By Samantha Sault, via just-style.com
Innovators are helping to create next-generation supply chains
On-demand apparel assembly, local-for-local production, manufacturer-matching and transparency mapping are among the innovative new concepts starting to shape next-generation fashion supply chains. And investors appear tuned in to their potential too, with millions of dollars in funding set to scale them up.
A spate of bankruptcy filings in recent months, from US women’s fashion chain A’Gaci to major American retailer Barneys New York in August alone, are among warning signs for the industry that traditional retail channels are no longer sure-fire ways to sell their products.
But one fast-growing technology can help brands both reach new customers and reduce cost: on-demand production.
“Moving to on-demand is a way brands can have much more influence on direct-to- consumer shopping,” as well as bring them “much closer to having a bigger profit margin and having much more control over their stock,” says Kirsty Emery-Laws, one of three co- founders of Unmade.
This rising-star London-based company offers software it claims “seamlessly integrates” into a brand’s existing supply chain – enabling them to manufacture customised knitwear and small-batch, printed team sportswear on-demand.
After a consumer customises a desired product on a brand’s website, the platform sends the tech pack directly to the brand’s existing factory. Here the garment is manufactured “at the same cost and speed as mass-produced items,” according to Unmade’s website, and delivered directly to the consumer.
“Moving to on-demand is a way brands can have much more influence on direct-to-consumer shopping” as well as bring them “much closer to having a bigger profit margin and having much more control over their stock” – Kirsty Emery-Laws, Unmade
Founded in 2014 by fashion experts and engineers, the British company has worked with around eight “large-scale brands” in the United States and Europe. This includes British cycling specialist Rapha Racing and “three of the top five US apparel brands,” according to Emery-Laws, who would not release their names – although Unmade has said it works with American brand/retailer Opening Ceremony and UK designer Christopher Raeburn.
Clearly, investors see the model as the future: Unmade raised GBP4.75m (US$5.76m) in July, led by Octopus Ventures along with MMC Ventures, Felix Capital, and existing investors, bringing Unmade’s cumulative total funding to GBP10m (US$12.1m).
Aside from helping them triage after a cataclysmic event like the bankruptcy of a major retailer, on-demand can help brands manage other challenges, ranging from reducing waste to managing inventory in the face of rapidly changing trends – because they don’t have “capital tied up in garments they have no idea if they’re going to sell or not,” as Emery-Laws puts it.
Innovators are also helping brands manage the other end of the supply chain.
With President Donald Trump set to impose extra 10% tariffs on a wide range of goods exported from China (including most apparel and footwear) from 1 September, many US importers have been mulling moving sourcing to other countries.
But it has never been easy for brands to find new suppliers who not only meet their price, speed, and quality requirements but who also are compliant with health, safety and sustainability rules and certifications.
“Often, when brands want to bring a product to market fast, everything goes out the window and they go, ‘Actually, we just need that factory at that price point’,” explains Flora Davidson, co-founder of SupplyCompass.
The UK-based cloud-hosted sourcing platform started as a manufacturer-matching platform and has evolved to “a full design-to-delivery solution” for brands looking for new, responsible or certified suppliers, fast.
“Often, when brands want to bring a product to market fast, everything goes out the window and they go, ‘Actually, we just need that factory at that price point'” – Flora Davidson, SupplyCompass
By vetting suppliers and standardising the production process, SupplyCompass is doing “robust back-work” for brands, explains Davidson, who previously consulted with Adidas and L’Oréal on consumer behaviours and launched a small UK shirt company, ‘Badger Badger,’ whose product was manufactured in India.
“You will get your product faster and you will get it without miscommunication, underpinned by sustainability,” she told just-style.
To get matched with a supplier and get a cost estimate, a brand fills out the project details on the SupplyCompass website. After committing to the order, they can upload tech packs or access designers, request samples, finalise everything from quantity to testing to packaging details, and organise delivery.
Currently, London and Mumbai-based SupplyCompass has around 50 suppliers in India and Portugal, and since launching two years ago has worked with 40 SME fashion and homeware brands primarily in the UK and Australia.
Last month it received GBP1.5m (US$1.82m) in seed funding led by Episode 1 alongside other investors in London and Mumbai. The company will focus on “driving efficiencies in the early stages of the production process” from tech pack and design development, to the point at which the brand places the order.
The next frontier?
For US importers looking to move production closer to home, New Jersey-based Suuchi Inc is an end-to-end solution helping both large, established brands as well as startups develop apparel supply chains in the United States.
The company recently launched SuuchiX, a B2B catalogue offering wholesale ‘Made in the USA’ apparel, footwear, and homeware, available for market within weeks or even days – and in April, announced US$8m in new funding from Edison Partners.
