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Customer Focused Textile and Apparel Manufacturing Systems: Toward an Effective E-Commerce Model

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Customer Focused Textile and Apparel Manufacturing Systems: Toward an Effective E-Commerce Model Volume 4, Issue 4, Summer2005 CUSTOMER FOCUSED TEXTILE AND APPAREL MANUFACTURING SYSTEMS: TOWARD AN EFFECTIVE E-COMMERCE MODEL JiHyun Bae, Ph.D. Student Traci May-Plumlee, Assistant Professor NCSU, Textile and Apparel, Technology and Management 2401 Research Drive, Box 8301 Raleigh, NC 27695-8301 ABSTRACT Environmental changes, including intensive international competition, unpredictable consumer demand, and market trends of variety and short product life cycles, compel the U.S. textile and apparel industry to focus increasingly on the consumer as a way to meet these challenges. Quick response has established new business strategies, new relationships and new procedures to speed the flow of information and merchandise between retailers and manufacturers of apparel and textiles, all driven by the customer. With such a customer responsive system in place, the industry began expanding into mass customization. Mass customization uses information technology, flexible processes, and organizational structures to deliver a wide range of products and services that meet specific needs of individual customers but on a mass scale. This paper examines Quick Response and mass customization manufacturing strategies used in the textile and apparel industry, examines how existing technologies can support these strategies, and investigates how mass customization can be undertaken through e-commerce. Keywords: Mass customization, Manufacturing systems, E-commerce, CAD/CAM system 1. INTRODUCTION supplied in the domestic market. Considering this situation, competitiveness The rapidly changing culture, politics in cost and quality continue to be key issues and economics of modern life deeply affect for textile manufacturers. In order to the industrial environment, especially significantly reduce time and cost in the consumer industries such as textiles and supply chain, the industry needed to become clothing (Lowson, King & Hunter 1999). more focused on consumers by developing a One of the impacts is that the contemporary supply chain management process that North American and European textile and would be demand driven and production that apparel industries suffer immense would be synchronized to replenish product competition from foreign producers (Yan & at the consumer's pull rate (Lovejoy 2001). Fiorito 2002). As early as the mid-1980s, Today, consumers desire to personalize the imports were estimated to account for close style, fit and color of the clothes they buy, to 50% of consumption (Lowson, King & and require high-quality customized Hunter 1999). As most imported textiles are products at low prices with faster delivery produced with very low labor expense, huge (Lee & Chen 1999). New manufacturing amounts of inexpensive products can be technologies such as 3D body scanners, Article Designation: Scholarly 1 JTATM Volume 4, Issue 4,Summer 2005 CAD/CAM systems, and digital textile inventory time can be explained by the fact printers have played a key role in increasing that, throughout the pipeline, products are the effectiveness, flexibility, agility, and held by a supplier as finished goods, and precision of production. additional stocks are held by the customer as raw material. Thus, there are duplications of New business strategies were stockholding between various processing introduced to increase competitiveness in steps, reflecting the lack of communication the industry. One of those strategies, Quick between the supply channel segments. The Response (QR), was formulated as an stockholding cost and the time delays in the improved way of conducting business in the system cause a substantial competitive US textile /apparel pipeline by the American disadvantage in many markets. Hunter, King Apparel Manufacturers Association & Lowson (2002) showed the revenue losses (AAMA). It can be defined shortly as “a expressed as a percentage of retail sales. The comprehensive business strategy biggest item of lost associated revenue was incorporating time-based competition, forced markdown, with the total losses agility, and partnering to optimize the amounting to over 14 % of retail sales. supply system, and service to customers” Stockouts account for another 4.0% and (ITAI News 1997). QR required a drastic inventory 6.4%. To reduce unnecessary reduction in the time taken to convert fiber markdowns, one solution is compression of to fabric, fabric to garment and then to the pipeline. Pipeline compression makes it deliver the garment to the customer. Such a possible for retailers to reassess the demand reduction called for the use of a wide variety while the season is under way, make small of electronic and mechanical