Creativity and innovation have always been at the nucleus of the approximately $2.4 trillion fashion industry. Much like technology, fashion that rules is both dynamic and visionary. It’s no wonder, then, that the two are inextricably linked; that is, fashion and technology.
From the very first sewing machine that paved the way for the textile revolution, to the growth of online retail that has led to massive shifts in fashion marketing and distribution, technology continues to influence the rapid transformation of fashion.
Today, AI is being utilised to predict style trends and design clothes, and cutting and sewing are already automated. Moreover, virtual fitting rooms, as well as virtual alter egos (avatars) created for online fittings, are predicted to become more mainstream. In a very real sense, technology is automating fashion and shows no signs of stopping.
Fashion on-demand
Traditionally, the seasonal fashion groupings of spring/summer and autumn/winter practised since the Second World War have prevailed. The gradual rollout of what seasonal styles are predicted to be in demand gave brands ample time to produce the optimal number of clothes for each season. However, this is set to change.
In fact, the change has already begun with the rise of fashion on-demand. This major shift sees products being “pulled” rather than “pushed” into the market by designers and buyers. Instead of relying on fashion forecasts or educated guesswork, custom-made production or personalisation is now a major trend, thanks to the help of digital technology.
This has caused significant changes in the procurement, production, and distribution processes which were always based on predictions of future consumer demand. The “pull” fashion dynamic, then, implies that restocking inventory can only happen when all units are consumed.
Pros and cons of on-demand production
Of course, there are advantages and disadvantages to the on-demand production model. An upside of on-demand production is the lower capital outlay required, making it ideal for start-ups and small enterprises. It also means lower inventories, as well as greater adaptability and agility. Demand uncertainty is also reduced with shorter turnaround cycles, whilst also allowing for the adoption of a more sustainable small-batch production cycle.
Conversely, however, smaller batch sizes can also mean higher production costs, as well as an increase in transport costs if it involves nearshore or offshore production. According to McKinsey’s State of Fashion 2019 survey report, “Sixty per cent of apparel procurement executives expect that over 20 per cent of their sourcing volume will be from nearshore by 2025.”
Data analytics, automation, and the rise of microfactories
Harnessing the power of automation and data analytics has allowed start-ups to easily adopt made-to-order production cycles. With major tech companies from CAD development working on digitising and partially automating production (including designing, cutting and sewing), companies can save time and manpower. As a result, producing even a batch size of one can become cost-efficient. So it certainly won’t take long for mass market players to take the cue, and follow a similar model.
In fact, major players have already begun taking advantage of the power of advanced analytics to guide their planning decisions and production processes. And although apparel production automation is still at its nascent stages, the technology behind it is rapidly advancing, thereby indicating its huge potential. Examples of major companies that have begun adopting on-demand production include Adidas, Superdry, and Uniqlo.
Adidas is one of a group of large brands that are showing signs of leveraging speed to shift towards on-demand. Aside from its Arkansas operation, it operates “Speedfactories” in Atlanta and Germany that together are expected to produce around a million pairs of running shoes a year by 2020, using digital design to enable mass customisation.[1]
Superdry launched “Superdry Preview,” limited-edition collections that will go from design to delivery in just 6 weeks.[1]
Uniqlo parent company Fast Retailing has signalled its intent to produce on-demand knitwear at scale through its partnership with Shima Seiki.119 Shima Seiki produces 3-D knitting and technology it labels “Wholegarment,” which produces seamless knitwear and requires no post-production labour, and anticipates that its tools and machines will enable “mass customisation.”[1]
Microfactories also embody the revolutionary impact of on-demand production as they are capable of high-speed, agile garment production. They help speed up prototyping in design studios or on shop floors, as well as enable personalisation and waste reduction.
The gradual adoption of innovation
Although seemingly antithetical, what this heading means is that leading brands, unlike start-ups, are likely to embrace the principle of on-demand fashion gradually. The reason being that quickly adopting radical changes comes at a high cost, and creates disruptions in the current supply chain.
What this means for retailers
Automation can make nearshoring more attractive for mass-market appeal retailers and brands, but will also make onshoring more economically viable eventually – for specific products. Using the U.S. as an example, assuming that all key on-demand production technologies are available to all, Mexico would be more cost-competitive compared to going offshore to India or Bangladesh, for example.
For Australia, China can remain a viable nearshore alternative whilst going onshore may become even more attractive as more advanced manufacturing technologies become more widespread. Someday, automation technology can make the production of both simple and complex garments less labour-intensive so that onshoring becomes almost inevitable.
How to get started
Based on the pattern of changes, mass apparel brands and retailers must begin to move toward a demand-focused value chain. To remain relevant, they need to be able to adopt automation technologies and prepare to satisfy consumers who desire personalised fashion.
Strategic decision-making
Company decisions on nearshoring and automation must be needs-based and must make financial sense. They must always consider the feasibility of nearshoring, as well as the commercial value of lead time reduction. They cannot blindly embrace automation. They should have a well-developed fact base to guide their strategy, and which they can refer to in planning for different product and design types.
Essential skills and mindsets
To successfully adapt to a demand-oriented supply chain, a consumer-focused and agile mindset is required. The challenge, then, lies in sourcing the right talent in digital or advanced manufacturing technology, and in making intelligent sourcing decisions.
Key partnerships
The need to have ties with global mega-suppliers to deliver massive manufacturing requirements remains. However, it would be essential for retailers and fashion brands to partner with tech companies specialising in the development of innovative automation solutions. The latter are better-placed to develop disruptive technologies that influence the fashion industry.
The change starts now
For apparel brands and retailers wanting to forge ahead, this is the time to make strategic changes in their business model.
Nearshoring should be adopted as early as possible, even at the risk of slightly lower profits. They should also start collaborating with technology firms, as well as with manufacturers. They should already be identifying key engineering talent they can employ in-house as they prepare to lead the way in terms of nearshore manufacturing and automation.
[1] Business of Fashion – The Year Ahead: Mass Market Goes On Demand