Ralph Lauren Corp.’s big initiative—its Next Great Chapter plan—has a key cornerstone that makes leading with digital remains a top priority.
Here, Halide Alagöz, executive vice president, chief supply chain and sustainability officer, discusses how Ralph Lauren Corp.’s transformation of its sourcing and supply chains is an example of the company’s mandate.
Sourcing Journal: How would you describe the sourcing and supply chain network when you joined the company in June 2016 and what were the top areas that you thought could be improved to further the company’s then Go-Forward Strategy?
Halide Alagöz: There has been significant transformation and disruption across sourcing and manufacturing in our industry. Given the size and complexity of Ralph Lauren’s supply chain, our focus has been on finding solutions to continue to evolve and accelerate these shifts at scale to become a more agile, resilient and sustainable business.
As a part of this, we first redesigned our sourcing network to shift from a geographically concentrated, brand-specific model to a globally integrated category sourcing model. We’re investing in innovations to drive more sustainable practices in our supply chain, collaborating with non-traditional partners to bring new solutions to our company and our industry. We’re also implementing operational changes to make our supply chain more agile and efficient through digitization. And we are deepening and diversifying our relationships with key strategic suppliers to ensure we have a balanced network of partners who share our values and standards to help us achieve these transformations, expand our global footprint and tap into new markets.
SJ: The company has been able to shorten the timeframe for some items from over a year to six-to-nine months and the new plan under CEO Patrice Louvet is to shorten production time even further. What considerations do you think about in terms of how to tighten up lead times?
H.A.: We approach development for all our products as a demand-driven model with four enablers. Firstly, we are intentional about the products for which we shorten lead times to ensure we maintain integrity and quality. Secondly, we examine how and where we source materials. Thirdly, we empower our key strategic suppliers and make sure we work with partners who are willing to continually evolve and optimize their processes. Finally, our last enabler is that we deliver end-to-end connectivity, which means that we approach product development with the end product in mind so that all the steps—from design, planning and buying to production and delivery—are connected. This approach ultimately enables us to eliminate waste and inefficiency out of the planning and manufacturing process and bring value to the consumer experience.
As a result of this, some of our products, intentionally so, are developed and produced in a matter of days and hours, instead of weeks and months. It would be remiss to not point out that embracing digitization across our supply chain and shifting production closer to demand have been key to driving the efficiency, accuracy and speed required to scale this model
SJ: What role does digitization and 3D Product assets have in sourcing and the supply chain? And what is Digital Product ID?
H.A.: Indispensable. Digitization and the adoption of new technologies has not only enabled us to deliver a wide-reaching yet more targeted customer offering but also significantly improved collaboration internally and externally across our business—from our manufacturing partners through to our consumers.
We are now using 3D design technology for select product categories. This is a transformative evolution that integrates and consolidates multiple steps at the beginning of the traditional design journey by creating a digital file with a 3D image and all product design information. The ability to provide the product design in this way with our manufacturing partners has helped us operate much faster and more sustainably by reducing the amount of time, materials and logistics that are usually generated by multiple rounds of physical product sampling.
In 2019, we started adding Digital Product Identities (Digital Product ID) to tens of millions of Ralph Lauren products as a way to power product authentication, further digitize our supply chain operations and deliver an enhanced consumer experience. By scanning the Digital Product ID on the product label with a smartphone, consumers can confirm whether their purchase is authentically Ralph Lauren, learn about the product detail and receive styling tips and recommendations. The use of Digital Product IDs has also helped us gain unprecedented, real-time visibility to track product from the point of manufacture and having this depth of insights has helped drive efficiency around orders and inventory management.
This mass-scale product digitization is a first for the retail industry. We’ve hosted the program on an agile platform so that as it scales, we can continually explore new features. This technology will enable a number of capabilities for our products, including track and traceability, a circular lifecycle through reuse, resale and recycling and a more personalized consumer experience.
SJ: The company has product lines segmented into development tracks, and a separate Fast Track production platform. Can you walk us through the different programs? And is Fast Track the platform where you test certain styles before making larger commitments on production?
H.A.: We took a look at all our product lines and analyzed what types of decision models were necessary for each. We then applied a segmented approach that has helped us find new opportunities to optimize our processes and increase speed-to-market without compromising on quality.
Last year, we created fast-track production models to design, produce and deliver products in just days/weeks versus months. While we aren’t looking to move our entire supply chain to such shortened lead times, we are using this model for projects where we want the flexibility to react very quickly and better position ourselves for various customization opportunities that arise. For example, around the holidays last year, we designed, produced and delivered an exclusive fleece sweater to a key wholesale customer in just 16 days, right in time for Black Friday.
SJ: What are the platform innovations that you are using to scale on-demand manufacturing?