technologies, and frequent re-orders, and feed more the integration of manufacturing accurate information about customer wants technologies, changes in management back to the manufacturing process. The QR practices, and a higher level of trust and methodology was founded as a way to cooperation between industry segments. address the various pressures upon the This paper examines Quick Response and industry (Hunter, King & Lowson 2002). Mass Customization manufacturing strategies used in the textile and apparel 2.2 QR Strategy and advantages industry, evaluates how existing technologies can support these strategies, Traditionally, orders for products are and examines specific applications through made four, six or eight months in advance, case studies. based on forecasts in terms of volume, product mix and so on. That means the 2. MANAGEMENT STRATEGIES – probability that these forecasts effectively Quick Response reflect the reality is very low. It is impossible to satisfy the expectations of the 2. 1 Background final customer completely with advance orders of six months or more. Therefore, it is Throughout the 1970s, the industry was necessary to keep high cost inventory. characterized by an emphasis on mass- markets and high volume manufacture of a The fundamental principle of QR is that slowly changing range of garments with low all activities within an enter prise should be design content. In the mass production paced to demand and customer behavior. system, all input and output are standardized Products and services are produced and to reduce defects, and variety of the product delivered according to the variety and is minimized (Lowson, King & Hunter volume of demand. Consequently, it is 1999). In 1984, a study conducted to analyze important to understand these demand the textile and clothing industry in the U.S., patterns. QR is a time-based competitive showed 55 weeks of inventory time within strategy which focuses on the compression the 66 weeks supply pipeline (Hunter, King of response time, and which emphasizes & Lowson 2002). This high level of collaboration between all the business Article Designation: Scholarly 2 JTATM Volume 4, Issue 4,Summer 2005 partners from the textile producer to the forecasts and pre-season orders with the final customer. actual consumer preferences as reflected in their purchases. Accurate data acquisition is The strategic advantages of the important, and analyses of PoS data must application of QR are numerous. First, the occur frequently (Hunter, King & Lowson risk caused by incorrect forecasts can be 2002). Use of POS data can help retailers reduced due to decision making closer to the and manufacturers through building more season. A substantial reduction in sales accurate item inventory and sales records, forecast error can be made by shortening the reducing or eliminating out-of-stocks design process. The fewer months ahead of through improved order planning, reducing the season that style and color predictions forced markdowns via better reorder are made, the less the forecast error (Hunter, management, reducing the need for stock King & Lowson 2002). If the product design counts, and helping assure that the right times were reduced, demand and customer goods can be provided to the customer in the preference could be predicted more right place. accurately. Second, adoption of QR makes it possible to improve the level of service by One problem with using UPC coding is satisfying the variety of customer that global standards do not comply with the expectations and preferences with maximum NRF size and color standard reference table efficiency in terms of elimination of risk, (Hunter & Valentino 1995). Data waste, and cost. A study of the advantages compatibility standards among countries of QR systems between textile producers, need to be established to create a Quick clothing manufacturing, and distribution Response environment that supports co- showed that sales increased up to 50 percent, ordinated global demand-activated and stockholding dropped between 20 and manufacturing responses (Hunter, King & 40 percent (Forza & Vinelli 1997). Lowson 2002). 2.3 Technologies to support QR Radio Frequency Identification, or RFID, is an emerging technology which can QR includes the use of bar codes on substitute for a barcode with some merchandise and shipping cartons, the use of advantages. RFID technology has microchip computer-aided design and manufacturing tags that carry data such as manufacturer ID, systems, the receiving and sharing of SKU, and an item unique code (Chandary product information, and the sending of 2005). This system can protect designer orders and other forms electronically. originals efficiently, prevent counterfeiting, monitor work-in-process, expedite 2.3.1 Bar Coding international processing, manage inventory, out-of-stocks and markdowns, conduct For a global, consumer-driven,
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