A closer look at how some apparel companies are reducing lead time length and volatility with supply chain planning technology
Fashion is a global industry. Producers and buyers span a network no smaller than the world map itself, and supply chain planners have to account for all constraints and interdependencies to optimize inventory levels and drive profitability.
The Global Apparel Manufacturing Market Report 2019 acknowledged that Asia Pacific was the largest region in the global apparel manufacturing market, accounting for 46% of the market in 2018. Western Europe was the second largest region, accounting for 21% of the global apparel manufacturing market. On top of fluctuations in international trade regulations and tariffs, supply chains also have to contend with varying lead times and unfamiliar workday calendars.
That’s why Vanguard has incorporated functionality like true lead time calculation and a production calendar into the Vanguard Predictive Planning platform to better support the needs of planners in the fashion and apparel industries.
True Lead Time
Lead time has a huge impact on inventory levels, customer service, and – let’s face it – the financials. Its impact is even more noticeable because it strays from expected lead time. While most organizations have a supplier’s commitment for lead time and plan based on lead time that is constant, it is far more effective to plan based on actual lead time (which varies).
No one knows better than the supply planning team of an apparel company that lead times are neither constant nor guaranteed. Teams need the ability to automatically calculate lead time variability based on historical lead time data from an Enterprise Resource Planning (ERP) system and plan based on true lead times to optimize inventory in real-world scenarios. Vanguard Predictive Planning analyzes historical lead times to give planners a more accurate picture of the time it takes to produce and ship finished goods.
Ever hear the expression, “A lack of planning on your part does not constitute an emergency on mine”? It is a warning against falling victim to circumstances where a better outcome was well within your control. Knowing your company’s product lines are mostly manufactured in another country, it makes perfect sense to look at their national workday calendars to plan for disruptions in production. For example, Chinese New Year (or the Spring Festival) creates a rippled 1-3-week effect on many supply chains that rely on Chinese labor.
Better than remembering and acknowledging these instances in your planning processes, Vanguard lets you program them into your planning system, automating lead time calculations to include days off. With the new Production Calendar, you can upload any number of schedules to your system and block off entire production days. When your planners look to source finished goods, they are given ample warning to order around the off-days and materials will be received in time.
Customer expectations have risen in recent years, particularly with clothes shopping. People expect high-quality goods at affordable prices that meet the hottest fashion trends. For companies to succeed in this consumer-driven climate, they need to look closely at ways to reduce lead time and plan for a global workforce. Vanguard Software has cultivated an intelligent, unified platform to handle the challenge.