STYLE, FASHION, BRAND IMAGE- these are the words capture theimagination of consumers shopping out for values in apparel items. Theincreasing globalisation, the market diversification and the volatile fashionintensify competition in the apparel chain. As a consequence, companies areforced to gain market shares by increasing product diversity to improve market share.
The diversity factor, which is largely determined by variousconsumer perceivable attributes of apparel like design, handle, size and fit,leads to corresponding wide spectrum of manufacturing parameters in upstreamdirection. This variability in production parameters and corresponding smallbatch size are major deterrents in achieving delivery schedule and qualitystandards, which severely affect the marketability of a brand. This is atypical problem faced by apparel supply chain, where scheduling of work becomescomplicated by the introduction of a highly diverse range of products.
This complexity makes management of a given product basketwith respect to time, cost and serviceability more difficult. Moreover, productreplenishment in apparel supply chain assumes new dimension, as global sourcingbecomes the order of the day, with raw material supply, manufacturing,garmenting, distribution and retailing- all are dispersed across the globe.Under this circumstance, it becomes mandatory to "
Nature of Product Variety:
Consumer perceives apparel merchandise through a unique setof attributes. The Unique Value Proposition (UVP) of an apparel item isgoverned by visual and other sensation (Exhibit 1). Thesesubjective sensations can be captured through objective parameters like design,comfort and handle. Each of these objective parameters is influenced by variousmaterial & process characteristics in the upstream direction of apparelchain, as shown in the Exhibit-1.
Impact of Product Variety:
Impact of product proliferation can be mapped across two levels- Retailing and Manufacturing.
On Retailing & Sourcing: From a given fabric type, an entire range of apparel S.K.U. can be proliferated, as shown in Exhibit-2. It shows how one type of basic textile product (purple colored fabric) delivered out of textile manufacturer's warehouse gets translated into so many (144 no.) S.K.Us by the time it reaches the retailer's shelf. In addition to this proliferation shown in the exhibit, a retailer may want the goods to be shipped on a hanger or in particular package and may want the manufacturers to mention the price and other details before shipping. Moreover, variability introduced in accessory stage (style of button, calf, collar, zipper etc) will further amplify this diversity at retail level.
Looking into the entire range of variables involved, one can deduce how many thousands of S.K.Us will result at retail level from a given product basket comprising of hundred different varieties of basic textile fabric with respect to colour, design, fabric structure etc! Needless to mention the enormous task of developing and managing this "ocean of S.K.U.s" across globally dispersed supply nodes.
On Manufacturing: Highly diversified product range means increased number of lots at various stages of operation.
All these product parameters lead into multiplicity in number of batches at various stages of process. The key drivers of lot size at different stages of operation are mapped across process domains in Exhibit 3. Order size and maximum batch size permissible at different stages as determinants of lot size are common across manufacturing stages and are not shown in this exhibit.
Hence various apparel and textile manufacturing parameters lead to increase in number of s.k.u. in retail shelf on one hand, and increase in number of lots on manufacturing end on the other. And this multiplicity in manufacturing batches has contributed to following complexity into the nature of operation.
- Loss In Productivity
- Value Loss
- Difficulty In Assortment planning,
- Poor Asset management
All these have resulted in increase in manufacturing cost.
Loss In Productivity: In fibre and yarn dyeing, occurrence of re-processing increases with higher number of lots due to increasing difficulty in shade matching. Machine stoppage increases with more number of cleaning after every different shade being dyed. Also there is chance of machine remains idle or under-utilised because all machine have fixed batch size, which may not match with order size of each individual shade component at fibre or yarn stage.
In spinning, weaving and processing, occurrence of changeover increases with higher number of lots. Also uneven processing and loss of productivity results with frequent changes in case product diversity increases.
In garmenting, the scheduling becomes increasingly difficult with increasing types of basic fabric types, garment fits and models. In a completely automated apparel manufacturing operation, it would be difficult to synchronise movements of body, collars, buttons and other accessories across cutting, assembling and stitching of final garment. Garment productivity suffers as a result of this highly diversified product ranges.
Higher Value Loss: Material loss increases at every stage with increase in number of lots. It is largely because of fixed amount of material goes into waste for every lot irrespective of lot-size. So more waste is generated with higher number of lots.
For instance, it is found that material losses are typically
higher for all-wool, finer micron wool blend and smaller lots in dyeing and
spinning. In finishing, wastage is higher for all-wool fabric than that of
blended fabric.
