There is a very famous adage that has passed on as a legacy right from the classical Roman era, and that is, ‘Clothes maketh the man’. Though fashion and apparel is an indispensable part of the human lifestyle and one of the basic necessities, we can also say that it has gone beyond the scope of being one and has become a yardstick to judge an individual’s personality. Therefore, the fashion industry has become a force to reckon with in the last century in particular. Multiple global brands have blossomed over the years leaving iconic imprints on the fashion domain and making it a billion dollar industry.
However, the influence that this industry wields over public life across the globe received a huge setback owing to the pandemic COVID-19. This industry relies heavily on the supply chain and we also have been witnesses to the fact that the latter suffered massively due to the operational and institutional shutdowns that occurred throughout the world. Inventory got depleted in warehouses with no shipper coming to take it away. Delays in transportation led to the supply chain sphere incurring huge amounts of loss. The fashion vertical of the supply chain was always fraught with a lot of loopholes and the pandemic acted as a catalyst in unearthing all the issues that had been gnawing at the heart of the economic activities. The redundancies that have been exposed, coupled with the setback that the industry had to suffer, called for a remodeling of the operational design and left rooms for innovation thrust open. The way tailors mend old, tattered clothes, it is time for the fashion vertical to learn lessons from the setback and engineer their ways to set the parameters high and get the ball rolling all over again. It must take into cognizance that complacency is a matter of the past. No brand, however iconic it may be, can stay put with their existing business model. All must take into cognizance that demand patterns have changed, unleashing an era of volatility for an unforeseeable time and they all must move ahead in this volatile situation and also face it headlong to succeed.
Trend that Have Set Sailed
It must be mentioned at the very onset that COVID-19 is the biggest trendsetter and game changer in the past century. Everything in this world changed along with the way we perceived things. In this section of the article, we would try to dissect the ongoing situation and boil down to some of the major trends that have been witnessed in the fashion industry over the last 2 years.
Changed Demand Trajectory and Pressure Up & Downstream : COVID-19 hit the world as a major disruption and made some very significant socio-economic changes. There were instances of unfortunate layoffs that led to people becoming unemployed, there were reports that the family income in most of the countries went down. With an economic crisis hitting us very hard, the willingness to spend on things is bound to change. Consequently, people started spending more on the essentials like food and medicines in this battle for making ends meet and splurging on clothes and fashion was sidelined. This was especially problematic for the luxury fashion brands. In order to stay afloat and wade through this muddy water, they had to resort to bringing their prices down. Through providing lucrative discounts, offers and making their ware affordable, they had to resort to popular policies to navigate through the pandemic and sustain themselves. While the downstream of the fashion supply chain got impacted badly, the upstream also got no better treatment. Due to the institutional lockdown that was imposed all over the world, freight forwarding received its fair share of negative effects. Suppliers could not deliver their raw materials on time and due to it, manufacturing and the day-to-day operations came to a point of stagnation. All these disruptive and near disastrous incidents made both the fashion and the supply chain industry contemplate refurbishing their existing models and come up with something new so that resilience could be achieved and that too, very promptly.
Trapped Inventory: While many distribution centers at some parts of the world stayed empty due to blank sailing, in many warehouses, inventory spilled over due to zero movement of goods. Additionally, as we have mentioned, the demand for clothes and apparel also fell down drastically. It is a popular saying in the logistics sector that having excess inventory is a bane and the industry had no other option but to deal with this bane. In order to get themselves freed from the tied up inventory and set the operation going, companies had to resort to the omnichannel logistics, leverage the burgeoning e-commerce platforms and make use of all possible resources. The uncertainty had to be tackled and needs to be tackled for a long time now through all available measures.
When looked at the situation at a hindsight, both the industries alike realized that to cope up with the altered situation and weather the storm that has been raging, digital transformation is the only way out. It is time to rethink the operational processes and taking resort to digital help can render them a greater amount of visibility into the system. Having a seamless and timely flow of information that would pass on from one partner to the other seems to be the greatest surviving kit that one could come up with ingeniously. To stay in silos is not the option anymore. It is the age where all the stakeholders need to collaborate in order to co-exist. The whole gamut of the value chain is embedded with a huge pool of work and to accomplish these tasks, companies always needed efficiency. But today, along with this efficiency, they also need digital assistance as the disruption has taught them the lesson that in this era of unpredictability, anything may go awry at any point of time. Digital transformation can not only ramp up productivity and profitability but also helps in gaining maximum visibility into the entire system, and makes them aware of the events that may succeed or the errors in the system, thereby helping in taking quick prescriptive steps and agile decision-making.
Judicious Inventory Planning: The post-COVID supply chain needs to know how to strike a balance between inventory at hand and the forecasted demand. The unpredictability of the situation coupled with the erratic effects have taught the industry leaders that there has to be a greater need of revisiting the inventory levels. With the consumers spending less on fashion and apparels, companies must not make any erroneous decisions and must adhere to the forecasted demand patterns that are made so that there is no excessive inventory left to be depleted. All partners must come together and collectively decide the future business move in the face of an unprecedented turn of events. Leveraging the data analytics and the transparency that it empowers the businesses with, they must come to conclusive decisions as to how the balance between just-in-time and buffer stock is achieved or how to slow down or ramp up operations.
Exploring New Avenues: COVID-19 has pointed out a very crucial thing to the big players of the fashion supply chain and that is the traditional benchmarks of operations can fade into redundancy. Hence, it is becoming of the companies that they must look out for new avenues and ponder upon developing new supply and consumer belt. With the business operations coming to a standstill in many parts of the world, and the traditional markets going for an inconsistent demand pattern, companies must look for suitable options from where they can procure and source raw materials and look for new markets. Fashion industry that has long been targeting the European and the American markets, must look towards the east and explore the untapped possibilities that the uncharted market terrains of Asia Pacific, Middle-East may reap.While exploring new possibilities through market diversification, companies must be clear about certain issues such as the probabilities of bringing down the lead time, the question of reliability and continuity, the time, cost and risk entailed in switching over to new domains and facing new complexities, having alternatives handy et al.
COVID-19 has changed all the possible ways the world functioned and we viewed it. While the complexities in operations have increased manifold and the volatility has become the order of the day, it has also unleashed a lot of hidden possibilities that have not been tapped in as of yet. Fashion supply chain, in this overarching phase of shifting consumer demand and diminishing existing market must get out of the rut of the hackneyed system and stand resolutely and take corrective actions to overcome the obstructions that have been doing rounds. Digital expertise seems to be the only way out in the current milieu and the fashion supply chain must adhere to it. Vociferously.