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ERP Guide: What Fashion Businesses Need to Know to Grow

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A successful fashion business is a wonderful thing—provided it’s in the right position to scale.

It’s certainly a “good problem to have.” But companies that are ready to make the leap out from small potatoes are confronted with all manner of issues that need addressing: inventory management, retail relationships, speed to market. While some of these challenges aren’t new, they take on exponentially more effort—and significance—as businesses mature.

Although there’s no perfect one-size-fits-all solution for any business, choosing the right ERP system is particularly important for fashion businesses that are trying to scale.

Why is choosing the right ERP so important?

In the apparel industry, having the best-suited ERP provides the greatest amount of visibility into your operations. It’s the only way to recognize your true inventory levels and fully manage your operations.

“Companies that don’t have visibility don’t have control, leading to issues that cause their customers headaches,” Shahrooz Kohan, CEO of AIMS360, said. “Some examples are late shipments because of no visibility of inventory and production, incorrect shipments because of manual data entry mistakes, and missing orders.”

How will it help us grow?

Being lean and mean is often what helps a business get off the ground, and many companies begin with their founders quite literally doing everything themselves. At some point, however, a firm that wants to scale requires a level of efficiency that enables them to have a seat at the same table as their competition.

It’s a common problem in the fashion world. “Execs at start-ups think they can do things manually and then wonder why their company is not growing,” noted Kohan. “What they don’t realize is the efficiencies created by a modern cloud ERP are the reasons that start-ups are able to be quick, nimble and cost-efficient against large corporations.”

Where should we start?

First things first: Choosing a modern system that’s adaptable to shifting industry trends as they crop up is the most important thing. Manual processes simply aren’t scalable, forcing costs upward as you take on more customers.

In order to know what’s right for your company, all businesses should chart out their workflow to see how closely a potential ERP will align. When AIMS360 is working with a potential customer, one of the first things it does is analyze its business model—even before it shows a demo. It’s not a step that can be skipped, and it’s better to get it right the first time.

“There’s a time investment to go from having manual systems to a modern cloud ERP that sets the company up for scale and growth. This time investment becomes more difficult once the business is larger,” Kohan explained. “The earlier that is done, the better chance there is for growth and survival.

How can an industry-specific ERP be more valuable than a universal system?

Given that inventory within the fashion industry often contains a vast range of colors and sizes, it can be particularly advantageous to choose an ERP that’s industry-specific. Data entry in generic ERP systems can be slower, said Kohan, and many reports can’t be sorted by colors or sizes.

Furthermore, the fashion industry differs in production, product storage, fulfillment, working with retailers and even sales rep commissions. Having the right ERP can help account for all of these variances, eliminating the need to supplement your systems with additional software. Businesses that intend to work with large apparel retailers also need to ensure their ERP system will be interoperable.

“Many people think if they pick an ERP that is widely advertised and part of a large public company, they can’t go wrong,” said Kohan. “What they don’t understand is that these systems are not apparel-specific and their return on investment calculations work for only very large corporations in the hundreds of millions.”

Click to learn more about AIMS360 and its cloud-based, fully integrated order and production processing system for fashion manufacturers, wholesalers, importers and distributors.

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