The future worth of a clothing business is closely tied to the supply chain structure that the company chooses to establish in order to give greater assistance to its customers. In the garment industry, there are three fundamental supply chain models. Each of these is meant to appeal to a certain area of the business world. Effective supply chain management, which reacts swiftly to market demand while maintaining appropriate inventory levels, outperforms efficient supply chain management. This reduces inventory but does not adapt quickly to consumer needs.
Rather than continuing to work inside a vertically integrated composite system. A number of global garment and fabric manufacturers have shifted to a horizontally aligned design. Businesses are increasingly migrating away from the traditional vertical structure and toward a more flexible and horizontal structure. In order to better react to the market’s ever-changing needs. This is being done to better satisfy the demands of the clients. As a consequence of recent advances in productivity and machinery costs, it is becoming more difficult to underutilize the whole range of industrial equipment housed under one roof, including spinning machines and processing equipment.
Because of the high borrowing rates and other expenses involved with acquiring and integrating new firms, management has a strong financial incentive to maintain the company small and horizontally aligned at all times. This is due to the fact that these expenses are related to the acquisition and integration of new enterprises.
As the degree of industry competitiveness rises, businesses in the clothing sector are under increasing pressure to improve their supply chain management in order to keep up with the rising demand for their goods. Effective supply chain management has provided a unified solution to this challenge, bridging the gap that previously existed between various departments and organizations.
An overview of the clothing industry’s distribution network
According to the Global Supply Chain Forum, “supply chain” refers to the process of coordinating the transfer of goods and services from one place, point A, to another, point B. Supply chain management, abbreviated as SCM, is the practice of coordinating the production, distribution, and consumption of products, services, and related information from the point of origin all the way to the final client.
Increased Supply Chain Pressure
A push-oriented supply chain might meet the continuous demand for standardized commodities. Manufacturing and distribution decisions may be made in a supply chain with constant demand while keeping an eye on the future. The push supply chain was used in the apparel industry between 1950 and 1970. During this time period, firms were focused on manufacturing amid an atmosphere of excess demand for mass-produced commodities. These companies likewise featured vertical organizational structures and optimized operations focused on functions.
Certain current clothing manufacturers choose a supply chain driven by pull rather than the older, more traditional push-oriented strategy utilized by the bulk of the business. Arvind Mills Ltd., one of the world’s largest denim makers, employs a push model in its supply chain. In general, Arvind produces many different varieties of denim each month according to the monthly forecast in order to adequately satisfy a number of distribution centers. Among these distribution centers are: Because Arvind Mills distributes its items (sorts) to distribution centers, sales are really continuous. When the older kinds are sold out, they are replaced by new sorts. The push strategy may be highly useful in a production process known as make-to-stock.
Because of the bullwhip effect, the push supply chain generates additional buffer and safety stock at each node. The bullwhip effect is responsible for this. This is because makers of fibers, yarns, fabrics and finished items lack precise information on real client demand. A bullwhip effect is defined as a sudden and large change in demand at the beginning of a supply chain. Because not all producers in the garment supply chain have complete visibility into actual demand. They are all striving to plan for the possibility that demand would change. Each component of the supply chain superimposes its own assumptions on the demand given by the organization next to it. Causing demand variability to continuously rise as one proceeds upstream in the supply chain.
Between 1970 and 1990, pull supply chains were responsible for the gradual reorientation of the apparel business toward the market. Demand from huge retailers such as Wal-Mart and K-Mart is becoming more volatile. Making it harder for clothing manufacturers to retain their competitive advantage in the face of rising costs. Every stage of the supply chain leads to the amassing of massive inventories due to precise estimates of future production. The bullwhip effect has just one impact: it increases the overall quantity of stock.
To be successful in this competitive market, firms must modify their production and distribution processes along a pull-oriented supply chain in order to meet genuine customer demand. As a result, the business is able to reduce unnecessary buffer stock and improve overall service quality by customizing it to the needs of its clients rather than those of the company itself.
The pull model is the cornerstone of Raymond Ltd.’s supply chain, which is a well-known Indian garment firm. Raymond’s products are distributed to end consumers via a dealer network rather than directly from the manufacturer. Raymond’s supply chain is a complex network of vertically related businesses. Each of those businesses only creates a product when a customer expressly wants it.
The following are examples of supply chains that employ push and pull methods
As a consequence of increased national and international competition, garment manufacturers all over the world were driven to adopt horizontal alignment and leaner structures in the 1990s. This was done to better satisfy dynamic demand in an environment when capacity was abundant. The market has shifted away from mass-produced goods and toward customized items. Large retailers like Wal-Mart and K-Mart have enormous power over the distribution chain.
As previously said, organizations have been forced to adopt a new supply chain strategy. That makes use of the best of both Push and Pull supply chains, as well as the changing global economic situation. This is due to the constraints of Push and Pull supply chains, as well as the shifting global economic situation. As a consequence, the Push-Pull supply chain contains elements of all of the preceding models.
Another term for this kind of supply chain is a push-pull supply chain concept, often known as a synchronous supply chain. The Push strategy is utilized in the early stages of the supply chain. Whereas the Pull methodology is employed in the latter stages. The push-pull border denotes the boundary between phases that are based on push and phases that are based on the pull.
While inventory reduction is the aim of supply chain efficiency, customer satisfaction is the focus of supply chain responsiveness. These two supply chain management traits often clash in an unpredictably volatile market driven by shifting client moods. The previously existing discrepancy between supply networks that were both efficient and responsive. This has been overcome owing to the creation of new supply chain configurations that handle inventory and serviceability problems. Taking into account relevant factors such as market demand, infrastructure, and others, clothing manufacturers. This may effectively handle these challenges and maximize their value offer by choosing the best supply chain for their company.