Today’s fashion business demands a degree of collaboration and global business skills that were once unknown in any industry. And with the speed and complexity of today’s global fashion industry, companies have no choice but to improve the way they handle sourcing, design, merchandising, compliance issues, and operations at every phase of the business.
Product lifecycle management (PLM) solutions are rapidly becoming essential tools for balancing the conflict between customer tastes and efficient, responsive operations. Advanced PLM solutions can be a critically important resource in any fashion company’s approach to emerging issues like ethical sourcing, sustainability, and corporate social responsibility.
Leading fashion companies generate a special kind of momentum, a phenomenon where recent success fuels current success, which in turn sparks future success. A company’s ability to rapidly turn today’s hit product into tomorrow’s durable brand is no accident–it’s the result of a specific set of practices that companies can identify and repeat to achieve a lasting competitive advantage.
But there are many obstacles to generating momentum, including corporate responsibility issues that are core to the brand image of many fashion companies. The ethical sourcing movement, concerns about conflict minerals, laws about supply chain transparency and normal issues of corporate governance, all weigh against the sense of forward motion that fashion companies need to stay competitive. They also create both forward-looking and retrospective risks that no fashion company can afford to ignore.
For the most part, a majority of fashion brands make these obstacles central to their brand identity. However, the sheer capacity of details required to ensure that an organization is really fulfilling its goals can be very difficult to manage without a modern PLM system in place.
In some cases, companies must manage these issues prospectively and retrospectively at the same time. One well-known clothing brand, for example, sourced materials from a vendor, which in turn bought materials from a subcontractor in a developing country. The subcontractor was later accused of inhumane practices by an animal rights group. While the company had done its forward-looking due-diligence with respect to the prime vendor, it had to respond to the public relations storm surrounding the subcontractor, and not only re-examining its sourcing, but also assure customers that it had identified and resolved the problem. A PLM system can help to quickly track down information that is needed in real-time.
Even if a company neither operates nor sources in a jurisdiction covered by these laws, many large retailers do. As a result, concern about compliance tends to dwindle. But even without outside pressure, many fashion companies would much prefer to play a leading role in addressing these concerns rather than reacting to them.
Without the comprehensive visibility available from an advanced PLM solution, it’s nearly impossible for fashion firms to anticipate and respond to pressing outside issues. In addition to the brand integrity issues around ethical sourcing, many E.U. nations and U.S. states now have laws and regulations prohibiting the sale of merchandise produced without observing certain standards about animal rights, labor rules, workplace safety, and other issues. Public demand drives constant changes in these laws, which means that fashion companies may need to revisit the issues time and again. If a company stores all relevant data on spreadsheets in multiple silos, every regulatory change creates a new business crisis. An advanced PLM system streamlines the task of ethical sourcing information ready for review.
Another key consideration that companies need to have a pulse on is supply chain accountability. For instance, The California Transparency in Supply Chains Act (SB 657) requires retailers with revenue over $500 million to certify that their suppliers don’t deal in forced labor or human trafficking. Even companies outside California that supply to retailers operating in the state can expect to be asked for compliance certification. Other states are considering similar measures, and a comparable bill has been introduced into the U.S. Congress as well. Again, this is a dynamic regulatory environment requires an equally adaptable PLM process.
Finally, the Dodd—Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203) requires all publicly held companies to report the use of conflict minerals, like tin, gold, tungsten or tantalum, which may have been sold by armed groups in Africa’s war-torn Congo region.
According to the American Apparel and Footwear Association (AAFA), the fashion industry typically uses these materials in components like zippers, buttons, belt buckles, rivets, eyes and metallic yarns. Although private companies are not covered by the law, downstream customers are likely to require appropriate reports from their suppliers, so many fashion companies will need to provide the information. Just as with ethical sourcing, an advanced PLM solution can streamline the process of gathering needed information to ensure compliance and assembling relevant reports.
There’s nearly no way to compete at the top levels of today’s fashion business without a well-developed and fully supported PLM process. In this increasingly competitive marketplace, every fashion company needs to strive for better responsiveness to consumer trends, more efficient design and production, smarter sourcing, and improved capabilities for monitoring compliance and sustainability requirements. To achieve those goals, every firm needs to bring as many different contributors as possible onto a common platform for sharing information and collaborating effectively. As product cycles get shorter and supply chains get longer integrated product management systems will be key to achieving lasting success.
Bob McKee has more than 40 years of experience working in and with apparel, footwear, home textiles and fashion accessories companies. He has hands-on experience sourcing apparel products around the globe and was one of the first US apparel executives to start sourcing in China in the early 80s. His knowledge and skills span retail, sourcing, manufacturing, and product development within the fashion industry.