K3 Fashion Portfolio’s mission is to empower fashion brands by simplifying their operations
The K3 Fashion solution traverses the entire fashion journey, from concept to consumer, meticulously embedded within Microsoft Dynamics 365 Finance, Supply Chain Management and Commerce. Alongside Microsoft, K3 Fashion optimises inventory and distribution processes to drive profitability with real-time planning capabilities. K3 Fashion supports business processes by offering feature-rich presales functionality including planning, design, sourcing, purchasing, warehousing, and finance. The Fashion Portfolio’s North Star focus falls exclusively on the fashion and apparel industry, with a decade-long global history of enabling brands across the small, medium, and enterprise space. Speaking to Fibre2Fashion, Fashion Centre of Excellence Director Rik Veltman discusses solutions for outdoor fashion brands.
How do you see the future of technology in the fashion and retail industry evolving over the next 5-10 years?
For decades, the industry has endeavoured to remain low tech and relied on reducing costs, not by increasing productivity, but by finding cheaper resources, whether materials or labour, to lower prices while maintaining or growing profits. The industry now finds itself at a crossroads, where it is ethically more complex to reduce labour costs by shifting workloads to remote areas with lower living standards.
When looking at the raw materials, we have already hit rock bottom and prices are increasing. To remain profitable, companies will need to increase productivity and reduce stock levels to become much more efficient. There is significant room for improvement, and we will see major steps in productivity advancements through the use of AI.
We will also see improved forecasting to allow companies to take inventory risk away from wholesale customers. Wholesale customers will reduce their pre-orders and focus more than ever on re-ordering successful products.
When discussing the necessity of improving productivity, it is essential not only to reduce costs but also to enable companies to operate with fewer employees. This is crucial because the workforce is becoming scarcer, and most fashion companies are not attractive employers unless they are close to the creative aspects of the business. Consequently, we will see a significant introduction of technology in the industry.
In the end, companies that fail to increase productivity will struggle!
What are the key trends driving innovation in the fashion and retail industry today?
There are a lot of generative AI initiatives in play at the moment, particularly to support the creative process. Marketing is another area benefitting from AI capabilities. Looking at process changes, we see that wholesalers are more and more integrating deeper with their customers. Market information is also becoming more readily available. Social and Ethical Responsibilities are still key, even though the panic around alignment with the various laws has subsided. We are seeing more companies that have started and now continuing their efforts to be ethically and socially responsible.
Another trend concerns inventory management: companies are optimising their inventory and seeking solutions to make it more accessible across various channels. Although each channel plans its future inventory separately, wanting to take responsibility for its specific stock, this often leads to excess unsold inventory. Making inventory available across multiple channels means losing ownership and, consequently, responsibilities. Siloing inventory by channel creates significant work when making inventory accessible.
How important is data analytics in today’s fashion industry, and how are companies leveraging it to gain a competitive edge?
Data is king and data analytics will keep a company alive or kill it. It is as simple as that.
Due to increased costs and efforts to maintain stable sales prices, margins are minimal for most fashion companies. Any wrong decision could immediately mean a loss, while proper decisions based on reliable analytics still does not mean profit. Everything needs to work: product, market, channels, sourcing. The basis of all this is proper data analytics: What products to develop? Where to source? At what prices? Selling in which markets, using what channels?
In what ways is the fashion industry adapting to the growing demand for personalised shopping experiences?
When fashion companies gain deeper insights into their wholesale and retail customers, they can better focus on their needs, requirements, and preferences. The opportunity is significant, and fashion companies are eager to capitalise on it. It is up for grabs and grabbing is what fashion companies do. We are seeing a lot of movement in personalised shopping experiences, and the potential for further advancements is vast. Rapid improvements in personalisation are expected, driven by AI and the extensive product data stored by fashion companies, enabling even better matching with customer needs.
What role do you think AI and machine learning will play in transforming the fashion industry?
The fashion industry is a seasonal business, where a single brand introduces hundreds or sometimes thousands of new products (covering multiple product lines) seasonally. Unlike most products that last months or sometimes years, an average fashion product has an average full price period of 8 to 12 weeks followed by a sale period. The time between procurement and having the product on a shopfloor is 3 to 6 months on average, and often longer (depending on the product group – jackets vs T-shirts). The outdoor industry is slightly different, with longer full price periods, but their average product supply lead times are way longer too! In essence, the products need to be ordered long before there is any sense of performance.
