THE FASHION
SUPPLY CHAIN

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SUPPLY CHAIN MANAGEMENT


The science of supply chain management has shown that logistics and the warehouse are a key element in the chain.

The whole supply chain from product development to retail allocation has to operate seamlessly. It also has to operate to a budget cost.

 

THE SUPPLY CHAIN

The fashion supply chain is a very complicated animal 

Up until the last decade, it was mostly in the form of a straight line flow. Today's supply chain is more wiggly and convoluted. Global retailing means that it is no longer cost effective to operate the straight line.

 

Sending merchandise around the world in order to be retailed back where the garments were manufactured is not common sense, but to resolve these issues requires careful analysis of

 

• What is going on

• How it is going on

• Why it is going on

 

With more than 25 years of management consulting experience and an enviable stable of blue chip retail and brand clients, Malcolm is able to relate immediately to management concerns on profitablity & competitiveness, business strategy and supply chain management


THE SUPPLY CHAIN, PRODUCER TO CONSUMER

 

 

 

Speak to Malcolm about profitability and competitiveness of your company, your latest business direction and strategy review or any supply chain management issues you may encounter




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SUPPLY CHAIN MANAGEMENT

explained

Its Evolution

Supply chain management is not a new retail science. It has been around ever since accountants first started reporting on the balance sheet, and in particular for retailers, the stock in the business and the payments owed to suppliers. But paying attention to the balance sheet was given extra importance in the 1970s because of the extremely high cost of money (interest rates) at that time.

 

In the 1980's the emphasis switched to suppliers, as fashion retailers began to desert the UK as a manufacturing base. Low cost Far East suppliers generally operated on letters of credit, so that merchandise was paid for before it even left port. In the 1990's the high cost of rents and retail refurbishments concentrated attention further upon the financial nessessity of keeping stocks tight and avoiding early receipt of seasonal merchandise.

 

As the elements involved in supply chain management increased, so its title and the buzzwords associated with it changed. The emergence of the concept of managing a process can be dated roughly as

 

• 1975 buying and stock control
• 1980 merchandise control
• 1985 quick response
• 1990 efficient consumer response
• 1995 supply chain management

 

These developments also spawned a number of other words and phrases which are now part of the lexicon of supply chain management and which are discussed in the subsequent sections. They include

 

• performance control
• supplier compliance
• supply chain visibility
• collaborative management
• cost and lead time trade offs

 

Supply chain management is now regarded as an integrated control system and most larger retailers will have a Supply Chain Director, emphasising the importance of the subject to retail competitiveness and profitability.

 

Performance, Compliance & Visibility

Time was, when a buyer sent an order to a supplier together with a loose delivery requirement (from 10th January to 31st March) and that was that. The product was delivered in the supplier’s normal manner, and all pre-presentation work was done by the retailer at his premises.

 

Today, the supplier is responsible for a wide range of tasks ancillary to just the manufacture of the product such as

 

• Packaging
• Labelling
• Ticketing
• Barcoding

 

In addition, the supplier has to adhere to far more specific instructions on phasing of deliveries, and methods of assorting deliveries (in size scale, solid colours etc)

 

This has lead to the practice of having a supplier manual, and reporting against it on the subjects of

 

• Compliance :: has the supplier followed the instructions?
• Performance :: how well has the supplier matched the
   instructions?
• Visibility :: can the retailer see what the supplier is doing?

 

Some larger retailers will bring together their suppliers for a Suppliers' Conference at which measurements of performance are discussed and awards (and maybe punishments) handed out. But even smaller retailers are now aware of the importance to their own performance of monitoring that of their suppliers

Procedures & Systems

In order to achieve compliance and monitor performance (see Supply Chain Management :: Performance, Compliance & Visibility), procedures and systems must be in place within the retailer. These usually (though not necessarily) take the form of computerised recording of supply chain data.

 

The supply side of the computer system links to the demand side ( sales to consumers) to generate reports from which adjustments to supply can be made. In some cases this routine is automated, with the computer itself adjusting future supply on the basis of sales and stock.

 

But beware the automated supply chain on seasonal merchandise. One supermarket put non-food supply on a food one-for-one replenishment system. The outcome was that high sales of T-shirts in July generated orders for high volumes of T-shirts for delivery in October!

 

On the supply chain management side, the procedures and systems should be able to monitor against plan by the relevant time period

 

• Purchase orders placed
• Purchase orders in manufacture against target supplier
   delivery dates
• Merchandise dispatched by the supplier
• Merchandise received at the retailer's warehouse
• Stock at the warehouse
• Merchandise allocated to stores
• Stock at stores

 

Most of the functionality for doing this is available in large and also today in smaller retail computer systems. The ability to use it intelligently, and to make decisions that will enhance the retailer's performance is, however, dependant on the skills of the retail buyers and merchandisers. There are quite enough horror stories in retail about both stock-outs and excess stock to suggest that using the computer tools well is by no means a foregone conclusion

 

Collaborative Management

A retailer can have extensive and detailed supplier requirements set out in a large manual on performance, compliance and visibility. The same retailer can have impeccably structured procedures, and the most sophisticated computer systems. But without a culture of collaboration between the retailer and its suppliers, supply chain management will founder.

