Is Old ways of Sourcing in fashion industry Still Key to Success?

 

sourcing in fashion

By definition, sourcing is a process through which something is obtained from another place. So, the sourcing in fashion industry is process to procure apparels from other best resources. The sourcing decision is normally made on the basis of several factors. Although sourcing of anything is not a simple task. That’s why, the concern people always first try to make/develop the product by their own. If the production of particular product is not cost effective, non-availability of skills, unsatisfactory suppliers or vendors then they have to go for sourcing. There are four factors on the basis of which one can decide whether to make or source the product. And it includes cost, production capability, quality and lead time of the required product.

Cost: In some products, the product cost is not as cheaper as compare to the outsource supplier. It could be due to several factors like cheaper labor availability or cheaper raw material cost due to several suppliers. So, in this particular case, you better decide outsource the production instead of in-house manufacturing.

Production Capability: Every territory and geographic location has its own characteristics and benefits. If we consider the apparel industry examples then some areas have skilled labor of top items (jackets, upper, shirts etc). Whereas, some are good in washing capability due to its good water PH value and labor proficiency. So, here in this particular case, again you will have to make fashion sourcing strategy according to the product characteristics and classification.

Quality:  Quality is no doubt the foremost requirement of every client. If you are compromising on product quality due to unskilled labor or usage of sub-standard raw material. On the other hand, you could have option to procure the better quality with same cost. Or by paying some extra pennies for better quality from contract manufacturing. Then your first choice would be none of the other to outsource the product.

Lead Time: The product lead time is also really crucial in product development process. Some companies have expertise and running regular orders in specific products. Such companies can offer you not only competitive prices of those products but also give you a short lead time. So, in that particular case, you will definitely choose outsourcing option.

Sourcing in Fashion Industry:

The sourcing in fashion industry was use to follow the traditional ways. In which the main motive is to reduce product cost through selection of cheapest manufacturers. And in order to get cheap manufacturing vendors, you have to look for in less developed countries. This is why, the fashion industry gradually moved from west to Eastern Europe to Asia and Africa.

With the passage of time, the ways of production and processing is changing and improving. The research and development teams are continuously focusing on time high quality product with low cost. In order to reduce the cost, instead of human being, the robots are working in many industries. So, by adding these automation options, one can control his/her day to day increasing labor cost. But practically speaking, its not possible to implement it on all operations of the fashion industry. Because due to fast fashion, every time you will have to change your production lines and flow drastically. But if this addition happens practically then it can affect 231 million manufacturing jobs at risk in almost 50 countries of the world. Anyhow, it’s a long debate which can distract us from our original topic i.e. sourcing in fashion.

Sourcing in Fashion: Automation & Digitization

Furthermore, through technology the sourcing in fashion can also be cost effective as well as fast.  The R&D people also suggested some new ways through which sourcing in fashion operation can handle efficiently and even effectively. And as per them, there are two ways which can revolutionize the fashion sourcing world and it include as follows:

Digitization in Sourcing:  

It’s the requirement of every client for more transparency in production and material sourcing. Along with that everyone is demanding for shorter lead-time and increased production. All of this can happen by the help of digitization in sourcing. As per the current market scenario where speedy but customize production trend is getting hot. So, you can’t meet the market trends without digital support. The sourcing in fashion with digital mode has positive impact on China which is a big player in textile sector. Since the wages are increasing in China so it’s time to move brand manufacturing outside China. In this particular matter, digitization will help the Chinese manufacturers to streamline its product cost.

In-fact, sourcing digitization will empower the client to speak more effectively. As per the experts, there will be a time when people place customize apparel orders through their mobiles. These order will digitally sent to the manufacturers for completing the desired job.  So, the elimination in barriers through digitization will definitely help the manufacturers to speed-up their productions. And this can shorten the lead time and allow end users to communicate their requirement directly. When we look this concept in a broader way then a storekeeper can place the order directly to manufacturer.   So, with the help of digitization, the sourcing in fashion is not only fast but cost effective too. Because the storekeeper will place the order as per most recent trend of the local market. And this would definitely decrease rate of waste clothes which lye on shelves due to non-selling.

Li&Fung is currently investing heavily in digitization concept. And their main motive is to streamline their operations, transparency in production and focusing on digital-design to avoid prototype cost. The famous brands Zara, H&M and Macy’s are also focusing on same line. What they are doing, they are trying to change the whole shopping experience of the customer who visit them. They will try something to the customer and then it will be customized by the help of AI and made nearby.

Automation in Sourcing:

Automation in sourcing means you replace human labor with robots. This approach is vice versa to the traditional sourcing in fashion. Where everyone is normally prefers remote manufacturers due to low cost. But in this approach, your manufacturing is handling by robots so you try to build manufacturing set up closer to end user markets. Moreover, you have a close interaction with the end user so the product innovation or customization is possible. Along with that you can easily enhance your production speed which will shorten the lead time of high fashion apparels. Furthermore, changing in geographical location can also eliminate the huge cost and hassle of long-distance transportation/duties. In-future, if this concept runs well then there will be no inventory at all as all products are made on-request.

There is no doubt that most of the people believed that in future automation would be the major driver in sourcing decision. And this thing will happen in next few years when sourcing people prefer automation instead of labor cost. Its fact, by implementing automation, there is chance the number of people will lose their jobs. But on the other hand, the new jobs are also created with better remunerations. And these new jobs would be a bit tech oriented like data analyst, engineers, technician etc. By adopting automation, factories have even a better chance to grow. So, they could also adjust the surplus staff to other vacant posts (after some training). Anyhow, there are some practical limitations which are also discourage the concept of automation in fashion industry.

Sourcing in Fashion: Practical Approach

There are some people who don’t believe on automation and digitization approach. As per them, the apparel industry is not like other industries where production steps are fixed.  As every product production steps are different from past products due to change in fashion trends (which are already a more volatile thing of current phase). So, you can’t replace skilled workers with robots. On the other hand, some believe that digitization process accompanied with automation can be practical and beneficial. But it’s not a homogenous which equally fits and beneficial for all. As it would be more practical for some brands and may be impractical for few of them.

Sourcing in fashion through digitization and automation is no doubt revolutionary concept for fashion players. And there are so many brands which are transforming their processes to take maximum benefits from this concept. Through automation, you can’t say this thing that mass production will again shift and run in the West in next-decade. But you will see many players who will return and collect the benefits of this concept.