In weaving, there is fixed length, which goes into wastage with every warp-beam. So with reduction in beam-length and more number of beams, the amount of wastage increases.
In apparel manufacturing, development of marker becomes increasing difficult with increasing diversity in garment. Consequently material waste in pattern making and cutting increases with under utilisation of fabric. n addition to above impacts, product variety also contributes largely to generation of more sub-standard goods at the end of every process.
Difficulty in Assortment Planning: To achieve maximum impact on consumer's value perception, it is necessary to make all the assortments of a particular product line available on shelf. The availability of complete range of an item necessitates considerable assortment planning at every node of apparel supply chain, starting from initial textile manufacturer. But proliferation of lot sizes deters success of this assortment planning.
As back-end textile manufacturing consists of both batch and continuous processes, it becomes mandatory to move all the assortments of a style together out of final warehouse. To achieve this, it is necessary to harmonise the movement of manufacturing lots in a way that makes the entire component (assortments of a style) available during garment cutting stage.
However, each component has differential processing time, making it difficult to push the entire 'assortment of product' together through the manufacturing leeway of apparel chain. For instance, in an assortment comprises white and color fabric, white products reach final warehouse earlier as processing time for white goods is considerable less than that of color merchandises. And higher the number of product components, more difficult it would become to achieve this synchronization across product-process continuum. The result is that some designs out of entire set of assortments arrive at the garment cutter earlier, leading to assortment breaking. Obviously the final upshot is lost sales due to lack of complete assortment on retail-shelf during purchase.
In apparel manufacturing, a Master Production Schedule (MPS) is always developed to meet the contract delivery dates of the buyers. In many cases, the production orders from the same buyer are grouped together on the production schedule. Those late completed orders contribute to extra transportation costs and reduce selling price of the garments demanded by the buyers to compensate the late delivery.
Poor Asset Management: In internal supply chain, all components needed for a particular product are required to be processed together. With increase number of variety, the time taken for individual component to be processed increases, as lot changeover time and various downtimes related to quality problems increase. This results in higher amount of work-in-process at various stages of operation.
In fibre and yarn dyeing, higher number of changeover from one type of blend to another increases machine downtime. Also time required for matching shades increases with more product variety. Due to capacity constrain of different machine regarding batch size there is more chance of excess dyeing. Waiting time for component shade also increases, as there is more variety to be processed in a given time. All these leads into more material being locked in the process.
In spinning, multiplicity in various blend, count, and twist combination results in more waiting time due to higher number of change-over and insufficient batch quantity of a particular blend-count-twist combination to feed ring-frame.
In weaving and finishing, machine set up time increases with more number of beam-gaiting and more frequency of change in process sequence. Also in finishing, batch preparation time increases with more number of varieties as all similar quality-pattern of a particular product group need to be processed together for uniform finish. All these needs more material in process, which correspondingly increases inventory carrying cost at each stage of processing. All these lead to higher work-in-process.
In warehouse, the finished goods despatch depends on availability of all similar quality of a particular product. In a more diverse product mix, it will take more time for individual quality-pattern to reach in the warehouse. This results in increase in waiting time for balance quality-pattern and higher finished goods inventory.
Way Forward- Recalibrating Supply Chain:
It is evident that a wide spectrum of product variety has impact on operational level of a textile and garment unit. While some of these impacts are resulted due to technological constrains, other are generated by avoidable mix-up, quality problem. But all these lead into failure in delivery commitment and sub-standard quality. While the objective of increasing product mix is to ramp up market share, on the other hand it leads into other operational loss and non-fulfilment of delivery schedule. The later significantly increases manufacturing cost and considerably affects the bottom line. Based on experience, two attempts are mentioned to counter this product proliferation syndrome.
A] Delayed Differentiation or Postponement:
Product postponement pushes the value differentiation point further down the apparel supply chain, to leverage the advantage of economy of scale through aggregation of demand across multiple S.KUs. For instance, one can introduce 'product differentiation' with respect to color across three stages, as shown in Exhibit-4.
As differentiation point propagates in forward direction of apparel chain closer to final consumer, number of lots in the stages prior to the 'differentiation point' gets reduced. For instance, under stage-III, coloration point has been moved after fabric formation, unlike in stage-I where coloration takes place in fibre stage. The number of lots in third stage is considerably less, as only white fabric needs to be produced as against so many color fibre and yarn lots under stage-I
In apparel manufacturing stage, delayed differentiation has considerable impact in trimming down number of batches to enhance operational performance and responsiveness. For instance, in apparel knitting process, it is possible to move garment coloration point as close to final consumer as possible. In Shima Seiki digital knitting machine, the conversion of digital color data to the physical fabric is moved closer to the point of consumption. In the traditional garment model, the differentiator is the cutting machine. For the digitally knitted garment, the differentiator is the knitting machine itself.