 

Collaboration is not a one way street. It is definitely not a matter of the retailer shifting the responsibility back down the supply chain. Collaborative management is about

 

• The retailer genuinely regarding the supplier as a partner
• The supplier being passionately devoted to the sell-out success of his merchandise, as well as the sell-in

 

A phrase I coined and used years ago when on a quick response merchandise control trip to South Africa was that supply chain was about collaboration not confrontation. In a confrontational situation, the buyer's goal is to beat-up the supplier.

 

In a collaboration scenario, the buyer still wants to get the best deal possible from the supplier. But the deal is not just about price. The deal is more complex. It is about trade offs between

 

• Price
• Lead time
• Risk
• Quality
• Reliability

 

Efforts have been made (mostly by consultants) to put complicated scoring systems in place to try to measure the importance of each of these elements. In my experience these do not work, because they are mechanical.  In any review of supply chain collaboration, the critical factor will be the intuitive skills of the buyer, and the culture that says that there can be a win-win situation between the retailer and the supplier.




TEACHING

Malcolm teaches Merchandise Planning at
• London College of Fashion (under-/postgraduate level)
• London College of Fashion (holiday short course level)

Supply Chain Management

 

Malcolm's university teaching approach to supply chain management is to treat it as the integrated control of all aspects of the chain. So it joins together

 

• design
• technical product development
• range planning
• sales forecasting
• range & garment approvals
• fabric buying & procurement
• fabric logistics to the garment manufacturer
• the factory manufacturing cycle
• garment distribution from factory to customer
• warehousing activities such as quality control
• allocation and distribution from warehouse to stores or
   consumers

All elements interconnect. All are important. All can go wrong

London College of Fashion

 

+ Current retail climate

+ Retail industry structure

+ B & M rules / responsibilities

+ The buying cycle / calender

+ Competition analysis

+ Range planning / forecasting

+ Buying and costing

+ Sourcing and supply chain

+ Stock management

+ Retail allocation 

 

Email Malcolm Newbery for tuition




SUPPLY CHAIN PROJECTS

MALCOLM NEWBERY CONSULTING LTD. specialises in conducting process reviews of your Logistics & Warehousing effectiveness

Alexia Fashion Ltd., UK​

Selection of a third-party warehouse company (3PL) to undertake physical international distribution for a growing designer business [2009]​

 

Azadea, Middle East

Improving the understanding of supply chain issues for a leading Middle Eastern retailer of European and American brands [2012]

 

Bangladeshi Government, Pakistan

Business advice to Bangladeshi companies seeking to export into Europe (2014)

 

Cotton Council International, USA

Research into the Corporate Workwear supply chain [2017]

 

Debenhams, UK

Quick Response supplier strategy (2012)

 

Elvi, UK

Analysis of Buying & Merchandising organisation for a supplier of plus size womens’ outerwear (2014)

 

Harrods, UK

Reorganisation of supply, logistics and store replenishment (1990-1992)

 

House of Shanghai, China

Methodology of managing the supply chain of a Chinese fashion web marketer [2008]

 

Jermyn Street Design, UK

Review of systems, procedures and supply chain routines [2000]

 

Liberty PLC, UK

Commercial Director responsible for merchandising and logistics;

IT systems Implemented new integrated computer systems store wide [2001 - 2002]

Merchandise Planning Restructured multi-channel planning system [2001]

Supply Chain Decreased warehoue and distribution costs [2001]

Improved own brand supply planning [2000]

 

Li & Fung, Europe

Advice to the world’s largest sourcing intermediary on how to improve their understanding of the priorities and issues facing their retail customers [2012]

 

Little Mistress, UK

Physical warehousing and stock control management for a young womenswear label selling internationally through wholesale, key retail accounts and concessions [2016]

 

Locum Consulting, UK

Evaluation of requirements for an incubator business unit within a textile museum [2004]

 

Simon Jersey, UK

Supply Chain effectiveness for corporate mail order [2002]

Creating a quick response factory for mail order business [1998]

Sales forecasting and stock control for a mail order catalogue [1997]

 

TM Lewin, UK

Supply Chain Review of warehouse replenishment procedures [2004]

IT Systems Epos and head office systems search for this shirt retailer

Merchandise Planning Principles of systems to plan both new and replenishment styles and fabrics for own label retailing [2003]

 

Walé Adeyemi, UK

Set up of 3rd party warehousing and distribution [2003]

 

Wear Art, Scandinavia

Expansion into the UK market for a branded supplier of art themed casualwear [2015]

 

 


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