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The Present State of Supply Chains and What You’ll be Facing in the Future

Sourcing and supply chains are a little bit of a mess right now, and those not suffering as a result of that have figured out how to bend with the changes of the market.

The thing is, as Robert Riccoboni, senior vice president of supply chain for Kenneth Cole Productions, explained at the American Apparel & Footwear Association’s Supply Chain Innovation sourcing conference in New York City Wednesday, business overall isn’t really as bad as everyone thinks, it’s just not happening the same way it was years ago.

(Read more from the AAFA Sourcing Conference: Change is Here for Retail, So What’s Next?)

A new way for manufacturing

Companies like Stitch Fix seem to have figured that out. The online subscription and personal shopping service that ships personalized product picks to customers, started its sourcing arm roughly a year ago, and has since tapped into the well of data it’s amassed to learn how to produce exactly what its customer wants—all designed using artificial intelligence.

The company wanted to create a test run for some of its self sourced and produced, and so-called “hybrid designs,” so it took four styles and put them on the site to see how they’d do.

“Within hours of designing the test and thinking through the products we wanted to test, our analytics team created a dashboard and we were able to see in real time how that test was selling and predict how it would sell based on algorithms,” Stitch Fix director of vendor relations Marcus Chung said. “We could see two were going to be the winners. We started with four as a test, then ordered the two winners in a big way.”

What’s worked for them, as Chung explained, is getting rid of the egos that have historically been present among design teams, and making decisions quickly—sometimes even without samples—to get things moving and as close to right early on. What has also worked is really understanding suppliers’ capabilities.

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“When we get that signal from the client that she wants more white denim, the question becomes who can work with us,” Chung explained. “It’s how do you really get to the truth around what they can do and what they’ll be able to deliver.”

A new way for design

For Riccoboni and Kenneth Cole, it has been about educating design teams. Now designers at the company sit in sales meetings to understand what sold and what didn’t, and to start learning what the customer really wants.

It’s a bit of a sea change for design teams, really.

“Years ago you couldn’t go to the designer and say ‘No we’re not going to run that color,’” Gary Baracco, director of global product marketing for Amber Road, said. The reaction from the designer in that scenario would have been ‘No but I’m the designer’ he explained. “Now we have companies that are running without designers.”

But whether AI or humans are designing your product, the efficiency and speed demanded today requires letting go of some things.

Not every item is created equal, Riccoboni explained. Some will be core, some fashion, some basic, and they should not all be designed at the same time. However, they should all be considered at the same time.

“Figure out how to build those fabrics [for each item type] out through your line so you can meet those minimums,” Riccoboni said. “And don’t use five blues, pick one. Bring it back a few notches and say ‘what makes sense here and what’s going to work?’”

A new way forward

In short, sourcing for an apparel line today means letting go of old habits, empowering quick and efficient decision making and looking at ways to produce more of what the customer wants, rather than producing what the company wants and begging the customer to buy it.

To do that will take some newfangled thinking.

“We think it’s really about being responsive and delaying decision making and preserving optionality,” Chung said.

Brands and retailers should be thinking about how long they can wait before making a decision to add or remove design details and things of that nature.

“It’s that flexibility that makes it so important to be able to deal with your suppliers to work on it,” Chung said. “For us it’s about retaining our options for as long as possible and making those decisions as late as possible.”

Everything has evolved in the modern supply chain and retailers hoping to survive will want to make much better friends out of their suppliers.

“This is an area where you’re relying on your supplier,” Baracco said.