Tailormade Supply Chain in the Fashion Industry

Recent years have proven the immense importance of supply chain stability to global economy. In industries such as fashion – largely dependent on components and products from Asia – turbulence to supply chains has resulted in the deterioration of general conditions for at least one-half of all companies. Consumers came to the rescue of clothing companies: according to the authors of McKinsey’s The State of Fashion 2022 report, they flooded shops as soon as it became possible, “buying with a vengeance”. While the phenomenon itself has been identified in the US, we do know that the average Pole spends considerable sums on the purchase of clothing, shoes or accessories: up to and over 7 percent of his or her income. As a result, Statista platform analysts believe, fashion sales worldwide will reach approximately PLN 7,560 billion by year-end 2023, a substantial amount. Yet experts have emphasised that only the best will get to grab a piece of the pie, provided they are well capable of managing new market requirements.

Optimising the supply chain and arranging it to match growing customer expectations is a component one has to take care of, its impact on the profitability of fashion industry companies on the constant increase. “The fashion segment is hugely varied, making the needs of individual companies and recipient diverse. A large international company, FM Logistic is capable of offering fashion segment customers an impressive array of services, Value-Added Services (VAS) in particular. Owing to our expansive fleet and in-house warehouse platforms, we are flexible, tuning in to fluctuating customer expectations”, Krystian Koprowski, Senior Business Development Manager for FM Logistic Central Europe, explains. And what exactly are these expectations? “Since we are responsible for handling key brands on the Polish and Central European market, we know these expectations are constantly on the rise, especially in terms of timely delivery needs. The slightest delay on a single supply chain stage generates a snowball effect and further issues, which can affect a company’s financial performance as well as its image – a factor of great importance these days,” Krystian Koprowski adds.

Entrusting all or some of logistics operations to trusted partners has turned out to be a solution for avoiding such situations. A logistics operator with vast know-how and adequate infrastructure can serve as a so-called control tower, responsible for overseeing all activity and responding in advance to any potential supply chain instability.

No other industry has transformed to the extent fashion has in the wake of explosive online shopping popularity. According to fashionbiznes.pl, the 2022 purchase volume in the e-commerce fashion segment has grown by over 12 percent. Concurrently, the amount consumers were ready to spend on clothing has increased by a considerable 19 percent. According to the estimates of Admitad market intelligence agency, the fashion industry order volume grew by 27 percent year-on-year in January and February 2023. The giant market segment will require operators to introduce proper logistic solutions. Notably, the online sales supply chain extends beyond handling individual customer orders and returns, spanning the entire transportation, warehousing and VAS system, as well as the complete returns logistics mechanism. While individual customer service quality has considerable impact on a company’s image and potential income, inter-warehouse and B2B transfer efficiency affect all corporate operations. “Our multi-channel e-commerce segment services include, among other things, bespoke e-commerce Value-Added-Services: preparing and distributing pallets with parcels intended for in-shop collection. We have also designed an optimum system of full-truck return transportation from individual collection points to customer logistic centres for one of our clients, the system spanning most European countries. Just as in case of other services, we are open to designing bespoke solutions here as well”, Krystian Koprowski emphasises. It goes without saying that demand for tailormade services will be on the rise: as e-commerce grows, so does the need for competing in an increasingly difficult environment where effective supply chains will become progressively important.

Regardless of dynamic e-commerce development, we still prefer to buy clothing, shoes and accessories offline. Inter-warehouse and warehouse-retail shop logistics remain the core of the fashion supply chain. Unwilling to run into shortages and having learned from experience, fashion industry manufacturers have chosen diversification and nearshoring for their supply chains, generating more issues to be resolved at the logistic operations planning stage.

As in case of many other industries, fashion segment manufacturers will have to ultimately ponder the issue of whether to handle logistics in-house, or entrust it to a third-party operator, shifting any resources thus released to other jobs. While small-scale companies with relatively uncomplicated supply chains and stable sales volumes might consider in-house logistic solutions, corporations with multi-channel sales and expansive distribution networks will find collaborating with an experienced partner the better choice. A reliable logistics partner with a solid market position guarantees flexible supply chain handling, and swift responses to any change. A trusted operator’s know-how will often make it possible to avoid mistakes and mishaps of potential impact on the company’s bottom line. It thus makes no sense to reinvent the wheel – one should rather roll it together with a specialised logistics partner, entering higher business levels.