Fast Fashion: Achieving Global Quick Response (GQR) in the Internationally Dispersed Clothing Industry
Bart L. MacCarthy and P.G.S.A. Jayarathne
Abstract The clothing industry is one of the most mobile industries in the world. Global supply poses significant challenges in ensuring the right volume and mix of products within retail stores. Here we define a new concept – Global quick response (GQR) – which strives to combine the cost and scale efficiencies arising from sourcing globally with quick and accurate response to market requirements. GQR is based on lead time compression, effective information management, dynamic planning, and strong logistics. We examine GQR in the context of the new garment development process, the initial volume
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GQR strives to combine cost and scale efficiencies by sourcing globally with quick and accurate response to specific market requirements. We examine how GQR affects the major operational processes in clothing design, manufacture, and distribution. We discuss its requirements with respect to market intelligence and rapid new product introduction; network planning and staged postponement; and network capability. Different approaches to GQR are possible and two contrasting examples are discussed briefly.
2 Globalization in the Clothing Industry 2.1 Globalization and Mobility in the Clothing Industry
In the last three decades, clothing manufacture has migrated substantially from the developed to the less well developed economies. The major clothing producing nations in 2005 were China, India, Indonesia, Bangladesh, and Pakistan (Audet 2007). The growth in Chinese as well as Indian clothing production has been substantial in the last two decades. In 2002, over 70% of the Japanese and over 77% of the Australian apparel markets originated from China (Nordas 2004). Chinese manufactured clothing entering the US and the EU apparel markets grew by 43%
Fast Fashion: Achieving Global Quick Response
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and 47%, respectively, in the period 2004–2005 (Audet 2007). India has also shown considerable growth of 30% and 25% in the EU and the US apparel markets, respectively, in the period 2004–2005 (Audet 2007). The tremendous growth of China and India in these sectors has been
The supply map and the supply chain management consist of manufacturers, distributors and retailers. The marketing mix determines the product mix and the product mix helps the fashion designer to control the target market. The distributor of the finished garment later determines how the product would distribute throughout the department and discount stores. The target market will help the designer to assess the success of the garment. The selection of the garments plays a volatile role in the supply chain because without the right garment/raw materials the finished product may not result to the vision of the designer. “The
It is becoming apparent that the ever changing environment in the global marketplace requires a swifter response time from businesses and their supply chains. The era when production was moved overseas, so businesses can take advantage of low-cost labor is coming to an end, because businesses are not only competing on price but also on time. The owner of Zara, a Spanish clothing store knows this first hand, and has turned supply chain management on its ear, making his company the “envy of the industry” (Ferdows, Lewis, & Machuca, 2004).
This papers purpose is to teach fashion heavy consumers on the real price of fast fashion and how buying it affects the environment. This type of audience can be anyone who partakes in the buying of well-known cheap retail stores that have a large audience of being fast and obtainable. These consumers should have the information on how fast fashion effects are environment so it could possibly alter their buying habits to be eco-friendlier but buying either less or more sustainable clothing instead of the cheap alternatives. This audience should care about this purpose because this will affect the world now and for future generations as their environment is being mistreated because of these fast
II. Over the past few years, fast fashion has been an extremely hot segment and source to help some clothing companies increasing on their economic growth.
With 85 factories under contract and only a single one of them that produces the main material used for Lululemon’s top product, yoga pants, it causes concern in the long-term variability on production in the short run. Fewer than 3% of its manufacturers are in Canada. This heavy reliance on third-party suppliers can expose Lululemon to problems like delays and quality control issues. These issues can undermine one of Lululemon’s key selling points, their quality. To reduce the risk of this occurring, Lululemon can look into locally sourcing for a selected number of their products.
