Speed and quality control are equally crucial for competing in today’s retail environment, since poorly timed product deliveries or production mistakes can create missed opportunities and pile on costs.
One of the factors hindering error-free execution in fashion is importers’ overreliance on emails, phone calls and spreadsheets to oversee a complex process that takes four months and involves up to 30 people. With all of these moving parts, trying to manage it manually can lead to miscommunications and oversights.
In a conversation with Sourcing Journal president Edward Hertzman, Mercado Labs founder and CEO Rob Garrison and Mercado board member John Urban explained how Mercado is helping importers overcome this collaboration challenge. The import management system creates a centralized, cloud-based hub so that all parties stay on the same page throughout the process. This unlocks improved decision-making capabilities and enables parties to better respond to demand. “It’s a whole new world,” said Urban. “It’s truly supply chain 2.0 today.”
Even though digitization is important, according to Garrison, solving apparel’s current challenges will come down to more than just technology. “If I’ve got a bad process, and I layer technology on top of it, I just make bad things happen faster,” he said.
To build a more foolproof supply chain, Garrison encourages the fashion industry to take a page out of McDonald’s book, since the fast food giant’s operations have a backbone of process fleshed out with technology. Orders are input into digital registers to avoid mistakes, and this information is then fed to cooks digitally, preventing production errors. Compared to McDonald’s well-oiled machine, if the fashion supply chain was a fast food restaurant, Garrison says workers would be taking orders by hand and texting about any updates. Food would also be sealed in bags until diners left the premises, representing the lack of visibility fashion firms often have as goods travel overseas.
If there are any mistakes in a restaurant order, the problem can be solved quickly. But for fashion, it could take months to rectify an issue, at which point product would be late reaching stores. The financial stakes are also much higher, since importers could have made a five-figure or greater investment, compared to spending $5 on a burger.
From a quality perspective, McDonald’s also excels at standardizing its products. For the most part, a burger in one international destination will taste the same as one across the world. Getting to this level of quality control could help fashion avoid costly returns.
Mercado gives importers a constant pulse on their orders, so there is less uncertainty about what they’re going to get when shipments arrive. Having this connectivity also allows firms to speed up their lead times.
Production is only part of the first 120 days of a purchase order. Typically, a supplier needs to wait until they have an order in hand to purchase raw materials, delaying production. Mercado enables companies to give their suppliers forecasts so they can pre-stock raw material to speed up the process once the order is placed. “A lot of people just bake in 90 days or 120 days without giving some real thought to, could we do it in 60, 40, 30, and the technology lets you make those great decisions to speed things up,” Garrison explained.
In an example of speed, a few of Mercado’s clients are doing direct-to-consumer sales from Asia by having suppliers manufacture advance stock. Once consumers place their orders, it ships directly from the factory and can reach them in about five days. “I see the whole process changing, and it has to; it can’t continue to operate like it’s 1960,” Garrison said.
Click the image above to watch the video to hear how Mercado Labs is helping its customers improve on quality and speed.