In building a lifestyle apparel brand catered primarily to Gen Z, PacSun knows it must do more than simply keep abreast of modern, constantly changing fashion trends. The specialty retailer knows it requires an agile supplier base to cut product time to market.
The California-based brand has evolved from a China-centric sourcing model five years ago to a more diversified supply chain, now seeing increased penetration in low-cost markets like Bangladesh and Pakistan, as well as advances in nearshoring in Mexico and Guatemala to improve speed to market.
During Sourcing Journal’s Sept. 28 webinar, “Connected Sourcing: PacSun Delivers Visibility Across Partners & Processes,” Jon Brewer, senior vice president of operations, PacSun, and Chirag Patel, president, Bamboo Rose, shed light on the retailer’s supply chain evolution in recent years, and how Bamboo Rose can help further fortify the industry’s “next-gen” sourcing capabilities.
“It’s inherent in the Gen Z business that you need to be nimble, you need to provide fresh trends quickly, and your marketplace and your supplier base needs to be able to turn on a dime and be able to manage that,” said Brewer.
PacSun can turn product from nearshoring countries in 30 days, and even faster if it is not a new style, “which is certainly much faster for us,” Brewer said. Some of PacSun’s Asia-based vendors have even ventured into Central America as well, which has helped the company’s growth in the region as it scales up its nearshoring capabilities.
Brewer said that PacSun is “just scratching the surface” with nearshoring, with expectations for a further buildout in 2023.
Patel noted these strategic decisions are becoming more prevalent among brands Bamboo Rose has worked with, particularly as production in factories halted during the Covid-19 pandemic.
“We’re seeing this move to surgically take categories into other sources where there is competency and infrastructure, and move into this near source/far source balance,” Patel said.
Three stages of supply chain digitization
But next-gen sourcing isn’t just about diversification. This is where the technology side comes in. PacSun moved from a primarily email- or Excel-based sourcing model to one where technical design and sourcing can be managed all in the Bamboo Rose platform, enabling disparate suppliers to gain greater visibility into the brand’s supply chain.
Patel described three stages that PacSun and other Bamboo Rose clients undergo when they shift to a more digitized supply chain.
The first “connect” stage links all internal functions with external partners to drive operational improvements and develop a community among the stakeholders. The more mature “synchronization” stage comes when all parties further align and find a rhythm to improve their processes and address more challenges proactively. The final “optimization” stage usually involves the retailer taking a strategic supply chain leap they were previously unable to establish.
“Some clients have opened up global offices, or moved into international markets,” Patel said. “We have a client that went from four seasons a year to about 16 major and micro seasons a year just because of reaching the state of digital optimization.”
Patel stressed that positive changes come when brands and retailers follow the journey in these three stages: “Don’t try to optimize first. Connect, synchronize, then optimize. The first step of just connecting is going to change a lot of organizations and drive a lot of activities to get in balance.”
Moving ahead with a truly next-gen sourcing model also means letting go of the past and eliminating not just legacy technologies, but mentalities as well.
“[You cannot have] this mindset of chasing the cheapest needle, getting the best margin, treating your vendors as vendors and not partners,” Patel said. “Start with your vendor community. Have them be part of your goals and objectives. Use this digital platform to gather data and make analyst-level decisions versus execution and administrative decisions. We’re seeing more sourcing users evolve in their roles to become analysts and use more science and data to drive their decisions.”
What’s next for PacSun
With more data coming in, Brewer said PacSun is also working with Bamboo Rose on developing more sophisticated reporting capabilities, and further integrating the company’s PLM features with its existing ERP system.
At PacSun, Brewer hopes to better integrate data from its different channels within Bamboo Rose, as the retailer not only offers its own private label products, but also sells product from licensed brands and national brands alike.
“If you’re buying from an Adidas, or you’re buying from a Champion and trying to get their supply chain information, that is something that we’re going to have to tackle in the future,” Brewer said. “We rely on them to do the same thing that we’re doing internally because we’re a national brand, but yes, we would love to get more transparency throughout the supply chain.”
Watch the webinar, “Connected Sourcing: PacSun Delivers Visibility Across Partners & Processes,” to learn about:
- PacSun’s journey to building a transparent and collaborative sourcing organization
- How brands can leverage digital sourcing on the Bamboo Rose platform to accelerate product time to market
- Balancing multiple channels, including proprietary products, brand collaborations and third-party products
- Diversifying into lower-cost markets and building a more agile sourcing operation
- How deeper supplier relationships can improve raw materials management