A Different Path to Agility
By Hannah Kain, ALOM President and CEO
Lettuce has traditionally been the poster child for the need for velocity and agility in the supply chain. Food and certain pharmaceuticals require velocity – or they spoil. However, recently many other industries have joined the quest for faster and more nimble supply chains, among them the fashion industry.
Brands like Prada and Vuitton have traditionally outsourced large parts of the manufacturing and supply chain operations. But with a narrower band of true premium priced shelf time for fashion designs, some of the brands are buying up suppliers and making hard investments in the supply chain. The old success parameters for outsourcing are no longer aligned to market needs, and it is astute to align the supply chain around market driven success criteria.
However, as these fashion brands pivot towards running factories – definitely outside their core competencies – one has to question whether this new mitigation strategy is the best path. Imagine the brand related disasters if there are any incidents that call into question their corporate social responsibility. One thing is to manage suppliers, but it is completely different exposure to employ factory workers and be in charge of plant environments.
Astute supply chain professionals look to plan their supply chains by selecting suppliers with core competencies that are aligned with market success criteria. For the fashion brands, that may mean to realign existing suppliers or add new suppliers that understand that agility is paramount.
While not working with the fashion industry, ALOM has for decades considered agility one of its core competitive parameters. By being flexible, fast and nimble, we provide a unique marketplace advantage for our customers. The value of agility has increased in most every industry, and we work with customers who are aligned to that view of supply chain.
For an industry where cost has been a paramount outsourcing parameter, the question is whether the supply chain organizations now are ready to consider not just landed cost, but total supply chain cost, including outdated inventory and lost opportunities. One cannot help wondering whether any such changes have been thoroughly vetted – and communicated and fully understood internally and externally.
As the fashion industry looks to mitigate one problem, their supply chain organizations may have created another challenge, reminding all of us that risk mitigation need to be done with careful oversight. Prada may well realize that the Devil may wear its clothes, yet the devil is also in the details.