieve a level of responsiveness from this complexity.

1.4 Outsourcing and off-shoring

Rollins et al. (2003) fo...