When we mention the fashion industry – who automatically springs to mind? Fast fashion vertical retailers such as H&M, ZARA or C&A? However, these industry giants are not the only ones in the market. There are many other smaller companies, such as S. Oliver or Tom Tailor trying to compete, others are also entering into niche markets in an attempt to differentiate themselves because not everyone needs such levels of product freshness.
During recent years collection cycles have been getting shorter due to increased demand, there are commonly 12 collections a year, or even more – if we consider the vertical retailers.
The Product Development Lifecycle in the Fashion Industry
But did you ever stop to think about how this complete fashion cycle works? How is it possible that you can buy the latest fashion at a reasonable price in just 6 to 8 weeks from it appearing on the runways?
This complete process is based on Information Technology and would not be possible with Excel files – so here’s where PLM comes into the fashion game! This article is written to give you a holistic understanding and visualization about the backbone of a fashion company and its product life cycle combined with the importance of the PLM system.
Getting started with the product development
The creation of the new collection reports of top selling items are pulled out of the PLM system from the previous month/season.
In addition, the product manager will provide in the so called “kick off meeting” the briefing of the new trends and themes from the latest runways.
According to the target group, the collection will be developed.
The structural set up of one department will be ideally divided by their product group.
One team consists of at least 3 people, the designer, product developer and buyer. Then the designer starts with the scribbling and sketching. For every item, a new article is generated in the PDM. This way, the data will be collected throughout the development cycle.
The product definition in the fashion industry
In the fashion industry a product will be defined by these four main attributes:
- Size Range.
- Product Group.
These key attributes broadly define the article. However, many companies add additional information to the article key to complete the product definition – such as season, gender or department.
Managing the product data through the collection’s lifecycle
Most of the product development process data is managed in the PDM system. It’s an agile design process, and the product description in the PDM gives designers, developers and buyers a common understanding of what the article looks like.
Images are usually created in a Computer Aided Design (CAD) program and published to the PDM system. This way, everyone has access to the designs, and there’s less room for confusion. The collaboration is real time, and everyone in the team can work at the same time – which helps to save time!
Based on the designs, the product developer defines the technical specification of the product. Specifying a product involves modifying the basic pattern, grading and fitting it for different sizes. Apart from the insurance of the wash care instruction, the product developer – also called the technician – is in charge of the complete sampling process: until the item is ready for production and its follow up.
Using the information in the PDM system the buyer purchases the fabric, dyes, and orders accessories like zippers, labels etc. The buyer is also involved in planning and coordinating the process – from sampling to production.
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Keeping track of the product development
There are several milestones and meetings where the collection will be reviewed. Everyone in the team – and of course, the product manager – must approve the final production. The development process and part of the buying process are managed within the PDM system. Most companies use a different system to track all of the collection financials: the Enterprise Resource Planning system (ERP).
In the fashion industry, PDM and ERP are the two main systems to manage the complete product lifecycle. There is a constant information exchange between the two: Mainly PDM is for the design and development, whereas ERP covers the planning, purchasing, inventory, sales, marketing, finance and human resources.
The buyer plans the inventory and based on the calculations – purchases the fabric (or other accessories necessary for the assembling of the product) using ERP. She/he is also in charge of ordering the fabric from the fabric mills to the final production using the tracking (SCM) and planning tool.
Two more systems are often used in the fashion industry: SCM and CRM.
Managing the supply chain through the lifecycle
SCM stands for supply chain management. It’s used to manage the flow of goods and services, the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption.
That’s how the buyer can follow up the cycle – from manufacturing to product delivery at the point of sale. This tracking system makes the workflow transparent and provides the possibility to act just in time if a delivery of the goods is delayed. The sales information will be later reported into the ERP system.
Keeping close to the customer to develop better products
CRM stands for Customer Relationship Management. CRM puts the customer at the heart, closing the product development cycle with the product feedback: giving the final customer a voice. This information is mainly collected from social media and e-commerce platforms in the fashion industry – where the customer can provide their opinion. CRM connects the product to the customer, providing feedback that’s key to planning new collections, listing up the best sellers or making complaints visible.
Closing the loop, the PLM system gives the opportunity to gather all insights of a product, to make the setup and forecast for the new collection. Once again we are at the beginning of a new product lifecycle.
In future posts, we will discuss the threats and how future technologies are shaping the fashion industry.
Stay tuned to learn more!