Today’s consumers want fast fashion and they want it now. They want more choices, more often, at bargain-basement prices—and such demands have caught apparel companies in a chokehold. To keep their trend-conscious customers coming back regularly, retailers are requesting faster fashion cycles, a wider range of SKUs, cheaper prices and shorter lead times from their suppliers.
For many apparel makers, the latter part has proven the trickiest hurdle to overcome.
To keep costs down, global sourcing is the norm, and the lowest prices are usually found in Bangladesh, Pakistan, India and Honduras. But the supply chain is complicated and lead times are long, and every time a designer or merchandiser makes a change, it slows down the factory and hurts delivery time—not to mention the business’ bottom line.
In order to compete with the steady stream of on-trend styles stocked at the likes of fast-fashion giants Forever 21, Zara and H&M, many large apparel brands are turning to a high-tech software solution to save time, lower costs and increase speed to market: product lifecycle management (PLM) technology.
Essentially, it’s a tool that keeps everyone in all departments—from concept and design to production and merchandising to sales and distribution—connected and updated in one place in real time, no matter their location, not too unlike a social network. So, for instance, when a design or merchandising tweak is made, the entire supply chain knows about it instantly without the need for confusing e-mail threads. Or if a fabric suddenly needs to be replaced because it’s not within budget, the whole team can take action before it affects the bottom line.
“Samples cost time and money,” said Robert McKee, global fashion industry strategy director for Infor, which offers a fashion PLM that it claims “puts the lifecycle back into product lifecycle management.”
“There was a time in the industry when it took 18 months to two years to create a new line and oftentimes you’d have one in 10 concepts actually getting adopted,” McKee said.
Now, companies using PLM software greenlight every one in three samples and can crank out production, from concept to consumer, in six months or less. Not to mention, easy access to yardage and fabric prices, and the use of 3-D for previewing garments before sampling means lower production costs.
But it still takes time and money to implement and adopt these systems—a recent Kurt Salmon survey found that retailers and wholesalers were spending $3 to $5 million over a period of five-plus years—so where exactly does the streamlining come into play?
“It’s about bringing things to the surface, getting people to work as a team, ensuring collaboration, cooperation and communication throughout the cycle,” McKee said, noting that a system that includes ERP (enterprise resource planning) allows a merchandising team to build the next collection based on how the previous one fared in stores. “Say you had good sell-through but you had to sell at a heavy discount or great sales but high returns—all those things need to go back into the decision-making for the next collection. By ignoring those factors you’re going to create things that have initially good results but overall bad results.”
“It enables organizations to connect their creative teams with their supply chain to get the right products to market, on time and at the right cost,” echoed Bill Brewster, general manager of Yunique Solutions, a New York-based PLM developer owned by Gerber Technologies and developed by industry professionals with practical experience in design, product development, supply chain solutions and manufacturing.
He explained that because key stakeholders can communicate with their global vendors regarding creative direction much sooner in the product lifecycle, sourcing teams and vendors have time to do preliminary costing and to start developing materials, which in turn reduces errors.
“PLM provides visibility to the entire process of developing new products. This ensures that product delivery hits critical market dates, reducing markdowns that kill profit margins,” Brewster said.
Deckers Brands, for instance, leveraged its PLM system when the market for sheepskin, a key component in its Ugg Australia products, was fluctuating, ensuring it always had access to the raw material at the right price and ultimately saving the company $1.5 million.
Canadian denim company Silver Jeans upped its efficiency by at least 20 percent and increased SKUs by 25 percent without any additional resources since adopting Centric Software’s PLM system.
But the fashion industry is notoriously slow to invest in practical technology and a large majority of companies are happy for each department to rely on spreadsheets to manage their day-to-day operations.
McKee argued against this practice, “There’s no structure. You don’t know where you stand. You don’t know if the head of sales or the president has suggested a budget. You never have a good idea where you stand against your goal.” Given all the technology that exists today, McKee said there’s no reason apparel companies should still be conducting their businesses that way.
So why are they? “The reasons vary from company to company but from a creative standpoint very often we find that creative people, designers in particular, sometimes can be technology averse,” offered Luis Velazquez, a business consultant for Lectra North America, which unveiled the latest version of its PLM software in March, an iteration that focuses heavily on collection planning and calendar management. “What we find sometimes is if you have a more experienced design team that’s only ever sketched by hand, there can be some pushback when you try moving them to a digital platform.”
He added, “Sometimes having a structure of some sort can be off-putting to a designer… Company executives need to coach their designers that PLM is not about stopping creativity, but focusing creativity on the right things.”
“Don’t buy a PLM system to build your processes. You should build your processes and then make sure the PLM system can match your processes,” said Mark Burstein, president of sales, marketing and R&D for NGC Software, noting that PLM is better suited to larger apparel firms. “PLM can provide a lot of efficiency to companies that have at least five designers that are doing business with at least 10 factories.”
But before bringing PLM into its production fold, an apparel company needs to be sure the technology that’s chosen is the right fit. “One of the challenges that really creative people have when they’re looking at software is they get really excited about the look and feel, which is really important, but they forget about the underlying foundation, so they really have to get the right sort of support to make sure they’re not buying something that’s yesterday’s technology,” McKee said.
Jason Roth, vice president of applications at CGS, a New York-based software company whose BlueCherry PLM solution is used by the likes of Tommy Bahama, Aerosoles and Delta Apparel, added, “Companies should be looking at it from how it fits within their product category versus how it fits. These systems come out of the box with a million fields to key in. How can you customize it to people’s jobs?”
“This is not like buying Microsoft Office or Word or Excel. It is a system. It is a backbone of the enterprise and with any backbone they must have routines in place to revisit the implementation and revisit the tool on a scheduled basis to ensure formalization,” stressed Charles Benoualid, vice president of research and development for Visual 2000.
Brewster echoed the sentiment. “Every PLM solution provider touts functionality and features; however the intangibles can be just as, if not even more, important. Successful PLM implementation requires a partner who can ensure adoption across all users and the supply chain, during and after the implementation,” he said.
Velazquez also underscored the importance of outlining expectations—even if they end up being outlandish, it’s paramount to put them down on paper. “What do they think they might be getting out of it? Maybe that will direct where some of the ROI is coming from. And how much do they really know about what goes on in their day to day business, because a lot of the factors outside of the normal ROI are the processes that are most in trouble,” he said, adding, “Another factor to consider is their company’s cultural capacity to change because that may affect how we approach PLM and its rollout.”
That’s why a top-down implementation process is necessary to ensure everybody is on board so PLM becomes part of the fabric of the company. “You will get pushback from desk employees, therefore you need to be ready for it and have your responses ready because you will need to support each other to move forward,” Velazquez warned. Benoualid agreed: “There needs to be a push from management level down. It’s a company initiative. If one person starts working outside of the PLM, the whole thing will fall by the wayside.”
With that being said, once PLM is in place, the potential wins far outweigh any initial pushback.
“PLM offers an incredible amount of opportunity to really reduce the effort that it takes to get a line to market,” Velazquez concluded. “We believe, and our clients believe, that having designers work on product that is not only right for the customer but right financially for the company is the way to go.”