Given such innovation, is the supply chain of the future right around the corner? The kind of supply chain localisation that platforms like Suuchi Inc are creating – especially when paired with on-demand technology, driven either by customer preferences or brands responding to microtrends – may be the next frontier.
“Localisation is not turning our back on our global networks, but creating a more sustainable, circular, transparent supply chain that is catalysed by on-demand” – Lisa Morales- Hellebo, New York Fashion Tech Lab and Refashiond Ventures
“Localisation is not turning our back on our global networks, but creating a more sustainable, circular, transparent supply chain that is catalysed by on-demand – and on- demand that’s sourced locally, produced locally, and ultimately, can be circularly regenerated locally,” explains Lisa Morales-Hellebo, an entrepreneur and brand strategist who launched the New York Fashion Tech Lab and co-founded Refashiond Ventures, which funds fashion supply chain startups.
These next-gen supply chains would include “small-batch, on-demand” factories, “connected via shared data across a region” with “shared logistics and infrastructure that would connect them to shared, regional, raw materials – so raw materials become your new volume and your finished goods become one-off, on-demand.”
She says systems can create “resiliency, transparency and agility, which doesn’t exist in current paradigms that are globalised or even digitally native, vertically integrated brands.”
She adds: “You’re trying to look for ways to create shared systems that offset the risk.”
In the meantime, brands can utilise tech to heighten transparency, such as ‘Retraced,’ a Düsseldorf, Germany-based blockchain solution developed to help fashion brands gain more visibility into their supply chains, and in turn, market this transparency to consumers who increasingly want to know who makes their clothing and how.
After mapping the supply chain of a product line, Retraced gives each partner a mobile app where they receive push messages asking them to confirm each step in the chain: confirm or accept a purchase order, order raw materials, enter photos of materials before shipping with a timestamp and geotracking, confirm receipt of materials, upload work contracts etc, trickling down to the finished product.
When each partner confirms, they effectively verify the information entered by other partners, too. For example, when the factory confirms it received raw materials, it is also confirming the supplier of the raw materials shipped them.
Furthermore, if information is changed, the change is documented in the platform, and all information will be accessible by consumers via another mobile app.
Working with Oracle, retraced has onboarded the first brand, Cano, which manufactures sustainable footwear crafted by artisans in Mexico, and was co-founded by Lukas Pünder, who also co-founded Retraced. Pünder says two more brands are expected to be brought on the platform in October as pilot customers, with up to ten more in the first quarter of 2020.
He envisions a future in which consumers “make buying choices not only based on the style but also on the way the product has been manufactured.”
Moving forward on innovation
While sourcing or transparency might be improved with a click or tap, tech disruptors agree: human interaction, and building real-life relationships with the humans in your supply chain, is critical to successfully implementing innovation.
“Technology can automate some of the onboarding and collection of data” and eliminate repetitive tasks and inefficiencies like Excel spreadsheets and printed paper, says Davidson of SupplyCompass, but when it comes to vetting factories, “the visit will always be needed.”
Retraced’s Pünder agrees. “If you don’t have good connections with your supply chain partners, there’s no way you can sustainably implement those new measures,” because while technology can make your supply chain more efficient, it can also require partners to make huge changes.
“In the end, there’s always a human involved,” he continues. “And you need to get those [humans] on board in order to make sure that whatever technology or process you’re implementing is actually done well and is actually working.”
“We spent a lot of time finding the right manufacturers and suppliers who shared our mindset and were on board with our vision, and saying, ‘Look, this is going to take time, but this is where we want to go, do you want to join us on this journey?” adds Davidson.
Implementing new technology requires brands to bring along their suppliers, and sometimes bring along internal colleagues, too.
“It’s not necessarily that there’s been reticence [to technology], but there’s been a fair amount of, ‘Well, this is how it’s been done, and we’ve worked around it this long,” Davidson notes. “We’ve focused on working with brands who are early adopters of new technologies.”
“We understand that people won’t change their behaviours overnight, and there’s a gradual buy-in and transition towards working with new technologies,” she says.
Unmade likewise started with “a very few, pioneering, forward-thinking people who really understood the impact of what on-demand would bring,” says Emery-Laws. “Now, it’s becoming a much more mainstream way of thinking.”
So, what will it take for next-gen supply chains to be fully realised?
“We need to have truly disruptive leaders who are willing to invest in the hard things that require some risk and failure,” says Morales-Hellebo.
“It’s up to the innovators and the disruptors in the space to lead this industry rather than follow,” she concludes. “We’re at a point in time where digital native brands are the leaders. They’re the ones that are being sought after by the big incumbent vendors that would frankly rather partner with them than the big incumbent [brands] and digital immigrants.”