Wednesday, February 1, 2017

Supply Chain Management in Apparel Industry

Supply chain and supply chain management:
If we denote supply chain as, it is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. A supply chain is actually a complex and dynamic supply and demand network. Main purpose of supply chain is to satisfy customer needs and generate business profits.

Supply Chain Management is the integration of key business processes from end user to original suppliers that provides products, services, and information that add value for customers and other stakeholders. In apparel supply chain every organization starting from initial fiber supplier to consumer purchasing apparel products for final consumption. We will get clear concept about supply chain management from the figure 1.
supply chain management
Figure 1: Supply chain management
The apparel industry stands out as one of the most globalized industries in the world and it is a supply driven commodity chain led by a combination of retailers, contractors, subcontractors, merchandisers, buyers, and suppliers; each plays an important role in a network of supply chains that spans from fibers to yarn, to fabrics, to accessories, to garments, to trading, and to marketing.

Moreover in today’s competitive environment, markets are becoming more global, dynamic, and customer driven, where customers are demanding more variety, better quality, and service, including reliability and faster delivery. Therefore, to ensure growth, it has become mandatory for the apparel industry to be more participative and adaptive. Traditional, supply chains are viewed as a flow line, where input enters at one end and transforms to output at the other end. This is quite static and is applicable for products that are changing less frequently.

Responsiveness of supply chain:
In a rapidly changing competitive world, there is a need to develop organizations and supply chains that are significantly more responsive than the existing ones. The responsiveness of the supply chain system can be defined as the ability of the supply chain to respond purposefully and within an appropriate time frame to customer requests or changes in the marketplace. Apparel markets are synonymous with rapid change and as a result, commercial success or failure is largely determined by the organization’s responsiveness.

Across industry sectors, such as fashion products, personal computers, consumer electronics, and automobiles, companies are contemplating strategies to increase their responsiveness to meet consumer needs by offering high product variety with short lead times.

In order to enhance the responsiveness of the whole supply chain, time management and the use of technology become crucial topics in the industry. The enterprise resource planning (ERP) system has been employed to deal with this issue by re-engineering the supply chain within and beyond an organization. ERP is a method of effective planning of all the resources in an organization. The main objects of ERP is to collect all the information of an enterprise under one roof for assisting planning and implementing decisions having complete visibility. ERP covers the techniques and concepts employed for the integrated management of businesses as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise. ERP software is designed to model and automate many of the basic processes of a company, from finance to the production floor, with the goal of integration of information across the company and eliminating complex, expensive links between computer systems that were never meant to talk to each other. The ERP platform is specifically necessary in the apparel industry. This is because the apparel industry and its supply chains face a demand-driven market and it becomes of upmost important to obtain the latest market information and share the information among the channel members.

Analysis of Apparel Supply Chain:
In maximum case apparel manufacturing organization is harassed to make the downy supply chain in order to deliver garments to the buyer on time as well as gain the profit margin by reducing unnecessary waste or muda from chain.

Root cause analysis of three stages of the apparel supply chain:

  • Manual laying
  • Manual pattern making
  • Finished item arrangement without visual display
  • Manual material movement
  • Manual ticketing
  • Excess manpower
  • Excess time consumption
  • Excess cost
  • Unavailability of storing system
  • Unnecessary overtime
  • Unnecessary manpower
  • Unnecessary waste (spare parts, fabric, thread, etc.)
  • Rework
  • Overproduction
  • Inappropriate processing
  • Manual goods handling
  • Ancient machine utilization
  • Excess WIP (work in progress)
  • Unavailability of finishing materials
  • Ordinary quality of garments
  • Irregular machine repairing system
  • Stacking goods without proper arranging
Figure 2 shows the real state of the supply chain network in the apparel manufacturing industry and Figure 3 shows the proposed supply chain for the manufacturers. 
Supply chain of typical apparel manufacturer
Figure 2: Supply chain of typical apparel manufacturer
 Proposed apparel supply chain network for the manufacturers
Figure 3: Proposed apparel supply chain network for the manufacturers