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Digital Supply Chain Platforms: Separating the Winners from the Losers

Today’s fashion and retail supply chains are extraordinarily complex. In the ultra-competitive world of fashion retail, companies must manage all the details of product design, sourcing, compliance, product testing and supply chain execution for thousands of SKUs simultaneously. They must also react to constantly changing demand signals, fashion trends, weather patterns, sales data, production delays and many other variables—and they must do it faster and faster.

Most retailers and brands, however, lack the necessary systems and processes to effectively manage it all. Manual systems, like email, spreadsheets and siloed data, won’t work in a world where speed and quick reaction times separate the winners from the losers. The supply chain ecosystem must move faster than it has in the past in order to react to consumer demand and provide the information companies need for rapid, accurate decision-making.

That’s why there is so much emphasis today on a cloud-based, end-to-end digital platform. The “platformization” of the fashion and retail supply chain—creating a platform that brings together all the systems, applications, processes and information in the supply chain—is essential to transforming responsiveness and speed.

Uniting disparate data and applications

A digital supply chain platform breaks down organizational silos and enables faster decision-making by bringing together planning, design, sourcing, production, logistics and replenishment into a single, connected enterprise. It provides a single platform that spans product and material creation, factory capabilities and capacity, material positioning, vendor management and onboarding, production WIP and quality control and finished good distribution, among other things.

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Data from PLM, supply chain management, ERP, quality and vendor management applications is available for all internal departments, as well as vendors, suppliers, factories and third parties, through the digitally connected platform—and all of that information is shown in real-time. This saves brands and retailers hours of consolidating data for analysis. Consider the impact of a connected digital platform in several key areas of the modern supply chain: vendor compliance and quality management.

Effective vendor compliance

Vendor compliance is a key area that highlights the need for a connected digital platform.

The process is complex and multifaceted, as it involves managing multiple product lines, SKUs and vendors. It’s impossible to effectively manage vendors, especially amid the constant changes of today’s trade wars, without incorporating vendor compliance into a single enterprise platform that includes workflow calendars, collaboration and alerting. With a digital supply chain, vendor compliance is no longer a standalone part of your workflow, and the digital supply chain ensures a seamless, real-time flow of information.

This greatly streamlines vendor onboarding and ongoing management, since all necessary documentation—standards of vendor engagement, compliance documents, certifications, audit results—reside in a central location that’s instantly accessible. Retailers receive alerts when new audits and certifications are set to expire. Geolocation features add an extra layer of visibility, mapping factory sites by physical location to improve the efficiency of onsite inspections.

By incorporating vendor management into the overall supply chain workflow, companies can also lay the foundation for other critical applications, like social responsibility, ethical sourcing, sustainability and traceability.

Getting a handle on quality management

Quality management is another area of the supply chain that’s best managed through a digital platform. It’s a key focus for brands and retailers, since quality is so critical to brand reputation; almost 40 percent of millennial consumers say quality is the most important factor that attracts them to products, according to Deloitte.

A digital platform can help retailers and brands deliver high-quality products and make quality management more efficient, transparent and accurate. By streamlining the process through an enterprise platform, quality control supervisors can schedule audits based upon factory clusters and delivery schedules, then report on audit results directly into an enterprise platform instead of using slow, ineffective manual ways. Bringing quality control into an enterprise platform will also help companies identify problems sooner, reducing the risk of cancellations, chargebacks and returns while protecting a brand’s reputation.

Separating the winners from the losers

These are many disciplines that should be part of a robust digital platform. The good news for retailers is that a digital supply chain platform offers the flexibility to build upon the platform as needed, adding additional applications and functions over time. This allows brands and retailers to continuously adapt in line with the fashion industry’s rapid changes.

The key is to get started now. According to McKinsey and company, “fashion has become a winners-take-all business, where size or heritage matters little. Over the past decade, the vast majority of fashion companies have battled to barely break even, while the top 20 percent have delivered all of the industry’s economic profit.”

A digital supply chain platform is one of the foundational elements in making sure brands and retailers are part of that top 20 percent. By connecting disparate enterprises and enabling companies to react quickly and effectively, they can help drive continued growth, profitability and relevance to consumers.

Mark Burstein is president of NGC Software, where he is responsible for product strategy and also leads the company’s sales, marketing and research and development operations. He has extensive industry experience in global sourcing and supply chain management and actively works with retailers and fashion brands on enterprise initiatives including lead time optimization, operational efficiency and digital supply chain strategies.