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The New Fundamentals for Supply Chains Center on Getting This One Thing Right

In a little more than a decade, mobile phones have gone from basic flip-open clamshell-style designs to hosting powerful biometric software capable of fingerprint and facial recognition, and in that same time, the apparel industry has transitioned from manufacturing product and pushing it to consumers, to manufacturing product and pushing it to consumers…who are now significantly less interested.

In short, the changes in apparel supply chains don’t reflect how speedily things are shifting in reality.

Companies have gotten lost in the melee of margin compression, trade unrest, and debating whether to buy or not to buy into blockchain, and many have failed to realize their focus is misaligned and their movements still too mechanical for the fluidity of modern fashion.

In a keynote on “The New Fundamentals” at Sourcing Summit New York Thursday, Jesús Vega, former managing director of Inditex-owned Zara, said, “Our companies, to be honest, are not ready to give answers to all these new situations because our companies are like armies. They are organized, they are hierarchical, it is much more important to obey than to imagine.”

Apparel companies still aren’t equipped to respond to the new realities of retail. And whether it seems that way or not, technology won’t be the panacea.

“This is not technology, this is not techniques, this is not MBAs, this is not to follow the leader,” Vega said. “You shouldn’t follow the leaders in the market, you should follow only one leader, which is the customer.”

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There has been a “Freddie Mercurization” of consumer habits, Vega said. And quoting the Queen lead vocalist’s lyrics, he added, “Our customers want it all, they want it now.”

But to deliver on that demand for “all,” the right technology and an appropriately digitized supply chain won’t suffice. The new fundamental for supply chains today, is really an old fundamental that was cast aside when mass production and margin pressures started controlling the conversation. It’s about people, according to Vega.

Considering a writer and the tools she needs for success, is it about having the best computer or having an innate skill set? Similarly, the best apparel businesses aren’t made on digital supply chain prowess alone.

“If we understand that in order to be a good writer and to have the best computer in the world is not enough—moreover, is the least important part of the equation—running a business is just the same,” Vega said. As much technology as we have, he said, it’s just as important to have the right people in an organization and for those people to be motivated toward a similar goal of learning and feeling what the customer really wants.

A company like Zara, he said, is simply aligned entirely around the consumer.

“The miracle of Zara is not based on theory,” Vega said. “It’s not based even in technology. It’s based only on looking at the customer, getting to know what they really want, what they really dream and putting the company to work. It’s not a matter of the MBAs that will save us.”

Apparel companies need to be more obsessed about their customers than which new technology they think will save them from themselves and their crumbling fortunes.

“We are in business for only one thing…to provide pleasure,” he said. “If we are not able to provide pleasure for at least one second, we should be out of the business.”