Supply Chain Management

In the current scenario of globalization many apparel retailers are building strong supply chains to gain advantage over their competitors by offering the best value to their customers. The supply-chain management (SCM) has become very critical to manage risk, dynamism, and complexities of global sourcing. A totally integrated supply chain is required for the company to get gain the maximum benefits. The objectives of the supply chain and the performance measurements need to be understood in order to build the most effective supply chain. Performance measurements provide an approach to identify the success and potential of supply management strategies. One major aspect of the SCM is to select the right sources of supply in the global business environment that can support corporate strategy. Considering the rapidly changing market conditions and customer seeking the best value, long-term relationships with the vendors became very critical in the apparel industry. Therefore the apparel retailers are looking for the vendors who can provide the best cost in the fastest way. Such a relationship is regarded as partnership since it includes activities such as information sharing, joint product design, or sharing storage spaces.
What is Supply chain Management? All stages involved, directly or indirectly, in fulfilling a customer request it includes manufacturers, suppliers, transporters, warehouses, retailers, and customers.

The Present scenario: In today’s world of business, the environment has undergone drastic changes, and has become more competitive than ever before. With the increasing reach of media, and globalization of business, one country’s products are available in other countries in a wink. SCM aids the organization to evaluate their entire operation, and restructure it in such a way, that, they can focus on its core competencies. Selecting the appropriate system of SCM will not only enhance the company’s market position, but also provide them with strategic decisions in choosing the right partners, manpower and resources. One of the very prominent examples in apparel sector is ZARA. While Zara’s original stores were in Spain, today it has stores throughout Europe, the Americas, the Middle East, and Asia. Today, Zara can replenish existing items in as little as two weeks. The company spends almost nothing on advertising and uses the savings to support higher cost of producing in Spain. Zara’s success proves the theory that if a retailer can forecast demand accurately, far enough in advance, it can enable mass production under push control and lead to well managed inventories, lower markdowns, higher profitability (gross margins), and value creation for shareholders in the short- and long- term.

The Future of SCM: Information technology has become a very vital part of a successful SCM system and has crept in step by step, beginning with electronic invoicing, computerized shipping and tracking and automated notifications that were advanced by companies like FedEx and UPS. In the next several years you will be hearing more about Supply Chain Sustainability or the Green Sustainable Supply Chain. A Green Sustainable Supply Chain can be defined as “the process of using environmentally friendly inputs and transforming these inputs through change agents – whose by products can improve or be recycled within the existing environment. This process develops outputs that can be reclaimed and re-used at the end of their life-cycle thus, creating a sustainable supply chain.” The whole idea of a sustainable supply chain is to reduce costs while helping the environment. Further on the apparel industry has immense social impacts on the developing nations where the merchandise is produced. Fast fashion has left no space for strengthening social compliance of the industry on the whole. Moreover being labor intensive industry it becomes all the more vital to delve into this issue as the future of our industry largely depends on mass production from the developing parts of the world. The recent incident in Bangladesh is a live example of extremely poor social compliance leaving the supplier and the workers in difficult situations. The benefit of implementing a green sustainable supply chain is that we can improve the profitability of our company and help the environment. Green can not only be profitable, but the right thing to do.

Leave a Reply