This reduction of lots prior to the differentiation point correspondingly increases batch size with resulting benefits in operational platform of apparel chain. However, one need to factor in the differences of product aesthetics as value-differentiation point moves across supply chain. The 'feel and appeal' of a yarn-dyed goods is considerable different than a fabric-dyed good from consumer's point of view. Deciding product-postponement stage needs to consider this final aesthetic value also.
B] Product Rationalisation:
From exhibit-3, one can find out number of manufacturing lots at each stage. Assuming 2 colors, 2 types of fibre, 2 different linear density (count) of yarn, 2 basic designs and 2 process types, a back-of-the-envelope calculation can show that lot sizes in dyeing, spinning, weaving and processing will be 4, 8, 16 and 32 respectively. The similar calculation can show how many times these 'lots' multiply in reality with hundreds of colour, counts, weave design etc in upstream direction.
To 'brake' in this explosion of manufacturing lots, an A-B-C analysis could be carried out to rationalize the product-base after critically looking into the contribution of each variable (color, count, design etc.) to the final product basket.
By taking out A-B-C analysis of sales across product items, significant insights can be gained over the product-mixes having maximum impact on firms top line. In composite mills set up, it is often found that less than 20 percent product-items contribute over 80 percent of revenue. Balance 80 percent of the product mix can be rationalized keeping cost-benefit trade off in mind.
Similar A-B-C analysis can be undertaken at different stages of textile supply chain, to determine number of lots contributing to final product varieties. For instance, in spinning A-B-C analysis might reveal that only 30 percent of lots (count-blend combination) contribute to 80 percent of final product basket. So there is enough scope to trim down the balance 70 percent of 'spinning lots' without having much impact on product diversity. Similarly it can be found minority of lots in dyeing (fibre) or in weaving contribute to majority items in the final product basket. Hence, it is judicious to whittle down some of the lots in these stages to maximise operational effectiveness without taking a beating on final profitability on account of lost diversity.
Tailoring Product-Mix Holds The Key:
Already a high degree of variability presents in retail due to volatile fashion and ever-shortening season. Product lines get proliferated with creation of new segments. For e.g., in sports wear the already established lines- golf wear, tennis wears or swim wear are common, now 'Yoga' wear is in hip. Moreover, product-lines, sizes and overall fits vary with globalisation of market. All these tend to amplify S.K.U variability at retail level to an unprecedented level.
Retailer and buying houses need to manage this diversified product lines right through different stages- product development, sample approval, bulk sourcing of components, production or outsourcing apparel, distributing finished product across retail outlets and merchandising. And all these activities need to be coordinated across vast geographical distance. This complexity of operation is magnified many times by the increasing product mixes in the basic textile fabric.
Most of the times the adverse impacts of product proliferation go unnoticed by the frontline organizations (retailer or buying houses), as organizations in textile-apparel-retail chain are seldom inter-connected, and very little coordination exists among different players up to the initial textile manufacturers.
Retailers have to realize that they should not focus only on purchasing and selling, but on the entire supply chain. Because, should a manufacturer not be in a position to deliver the goods at an agreed point of time, delays run through the entire supply chain up to the end customer. Based on the given configuration of apparel supply chain, the retailer has little possibility to exercise control in this process.
Even relatively simple garments depend on the combination of a fabric from one factory, buttons & zipper from another, and snaps from yet another, all of which must come together in time for the finished apparel to be stacked on store shelves.
Moreover, as product development consists of developing & selecting fabric swatches, figuring out garment style and merchandise flow, proliferation of product-mix results in high product development cost, long design-to-market cycle time. Typically design-to-market time for a fashion-apparel item is 6 to 9 months. Generally it is found that 70 percent of this time comprises non-value added activities such as communication delay, waiting time for assortments, and non-approval of merchandise at various stages etc.
The paper shows that a judicious product mix in basic textile material will make the entire apparel supply chain more manageable without sacrificing the end diversity in terms of apparel fit, size and style that attract the consumer's imagination.
About the Author:
The Author is a supply chain professional. Having graduated from Indian Institute of technology, Delhi, he has experience in leading textile and apparel organizations. He is currently with KDS group, Bangladesh as Chief Operating Officer.
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