Know how can integrating supply chains help apparel manufacturers...
Have you ever wondered why it takes 13 weeks to produce a garment in the apparel industry? After all come to think of it - it actually takes only 20 odd minutes to actually manufacture it! Yes, one can argue that getting the fabric takes time - but why does fabric take 6 weeks or even 10 weeks to get manufactured? As one sifts through the complex and often fragmented supply chain of the garment industry, one realises that the bulk of the time is spent on WAITING.
Waiting for what and why?
Lets look at the life of a fabric manufacturer. He has expensive machinery that needs to be running 24X7 - after all when depreciation is a significant portion of the cost, then he has to keep the machine busy all the time and would rather have a lot of stuff waiting to be processed just to make sure that in case one product is not there, then he can replace another one and keep the machine busy. Sort of like a doctor. Ever wondered why you have to keep waiting for a doctor? Its simply because the doctor is an expensive resource, and he would rather have people waiting for him, than ever have a possibility that 2 people don't show up for an appointment and he is sitting idle. So, you are left with a situation, where even if the actual fabric processing time is not more than a few days - you are given deliveries 6-8 weeks hence, as the mill always keeps 6-8 weeks worth of work waiting all the time. Now imagine a supply chain that has 3-4 such processes and at each process everyone is trying to keep themselves busy - and you will understand this waiting time problem! If everyone even keeps 2-3 weeks buffer - then you can easily cross 8-9 weeks of just waiting time alone!!
So, how do you overcome this problem? - when everyone in the supply chain is doing local optimization of costs by keeping themselves busy - but decreasing the overall pie - by keeping buffers that increases lead time and in turn results in lost sale or excess inventory.
Imagine a perfect world - where everyone had full confidence that they will never have a situation where they have uncertainty on the supply side. i.e. fabric person knows that the moment his raw material finishes, at the exact same time another lot shows up and his machine is always busy - without keeping any fabric lot waiting. A garment product line knows that the moment they finish their fabric, another lot shows up at the exact same time and their lines will always be busy. If that happened we could potentially churn out a garment from start to finish in less than 3 weeks!! Still keep machines busy and without increasing cost! Wouldn't that be amazing!
Integrating the supply chain is a first and critical step in achieving this utopian dream. Imagine if systems could alert each other in advance of when an order is going to be coming in, so that they could potentially reduce waiting stock from 6 weeks to even 4 weeks. Relationships between various stakeholders in the supply chain need to shift from being transactional to one that is based on continous and integrated view of things. Just these smaller improvements in communication and real time data, will have a dramatic effect on the way these fragmented supply chains worked, leading to huge savings in lead time and cost.
Brands and Sourcing companies need to look at their supply chains in a more holistic manner and as a single entity. Rather than local optimization, global optimization of the supply chain is a must. Quantifying waiting time and what it costs in terms of lead time and costs is absolutely critical to figuring out how to integrate this supply chain. Only then can one make quantum jumps in streamlining the supply chain. But for those who can accomplish this, there is a pot of gold!