There is a substantial focus on how the fashion industry can minimize the impact on the environment. Most of the discussion and dialogue in the news and on channels like LinkedIn is about organic cotton, water wastage, recycling, etc.
I rarely read anything on what I believe to be one of the biggest challenges within the textile industry – Wastage due to over production. Thomas Frahm CEO
Maybe it is because people have been trying to solve it for years without success and now just overlook the problem because they find it hard to fix?
A very large part of the turnover for a fashion brand comes from articles which are not sold in advance but is bought for their central warehouse and where the buying volumes mainly are based on gut feeling. Why does the industry not have more focus on making KPI´s on this type of wastage? especially considering the huge quantity of products which should never have been purchased in the first place.
I have been working with buying of collection styles and responsible for a huge NOOS program for a large fashion company and hereby know that too many buying decisions are based on gut feeling and not analysis and facts. I want to start this discussion as I believe we must put more focus on optimizing the purchases which are not sold on collections. It is not something that can be solved, but I strongly believe that it is something that can be greatly improved and hereby help to minimize the impact on the environment.
- Short lead-times Vs markup: A lot of styles are being produced in areas like Bangladesh, Vietnam, or Cambodia to optimize the price and mark-up. When looking at the styles it is easy to be convinced that this will bring the biggest margin for the customers and the brands – but is that the truth?
When choosing the far east production you choose the long lead-times at the same time which can make it harder for you to have the correct quantities on stock. This will mean risking either stock out due to high sales or overstock due to slow sales.
Do you calculate the total revenue by producing close to home Vs far east or do you just look at the price and mark up of the product?
- Speed in planning and buying: How fast are you able to react to sales? When buying more products than you have sold in advance the key to buying the right quantity is to react as fast as possible. I meet a lot of brands that do not plan for success on their product. This makes them unable to make a Re-Orders on the fast-selling styles. And if they do believe in a style, they tend to make large purchases way too early with the risk of overstocking their warehouse.
You can reduce lead-time by always having all data ready and work closely with your suppliers regarding pre-booking of fabric and capacity. A lot of brands do not invest their time in planning their lead-time for success or failure on their products.
- End-to-end data: When brands look to optimize the flow of inventory two key areas are missed. Spending money, time, and resources on integrating data from their customers, making it possible to react faster to sales out in stores. At the same time integrating data from the production lines of the suppliers, helping the brands to react faster to any changes which need to be made in production orders.
Why not focus on the low-hanging fruits that help minimize the impact on the environment made by fashion companies?
Founder & CEO