The fast and the furious

From pattern makers to fabric suppliers, manufacturers and retailers, constant communication with your supply chain is a must to keep up with fast fashion, as Samantha Docherty discovered.

Supply chain management (SCM) is no longer "someone else's problem".
Where once it was defined as a computer system to manage manufacturing and get finished product into the warehouse, the humble system has risen in stature to become one of the most important tools in fashion.
Dominic Beirne, director of consultancy firm Australian Fashion Partners, says designers, product developers and retailers all play their part in deciding what precisely what makes it to market.
The need to produce popular designs quickly is becoming increasingly important to stay ahead of the game. Fast fashion, a major force in the UK with stores including Zara, Topshop and H&M dominating the fashion scene, has made communication a key element of a successful business.
"When companies like Zara, that have a great SCM system, arrive in Australia I think it will shake up the way retail is operated here. A lot of Australia's main stream product development has not been that innovative. Some larger branded apparel businesses just purchase [overseas] product they feel will sell here and bring it back - there is no development. Brands like Zara will push current Australian retailers and designers to develop their capability faster," says Beirne.
"The way in which companies like Zara take the shape, colour and look direct from the catwalks and have a similar design in-store within six weeks is something Australia could be doing well because of the relationships with our manufacturers and suppliers. But at the moment I don't think it's being done efficiently and professionally enough. The key to fast fashion is to identify the product line and style that is successful before the next person - this is all due to a good relationship with manufacturers and suppliers."
Identifying itself as the largest producing Australian made fashion company, part of Cue Clothing Company's success comes from its fast paced ability to deliver up to the minute fashion styles on a weekly basis without compromising on quality. Running 48 weeks of the year, both Cue and Veronika Maine offer regular drops in their stores throughout Australia and New Zealand.
David Kesby, group general manager for Cue and Veronika Maine, says the strong 25-year working relationship with its 16 local manufacturers (that produce all its products except shirts, knits and accessories) is the main reason for its consistent deliveries.
"Our long standing relationship with our local supply chain allows our manufacturers to rectify issues quickly and allow us to work a lot closer to the market. We are never stuck with large multiples of non performing garments and can produce popular styles at a quick turnaround.
"Our costs are 30 percent higher due to manufacturing onshore, but we feel the benefits of flexibility and getting product in-store a lot quicker compensates this. It allows us to deliver small quantities in key locations to test the direction of fashion pieces. If selling well we can deliver a larger quantity within four to five weeks - this is something our competitors can't do by producing offshore. They can also lose their fashion edge because of the longer supply times that come with producing offshore. We look at the direction of fashion every week and incorporate these trends into the product styles that we want at a faster pace."
Using the company's strong brand identity to combat increased expenditure, Kesby feels Cue and Veronika Maine's customers are prepared to pay extra for quality.
"The hardest thing about fast deliveries produced onshore is the expense, but if you have a strong brand that are in demand it's easier to manage these costs. The size of our business (74 Cue and 17 Veronika Maine stand-alone stores - Cue is also sold exclusively in Myer while Veronika Maine is exclusive to David Jones) allows us to compete against the higher-margin importing fashion houses. Our customers are prepared to pay slightly higher prices due to the brand strength and the fabrics we use which are predominately imported from Europe. We offer a lot of German prints and Italian fabrics that give us a quality edge over the mass market."
Using the best quality Italian and Spanish micro fibres in its collections, one of Australia's leading swimwear companies Baku Australia ships its fabrics by sea from Europe. Paired with manufacturing offshore, the company's co-director Tamara Bykerk admits this can, on occasion, lead to delivery time problems.
"In relation to late deliveries - although not often - it does happen. Even when you are as organised as you can be, things can still be delayed beyond your control due to mill problems, fabric shortages, fabric quality problems, even terrorism. This season we had a shipment of resortwear coming out of Mumbai, but due to the recent bombings it's been delayed and we'll be unable to deliver these on time."
Stressing the importance of a great relationship with your retail customers to help in situations such as these, Bykerk says she rarely, if ever, gets any cancellations due to late delivery.
"Our retail customers are very understanding and appreciate that sometimes things do not always go to plan. They appreciate the use of European fabrics and the constant introduction of new styles and prints, which are often heavily constructed and difficult to make. They also understand the amount of stock we have to monitor, so will accept the odd late delivery. Of course the earlier we get stock into stores the quicker it sells and the earlier the re-orders start to come in, meaning better cash flow for both us and our retail customers."
