Footwear and Apparel Industry
Industry Trends and Challenges
Footwear and apparel’s market represents a crossover of retail and consumer goods markets, but the industry has its own challenges and trends. One major distinguishing characteristic is the speed of goods to the market – tastes in this industry change all of the time. The supply chain is a huge part of how successfully a company can respond to demands for the latest new fashion.
Tompkins International has had a large presence in both the footwear industry and the apparel industry. We have identified various trends and challenges for the footwear supply chain and the clothing supply chain:
The NEW Demand-Driven Operations
Procurement – Many footwear and apparel industry companies see procurement as only impacting the “BUY” portion of the supply chain; meaning, the point in the clothing supply chain where products are purchased from suppliers.
Many companies are procuring goods directly from China and are collaborating with many different suppliers, and when these global apparel industry supply chains are managed well, costs are saved.
However, there are costs that can be saved in the procurement process by analyzing the full supply chain: PLAN-BUY-MAKE-MOVE-STORE-SELL. To help optimize procurement, review your suppliers and your clothing supply chain procurement process by performing a total evaluation of delivered costs.
When working with your suppliers, view these interactions as a relationship by using a supplier relationship management system. Procurement cannot be just viewed as the “BUY” link on the supply chain; it must be considered a part of the end-to-end supply chain.
Distribution Networks – With rising fuel & material costs (in particular, cotton), the continued drive to extend global supply chains to various regions all over the globe, and as a result of high levels of merger & acquisition activity, there are many shifts taking place to distribution networks. Dealing with foot wear and apparel distribution networks requires a full optimization of the global supply chains. Take a look at Tax Effective Supply Chain Management (TESCM) as a way of bringing down distribution network costs. With the volatility in the supply chain, many companies are contiuously evaluating their distribution networks. Finally, properly use logistics service providers within your network. A major area for cost reduction is optimizing an existing distribution center or distribution network. Volatility in the market demands that distribution networks today be flexible enough to adjust to major changes, including new global production and consumption, energy cost increases, product life cycles, and other factors.
Speed-to-Market – A major competitive advantage can be gained in this industry through being the first to distribute a product that’s in high demand due to trends in the market. Speed-to-market can be improved through global transportation freight consolidation, DC bypass models, supplier relationship management, and using demand-driven supply chains.
Footwear Companies and Asia: Apparel companies have been moving aggressively into Asia – except for those within the footwear industry. Some footwear companies are showing increased action into the region, but compared to apparel in general, the footwear market is still a large hole. Luxury footwear and premium brands have not been moving into the Asia market as fast as other industries. It’s likely that footwear will follow apparel into Asia this year.
Get a quick look at the powerful impact demand-driven supply chains can bring to your customer satisfaction and operational value in this short video from Jim Tompkins, CEO of Tompkins International, and Greg Brady, CEO of One Network.