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    From Fast Fashion To Precision Fashion, The Battle Of Low Supply Of Apparel Supply Chain.

    2019/12/26 18:37:00 0

    Fast FashionFashionClothingSupply ChainLow

    In May 2018, Hongkong Lifeng group, one of the largest apparel suppliers in the world, announced the signing of a strategic cooperation agreement with Softwear Automation, the US innovation automation sewing technology company, to establish the first fully digitized apparel supply chain as part of its "future supply chain" plan.

    Polarization of clothing prices

    In October, the US fast fashion brand Forever 21 filed a bankruptcy petition document to the court, vividly depicting the American spirit story of the rise of American immigrants. In 1981, a Korean couple migrated to Losangeles, the United States, facing a situation that many immigrant companions would face: no savings, no higher education, and few social contacts in the United States. Forever 21 came into being and used cheap costumes to please its target audience. However, Forever 21 has not grown with the millennial generation. The change of tastes and shopping habits of consumers will rely too much on the Forever 21 of the entity to get rid of the runway.

    And those survivors: Zara, H&M, UNIQLO, had to run faster, adapt to new technologies faster, change product lines faster and react faster. They invest in technology to improve customer experience in the store, and establish data management and intelligent logistics systems to optimize their products and supply chains. Make sure that the right clothing is placed in front of the right customers at the right time. This is the evolution from "fast fashion" to "precise fashion". They need to understand the tastes of individual customers and recommend "precise fashion" suitable for clothing. Otherwise, these brands will easily be defeated by social networking providers in the relentless fast fashion competition.

    Precision fashion means paying more attention to speed, accuracy, traceability and adaptability rather than mass production.

    Two, global supply chain changes

    In order to speed up and cut prices, fast fashion supply chains are often contractors and subcontractors without formal documents, mainly composed of low-cost labor and cheap land. Constantly shifting production bases to continuously seek lower wages and cheaper land, and partners willing to produce at a lower cost. This will extend the supply chain of fast fashion brands to a large geographical distance: separating the cloth making factory from the sewing factory area, and the distance from thousands of kilometers to a next production link will take several weeks.

    At first, this place was China, but with the development of China and the rising cost, the place became Bangladesh, Kampuchea and other South Asian and Southeast Asian countries. According to the global trade data released by WTO, China's share in the global apparel trade market has been shrinking in recent years. At one time, South and Southeast Asian countries were regarded as China's pursuers and strong competitors in clothing trade. Now many domestic manufacturers have moved their production bases here.

    Fast fashion brands continue to exert price pressure on production bases, split production links, and do their best to reduce production costs until they find that they have to react immediately to the trend of sudden changes in Instagram. As technology has become more advanced and can replace the cheap labor force that maintains the apparel industry, the brand has invested heavily in automation and digitization. In order to cooperate with them, the supplier moved the production center closer to the junction of infrastructure, raw materials and target markets, so that the brand could save valuable turnaround time.

    It is often misunderstood that automated production is mainly to reduce production costs, but in most cases, this is to shorten the delivery time and speed of the shelves, to meet the needs of consumers for faster delivery. For precision fashion, instead of going through the whole production cycle and returning products from Asia, it is better to directly establish local supply chains and directly produce them in close proximity. Although the production cost of products will be higher, they can shorten their entire cycle to 1/4, and the whole process will take only about five weeks.

    Three, low valley war

    This is a battle of low prices. Those factories that supply Adidas, Nike, Puma or other international clothing brands are under increasing pressure from their customers. The average delivery time has been shortened to 90 days from 120 days 4 years ago. Now it may be 60 days, and even more, the delivery time of some factories is much shorter. The rapid change of fashion trend requires the flexibility of factories and the grasp of wind direction. Whoever can respond faster can win the victory.

    Many companies including China have rapidly invested in digitization and automation, emphasizing precise fashion, demanding less production, short selling period and quick response to the market. This has brought advantages to the countries with perfect foundation and mature logistics, and at a certain distance, China's natural advantages have come back again. Even so, factors such as Sino US trade war and wage rise still force some companies to transfer their production overseas.

    The new technology is changing these garment factories, making it more profitable to directly establish the local supply chain. The Tianyuan clothing factory in Little Rock is expected to produce about 1 million 200 thousand T-shirts a year, and the cost of each piece is about 33 cents, which is much less than the cost of low labor cost countries, and the time is shorter.

    Of course, such a huge change will require a corresponding price, and many clothing retailers and factory stores will be closed down. And this price is just like a stepping stone to this low point war. There are still some people who can step over the experience and lessons of their predecessors and go up step by step to create a new fashion supply chain.

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