- The apparel and footwear business is highly demanding, forcing companies to contend with constant challenges in a global business environment: there is relentless pressure on price, cost, and lead times. Trends are created overnight, and the industry has to rapidly adjust. Contract domestic and offshore production combined with global procurement processes create complex value chains that can be inefficient and difficult to monitor. Fashions often change quickly and without warning.In the apparel and footwear industry, companies must cope with seasonal fluctuation, proliferation of design variations,scant information about volatile demand that results in forecast uncertainty, stock shortages, and costly markdowns.
- Apparel and footwear companies today are increasingly assuming the role of coordinator for both internal and inter company processes as their core competencies shift away from production and steadily move toward planning, controlling, and monitoring textiles in the value chain.
- Multilevel division of labor and outsourcing have long been common practice in this industry. In the past, companies achieved their greatest cost-cutting potential by optimizing their production processes. However, the production of clothing and shoes can only be automated to a certain degree, causing the savings potential by these means to quickly reach its limit. The next step was to transfer production to low-wage countries, which in turn meant sacrificing high quality and transparency in the production process. Having production sites spread out around the globe has made supervision and monitoring of the production process more difficult, the transport routes longer and more expensive, and meeting confirmed delivery dates a perpetual challenge.
- Areas such as product development, raw material and finished goods requirements planning, production planning, coordination and control, transport optimization and monitoring, and quality assurance are taking on more and more importance and therefore tend to remain at headquarters. As a result, the information flow and collaboration among partners in the textile supply chain (logistics service providers, textile manufacturers, contractors, agents, and so on) are increasingly more critical to the success of apparel and footwear companies. Fundamental changes and restructuring are taking place in the apparel and footwear market.