Although the Chinese apparel manufacturers would lose profitability due to rising cotton prices and competition from emerging countries, they stand to gain the most from the removal of U.S. quotas and tariffs. According to the author, in 2007, 95% of the 20 billion garments Americans made were purchased overseas. Due to U.S. trade barriers, China’s share of the U.S. apparel import was only 30%. Once these barriers were removed, Chinese apparel would flood the American market due to their low cost and dominance in garment manufacturing. Experts predict that China could eventually supply 85% of U.S. apparel. As they increase their market share in the
Second, in fulfillment, we can also see speed in responding to demand. For example, the replenishment, as well as production will be optimized according to supply and demand as quickly as possible. Besides, the fulfillment will commonly completed in one or two days, clothes flowed quickly, and without stopping, from factories to DCs to stores, where they were immediately put on the sales floor. Third, in design and manufacturing, we can find how Zara respond quickly to demand. Zara brought out new items continuously throughout the year, including both changes to existing garments and entirely new creations. The network of production had made design from conception through production and into the DC in as little as three weeks. Besides, Zara did not have to predict what would be selling six months, or even one month, in the future; it could continuously sense what customers wanted to buy and respond “on the fly.” All these operations reflect the speed-chasing and target-oriented nature of Zara business.
The Spanish retail chain Zara has unique supply chain management practices that enable it to gain a competitive advantage over other fashion retailers in the industry. Zara’s rapid response time enables the firm to quickly respond to changing fashions while deliberately under producing products. This strategy, which is supported by competencies in logistic management, design and information systems, allows the company to maintain less inventory and higher profit margins and is a key factor to Zara’s success. The firm should continue to add value by seeking new opportunities to expand in the retail market and maintain their sustainable growth.
if supplier doesn’t supply on time may incur the company the loses of the clothes out of date fashion . Huge number of tons will be consumed faster than before because of this fast fashion. This was the possible disadvantage of the fast fashion distribution system. There are a lot of advantages that offset the disadvantages of the fast fashion distribution system. We may say here fast fashion requires innovation and brainstorming to get new designs overtime to be
In the current situation, Obermeyer is facing four broad issues: production planning for their short life cycle products, operational changes to reduce costs of mismatched supply and demand, coordination issues in their global supply chain and a confusion of where to produce the garments – Hong Kong or China. The best way to mitigate the inability to meet the demand of retailers during peaks sales would be to forecast the demands with either past data or with the help of a forecasting committee. It would be ideal for Obermeyer to forecast future demand with the help of a forecasting committee. To come over the confusion of which city to continue production in, Obermeyer should choose to continue short term production in Hong Kong but the Long Term production should be in China. It is anticipated that a two years lead time of planning and production activity must take place prior to the actual sale of products to consumers. They are more highly skilled and typically trained in a
For partners of ASOS, they generally go through the same production process as ASOS own-branded dress. However, they receive the order from ASOS and its merchandisers instead of consumers. It is an important process for ASOS as understanding the product lifecycle and stock level, they can plan the introduction and withdrawal of product. Also price can be adjusted accordingly with which sales are introduced during the decline period (The Times 100, NA). However, this supply chain requires a high collaboration of functions across supply chain (Fernie, 2009). The reason why ASOS can eliminate the traditional functions of a retail store is due to its well-managed supply chain, effective stock keeping system and fast-going logistic system (Meadows, 2007).
Quick response of Zara leads it to be successful in the fashion clothing industry. Zara adopts international strategy for its operation. With vertical integration, it benefits Zara in cost aspect, however, it involves some risks. Due to our anaylysis on Zara’s operations, some of the recommendations are made to facilitate its further improvements.
Hypothesis: In an era of fast fashion, companies that adopt both global sourcing strategy and quick response strategy have better chance to succeed in the fashion clothing market.
The data also show that most clothing, shoes, toys, handicrafts are mostly produced from developing countries, mainly in Asian area, such as China, Vietnam and Indonesia. These
Hugo Boss has become known as an industry trend setter for its high quality men’s and women’s fashion apparel, shoes, and accessories. Product leadership, intimate knowledge of their market and customers, and operational excellence are what distinguish the company from others in the luxury fashion goods industry. From an operational perspective, the variability that exists as a result of designing and manufacturing short run fashion products is high. This perpetual shifting of demands and preferences makes it difficult to maintain accurate industry forecasts that result in high risk actions as manufacturing products with no guarantee of sale leading to large scale inventory systems.