3 Main Drivers for Supply Chain Automation in Apparel Manufacturing

Last updated: 11-28-2020

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3 Main Drivers for Supply Chain Automation in Apparel Manufacturing

The apparel manufacturing industry is just one of many markets faced with adapting to a continually competitive landscape. From traditional brands and players to those who are new or emerging, all are routinely looking for the competitive advantage that will set them apart. Often, this advantage comes in the form of new technologies and automation to improve productivity, efficiency and consistency. Not only can new technologies improve the product and the time to market, but they can also provide industry professionals with more data and analytics regarding their overall operations in an effort to seek out continuous improvement.

As such, three main drivers of supply chain automation now appear across the apparel manufacturing industry: 1) powerful suppliers and first tier global manufacturers well positioned to reap the benefits of automation, (2) increased demand for customized goods and (3) the increased importance of efficiency.

Those with the most to gain from automation include powerful suppliers and first tier global manufacturers since they can invest resources quickly and adjust their business models to align with new automation processes. Furthermore, these types of suppliers can further take advantage of automation since there collaboration has increased and power asymmetries have declined across the global supply chain.

Collaboration has taken on greater importance recently as brands, suppliers and technology firms have started working together to develop advanced technologies for both the footwear and apparel markets. Now, more supply chain management companies want to create brand-supplier collaborations through unique partnerships, which offer financing support and help build capacity within the network.

This improved capacity helps both the brand and suppliers adapt to the changing needs of the market. Overcoming the initial cost and implementation burden of automation technology allows these global manufacturers to more quickly adopt new technology and reap the benefits.

Another driver of automation is the overall increased demand for customized goods. The perceived need for automation in this industry in general is often low due to the belief that the fashion and apparel industry has not changed much from a technology perspective. It is argued that most products are very basic and can rely on existing machines and technology for production.

Additionally, transitioning from manual processes to automated processes does not always present a favorable outcome both from a process or cost perspective.

Where the advantage does exist though is with customization. Customization via manual processes are time intensive and inefficient, whereas automated processes for customization are much quicker. Automation allows for the efficient production of small batches of customized product that can be sold at a premium, whereas manual process would be too labor-intensive to reap meaningful benefits.

There have been some notorious successes with this approach, including Adidas’ 2017 pop-up knit customization in Berlin where customers designed custom-fit sweaters. Because of the automated production process, which included full-body scanners connected to knitting machines, shoppers were able to receive their customized product in store.

Another argument for this approach is that high levels of customization create customer loyalty, and consumers often expect to pay higher prices for personalized products. These factors alone can present long-term benefits to the company, and pay off exponentially.

Lastly, efficiency is king when it comes to automation. Often noted as one of the key benefits, and a very important driver of costs and profits, efficiency is a metric that should be carefully managed and optimized. Efficiency helps with standardization and improvement of internal processes, helps to minimize production costs and lead times and also influences environmental sustainability.

Automation can meet many of these needs by helping to reduce lag times and bottlenecks in production, improve management systems, influence forecasting and purchasing practices as well as create better internal practices. Perceptions among brands is that automation helps facilitate the quick delivery of reasonably priced goods, and that in the future will be a key component of overall competitiveness across the industry, in addition to digitization and connectivity.

The apparel manufacturing industry has long relied on traditional and labor-intensive processes, but the need forincreased flexibility and rapid responses to consumer demands has moved many companies towards automation. Automation can have a high up-front commitment from both the cost and process perspectives, which positions larger companies better for investing in this type of innovation. For smaller companies, partnerships and collaborations that are mutually beneficial are springing up as an innovative means to achieve these goals.

This increase in automation enables companies to be more agile, improve their efficiency, promote sustainability and increase their overall competitiveness within the industry. Automation is seen to be an essential component of future developments in this industry, so regardless of size—all companies need to critically examine their current operations and determine when, and how to pursue automation in the future.

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