H.A.: We are continually exploring new platforms and technologies to add to our pipeline of solutions for on-demand manufacturing. A few years ago, we launched a digital-first, on-demand customization experience, anchored by the Create Your Own Custom Crewneck Sweater, that gives consumers the opportunity to co-create a one-of-a-kind, personalized piece, knit to order and shipped within two weeks. Most recently, we expanded this Create Your Own (CYO) program to outerwear with the custom packable jacket.
In a way, this CYO experience represents the next phase of on-demand manufacturing as it nearly automates all the steps between concept and production by sending actionable product data directly to the factory at the point of design.
This solution presents us with a lot of immediate and future benefits—from reducing product inventory, material waste and eliminating the need for markdowns to allowing for greater agility and rapid fulfillment of high-quality products that meet our consumers’ desires and tastes.
SJ: In terms of diversification of the supply base, what are the key considerations in thinking about agility and resilience? What about supply-demand matching with each region or market? And how has that changed, if indeed it has, post the Covid-19 pandemic?
H.A.: Our ongoing efforts to reshape how we work and unlock agility and resilience across our supply chain put us in a strong position to control our inventory from the start of the pandemic and manage through these times of uncertainty. Diversifying our global supply base has led us to consolidate and strengthen our relationships with strategic partners as well as facilitate nearshoring opportunities so we have the flexibility to shift supply and production closer to the point of demand. This is a growth opportunity for us as it means creating less, faster, more sustainably and more responsively.
SJ: In thinking about the sourcing and supply chain in a post-Covid world, what changes or considerations come to mind? Is reshoring a possibility? What about the logistics in terms of where raw materials or inputs are located?
H.A.: As uncertainty persists, the ability to remain agile and react quickly through on-demand models has become a critical capability.
We recently refreshed our Global Sourcing Strategy to further diversify our Global Sourcing Network and facilitate nearshoring opportunities for our regions and channels. As part of this strategy, we also aim to source more locally, including components, raw materials and fabrics. This approach combined with our digitization efforts, not only allows us to gain speed to market, but also source and manufacture more sustainably while retaining product and brand integrity
SJ: Can you talk about some of the partnerships you have with your suppliers? How do you work with them on strategy and how do you keep track of those partnerships to make sure they’re meeting the company’s strategic goals?
H.A.: Having the right network of responsible, strategic partners who share our values, our ambitions and with whom we can collaborate to solve long-standing sustainability challenges is one of the most critical components of our supply chain. And last year, we implemented a new supplier engagement strategy to help us drive transparency, efficiency and accountability around our partnerships. We regularly evaluate these relationships based on the performance and potential of our partners, which we define in terms of their business execution, commitment to citizenship and sustainability as well as product integrity
SJ: Sustainability and sourcing transparency are becoming more important considerations for consumers in choosing what to buy, as well as for brands in keeping brand loyalty. What are some of the company’s key goals at the supplier level concerning the environment and the community where each operation is located?
H.A.: Increasing transparency across our supply chain is a priority for us and our Digital Product ID platform is one of the solutions we are leveraging to improve tracking and traceability.
As for our approach to sustainability and sourcing, we’ve defined our commitments in Design the Change, our strategy for citizenship and sustainability at Ralph Lauren.
Through our own efforts, and in collaboration with partners and experts, we are taking steps to mitigate our environmental footprint. Our vision for the future would be to produce only what is needed and eliminate overproduction altogether through shorter lead times and agile production models powered by digital. Our teams are mapping out and reducing the impacts of our energy, emissions, water and waste across our operations and supply chain. We’ve also joined other leading peers and companies as signatories to the We Are Still In declaration and the UN Fashion Industry Charter for Climate Action, pledging to limit our emissions in line with the Paris Agreement goals. We are also members of the G7 Fashion Pact, a group of fashion leaders working to stop global warming, restore biodiversity and protect the oceans.
As it relates to people, we aim to enrich the quality of work and life for all workers in our supply chain. One of the critical reasons why we maintain long-standing relationships with our strategic suppliers is so we can partner more closely and transparently for the benefit of the people who make our garments. This work is one we continue to improve upon. While all our efforts aim to ensure workers are treated and compensated fairly, more specifically, one of our goals is to make empowerment and life-skills programs available to 250,000 workers across our supply chain by 2030. Furthermore, we have committed to increasing women in factory leadership by 25 percent by 2025 as supervisor positions are mainly held by men in most factories despite women making up, on average, half of the apparel supply chain workforce.
SJ: Looking ahead, and thinking in retrospect on the disruptions this year, what keeps you up at night as you plan for 2021?
H.A.: I mentioned this earlier, but uncertainty and volatility in the supply-demand space are here to stay. Therefore, making sure we have the right balance of agility and resilience to face future unexpected global disruptions is so important. And, as part of this challenge, we’re also accountable for ensuring that we, as a company, along with our partners and suppliers, are acting responsibly during this unprecedented environment.
As an industry, we’re all trying to solve the same challenges, from improving transparency and traceability to reducing our climate impact across global supply chains. If we want change to happen, we need to partner together to find and align on these solutions.