Harry McMullen interviews Ben Balfour, commercial director at Advanced Supply Chain Group to explore the importance of supply chain solutions in the fashion industry.
The fashion industry has been one of the rare success stories of the last decade, boasting a 5.5% annual growth since 2010 amid a somewhat turbulent global business landscape. The industry turned over an estimated US$2.4tn (in 2018), according to the McKinsey Global Fashion Index, a figure similar to that of the Russian economy – meaning if the fashion industry was its own economy, it would place seventh in the national GDP rankings.
With big business comes smart solutions, and supply chain management is now an integral part of the multi-trillion dollar fashion sector. “An efficient and effective supply chain can deliver a real competitive advantage,” says Ben Balfour, commercial director at Bradford, UK-based Advanced Supply Chain (ASC).
Supply chain management is the streamlining of the flow of goods in an industrial supply chain from raw materials to the retailed product, in order to boost both productivity and economic value. Although it has been around since the early 1980s, supply chain management has such an importance in the age of Industry 4.0 as it often integrates various workflows.
ASC displays a repertoire of some of the fashion industry’s major players – headlined by Nike, Adidas and Puma. “When retailers get their supply chains right they get goods to consumers at the right price and at the right time, pleasing all parties involved,” says Balfour.
FASHION SOLUTIONS
In fashion & apparel, supply chain solutions have even more prevalence than other industries, explains Balfour. Not only is there a need for fashion brands to source raw materials before producing garments and retailing them, but there is often a difficulty in arranging customer returns and deliveries – an issue often related to supply chain management.
“Although reverse logistics [returns] is not a unique challenge faced by the fashion industry, it has a reputation for being both costly and difficult to manage,” says Balfour, who believes the issue is only going to get worse. “Returns cost retailers more than GB£60bn annually, a third of which is attributed to online purchases; a figure expected to grow thanks to emerging trends such as buy-now-pay-later.”
Returns solutions is an area of supply chain management that ASC has a wealth of expertise in. The company picked up the acclaimed 2019 Drapers Award for Best Innovation in Fashion Retail for its work with the retail giant Asos. The award was given for ASC’s Vector Bounce returns solution; a software that organises and assists in returns logistics. Along with arranging the returns, the solution seeks to stop the need for returns in the first place by providing retailers with insightful data: including return trends, sizing and existing manufacturing issues so brands can tailor its buying and production to avoid the need for returns.
“We believe our model is different because our technology is developed according to what’s required by our customers, rather than being dictated by what’s available,” says Balfour, who believes studying numbers leads to better supply chain management performance. “It’s a data driven approach with consumer trends and buying habits at its heart to enable our customers to embrace and address challenges instead of viewing these as problematic.”
A GREENER FUTURE
The supply chain management mantra has always been one of efficiency and economic value, but this is something that could be changing due a new greener business model, according to Balfour. “Online shoppers are taking a greater interest in sustainability,” he says. “The current focus [on sustainability] could produce a major shift in focus for fashion retailers who may need to switch away from the current high-volume model.”
ASC subscribes to the view that customers are consciously choosing businesses based on their supply chains, in an attempt to branch away from the environmentally harmful textile production methods that have been at the forefront of the industry for decades. Balfour adds: “Competitive advantage is becoming even more important as supply chains become increasingly visible to consumers, and ‘greener’ supply chains that minimise waste and have a smaller carbon footprint will have more influence on purchasing decisions.”
Innovation is a recurring motif throughout ASC’s work, and it is what the company believes will shape the future of supply chain managements in the fashion sector. “Whatever the future brings, technology will be at the forefront, the rewards will be great for organisations that can innovate and adapt quickly,” concludes Balfour.
