“The report, “Top Technology Trends in the Apparel Market: The Third Annual Apparel Research Study and Analysis,” seems to show IT growth at first glance, reporting an industrywide increase of 1.7 percent from 2008 to 2009. ..But the report, based on a survey of 175 responses from businesses in the apparel industry, goes on to cite a “softening” of IT spending in the industry. According to the report, 14 percent of respondents said they planned to spend less on IT in 2009 than they did in 2008, and 37 percent said their companies had “stopped, reconsidered or delayed previously approved IT projects.” ..The report indicates the sagging world economy may be partly to blame, but according to David Aquino, a research director at AMR and one of the report’s principal authors, the lack of IT spending is most notable in core ERP systems, plus systems that would help connect global operations or establish and/or maintain the end-to-end supply chain. ..This is a clear signal, he said, that the apparel industry still hasn’t come to respect the value of a well-run supply chain. Some firms, such as Nike and Zara, he said, stand out as exceptions, but by and large, apparel manufacturers are overwhelmingly interested in product design and branding. ..“I think everybody else winds up being subservient,” he said. ..That includes even basic supply chain management processes and functions. Often, he said, apparel companies, rather than adopting a unified, holistic approach to the supply chain, spend time plugging holes here and there with short-term, one-shot fixes that lead to a scattershot supply chain, at best. ..Aquino said this is problematic in the best of times, but with the recession crushing markets worldwide, the current supply chain model that most apparel manufacturers use is outdated and inflexible, and could ultimately lead to disaster. ..Right now, he said, companies open stores without any real anticipation as to what sort of technical requirements are necessary, both from inventory tracking to risk management. Ideas like these are fundamental to most experienced supply chain managers, but the apparel industry has so little focus on these concepts that Aquino said the apparel companies look to implanting them like “cracking the atom.” ..And that’s just on the store level. When dealing with suppliers, Aquino said, the industry faces an even bigger problem. The lack of focus on the supply chain leads apparel companies to knee-jerk outsource to the cheapest suppliers they can find. There is little real follow-up communication or collaboration with the suppliers. This hands-off approach is very dangerous, Aquino said, especially with the very real threat of the economy forcing those suppliers out of business. ..That’s just not a great long-term strategy,” he said. ..For those in the industry who want to avoid these pitfalls, Aquino suggested establishing or reviewing the entire end-to-end supply chain, including every step along the way. ..“You have to understand those elements, and where the interconnected processes are,” he said. ..Above all else, he said, most apparel companies need to wake up to the idea that there is more to their businesses than product development. ..“It shouldn’t be design to the detriment of everything else,” he said..
Date:5/13/2009
Source:Supply Chain Management Review