Managing its frequent overseas deliveries by maintaining good stock levels with its agents and distributors offshore, Baku Australia sends its indent orders with additional estimated extra stock for re-orders. When stock levels run low re-cuts are sent over within a couple of weeks.
"We do everything in our power to ensure on-time delivery. We do put some pressure on our fabric/accessory suppliers, but overall they are very good at sticking to their quoted delivery times. Again, I think this comes down to the very good relationships we have with our suppliers," adds Bykerk.
Gordon Devin, chief executive officer for Belinda International (operating retail stores Belinda, The Corner Shop and The Frock Exchange) says the issues distributors, retailers and suppliers are facing in ensuring timely deliveries are on-going challenges for any retailer that values their relationships with their suppliers.
"It is imperative to get it right. If deliveries are not made and target times not met your purchases budget and cash flow management will be compromised by changing the sequencing and weighting of deliveries."
Expecting new deliveries throughout its ten stores every two weeks, Devin says it's harder to receive regular drops from imported labels.
"As freight costs are a major consideration we look to consolidate shipments from Europe at the end of their delivery window. It's a challenge to keep all our suppliers happy by taking their deliveries as soon as they're ready and still stagger consistent deliveries into the stores to keep our customers inspired and stores fresh. We have a very regular loyal customer base who wants to be inspired by something new every time they walk in the store."
Stating there is definitely a need for fast fashion as the market demands it. Myer director of supply chain Prakash Menon says the majority of imported items for Myer are one-off, seasonal drops.
Taking into consideration the geographic differences of Australia versus Europe, Menon feels the most difficult factor in managing imports is supplier on-time delivery.
"Late deliveries can throw out container and shipping forecasts against contracted container amounts. This can result in late departure, reduced container utilisation and increased freight costs. They key to meeting customer requirements with seasonal drops is rapid processing through the import supply chain."
A critical factor in ensuring everyone is aiming to achieve the same goal with minimal disruptions in the supply chain process, for Myer, communication is extremely important. Currently in the process of developing the company's own supply chain strategy (while phasing out Coles Myer Ltd's structure) Menon says speed to market will become more and more critical.
"It is pivotal suppliers deliver merchandise into our business in line with the dates on our purchase orders. As soon as the new product becomes available, customers expect to see it on the shelves. You can imagine the effects of loss of sales if target times are not met.
The vast majority of our [onshore] suppliers are able to offer us new styles monthly. These regular drops mean we can adjust to customer demand as it changes. The less frequent deliveries reach the stores, the less responsive we can be to customers needs and the more we have to fill up our stores reserves. We want to minimise the use of store reserve space, as it is valuable floor space."
Averaging repeat business deliveries once a week in Australia, swimwear giant Seafolly, implemented a replenishment system into its business five years ago allowing its customers to turn their stock over up to six or seven times a season. Supplying its customers in Australia within 24 hours of an order and offering a seven day delivery service anywhere in the world, Seafolly's managing director Peter Halaz says it's all about inventory management.
"With 97 percent of our deliveries [made] on time, many of our offshore customers feel our delivery service is better than some of their local suppliers."
Becoming increasingly popular in the swimwear industry the system of small 'injection' ranges ensures producers have a constant stream of new designs on offer while encouraging regular cash flow in all seasons. Delivering new drops to its retail customers almost all year round, Baku Australia's separates offering has opened the door to a higher turnover for both the manufacturer and its retailers.
"Turnover is definitely higher because of our ability to always offer new things and also back up [styles] that are selling well," says Bykerk.
"In the past, retailers would buy from us once a year and if something sold well it would just sell-out, there was no stock available for re-orders. However, the flip side is now we have to be careful of our stock holding left at the end of the season, it's a careful balance to be successful with a separates program."
Developing a highly sophisticated forecasting system that has reduced the company's left over stock by less and less each season, Halaz feels the measure of a good business is not just a productive SCM system, but how much stock is remaining at the end of the season to be discounted.
"We don't discount in Australia. At the end of the season we keep selling [remaining stock] in Europe and the northern hemisphere, by then Australia is into the new season."