Once we know the performance, the season is over and new products are again introduced to the stores. Similar items appear every season, but they are always slightly or entirely different, in different colours, with different artworks, often in different materials. So, without a history, without a proper outlook, it is extremely difficult to deal with fashion products.
AI will make life simpler in many aspects. Where today a person takes the responsibility to forecast, or to build a forecast, Machine learning and AI can take that over, and suggest several different outcomes to pick and choose from. Today, building multiple scenarios for forecasting, for order allocation, for creating BOMs (bill of materials), for creating a sales plan, for building a merchandising plan etc is a dream. Finding a single optimal calculation is already complex. This complexity will make AI a dominant tool going forward, with Machine Learning playing a key role.
Can you provide an overview of the K3 Fashion Portfolio and its mission in the fashion and retail industry?
K3 Fashion Portfolio’s mission is to empower fashion brands by simplifying their operations, allowing them to focus on their creative and strategic goals. We embed our solutions within Microsoft Dynamics 365, combining our fashion expertise with Microsoft’s leading technology. By embedding our solution into the D365 technical landscapes, fashion brands can manage complex inventory and supply chain operations, leverage data for smarter decisions, and alleviate their biggest challenges.
What specific challenges do outdoor fashion brands face, and how does K3 Fashion address these challenges?
Outdoor fashion brands face unique challenges such as longer lead times due to the scarcity of raw materials, a high demand for sustainability, stringent quality and durability standards, retroactive order changes, and high-season dependency. K3 Fashion addresses these challenges through the following:
- Longer Lead Times: We provide functionality for raw material management and quantity overviews, helping brands plan effectively and adapt to changes swiftly.
- Demand for Sustainability: Our CSR module includes classifications and certificates for suppliers, raw materials, and products, enabling brands to meet consumer demand for sustainable and transparent practices.
- High Quality and Durability Standards: Our solution helps manage detailed product specifications and facilitates communication between suppliers and brands, ensuring the highest quality standards are met.
- Retroactive Order Changes: K3 Fashion supports retroactive order changes, allowing brands to accommodate customer requests efficiently.
- High-Season Dependency: We provide tools to manage seasons and collections, ensuring brands can plan and deliver products on time.
How does K3 Fashion help outdoor brands meet the increasing demand for sustainability?
Sustainability is a critical focus for outdoor brands, and K3 Fashion supports this by offering a comprehensive CSR (corporate social responsibility) module. This module tracks and manages sustainability certifications and classifications for suppliers, raw materials, and products. It provides transparency and helps brands make informed decisions to reduce waste and enhance sustainability practices. Additionally, our solutions facilitate long-lasting and durable product designs, which naturally contribute to a more sustainable lifecycle.
Can you explain how K3 Fashion handles high quality and durability standards required by outdoor brands?
High quality and durability are paramount in the outdoor fashion industry. K3 Fashion ensures that brands can maintain these standards by offering detailed management of product specifications, raw materials, and production processes. Our solution allows for thorough tracking and communication between suppliers and brands, ensuring that every product meets the required specifications. Additionally, our product cost overview feature helps brands stay on top of pricing to ensure they can maintain quality while remaining profitable.
How does K3 Fashion support outdoor brands in managing retroactive order changes and high-season dependency?
Managing retroactive order changes is streamlined with K3 Fashion’s functionality that allows for easy updates to orders, ensuring that brands can meet customer demands even after initial orders are placed. For high-season dependency, our solution offers robust tools for planning and managing seasons and collections. The Availability to Promise (ATP) feature ensures that brands can commit to delivery dates based on accurate inventory levels, making seasonal planning and execution much more efficient.
What advice would you give to outdoor fashion brands considering K3 Fashion’s solutions?
My advice to outdoor fashion brands is to look for solutions that are specifically tailored to your industry’s unique challenges. Generic ERP systems may not address the specific needs of outdoor fashion. K3 Fashion offers a comprehensive functionality that can handle everything from inventory management to sustainability tracking, ensuring you can focus on what you do best – creating high-quality, durable, and sustainable outdoor apparel. By adopting K3 Fashion, you can streamline your operations, improve efficiency, and stay ahead of the curve in a competitive market.
20230103183907.png)
