Globalization has made the apparel and footwear industry more challenging than ever. Many companies that used to manufacture, today also design, source and distribute. There is greater competition, consumers are much more demanding and distribution channels are shrinking. Consolidation is having an impact on nearly every aspect of the marketplace. In 1980 there were 200 different department store nameplates in the United States. Today, that figure has dwindled to just 17.

The industry has become increasingly consumer and design-driven as fashion trends change overnight. Consumers demand new designs, greater choice and expect immediate availability in a wide range of colors and sizes, which has led to even shorter product lifecycles and larger numbers of SKUs for companies to manage. Global sourcing is common, supply chains are often complex and lead times long. High, on-time delivery performance is critical and the seasonal nature of many products and collections increases the risk of inventory exposure.

The defining line between retailers and suppliers has become blurred. Suppliers are moving into the retail sector, and retailers are taking greater control of the supply chain. As a result, responsibility for store-ready inventory is shifting up the supply chain.

In addition, many brand owners are opening retail stores. If the right product mix is not in the store at the right time, it results in lost sales opportunities, damage to the brand image, low sell-through rates on product lines and ticket price markdowns, which are often necessary to shift merchandise and minimize obsolescent inventory. All of these things squeeze margins.

So in order to gain a competitive advantage, the firm management of your end-to-end supply chain is essential. As a result your demand and production planning will become increasingly critical and more complex. And a wrong decision can have major ramifications.

Almost every fashion company has the opportunity to tap into and use the same source of supply as its competitors, at a similar cost, with similar quality and similar delivery terms. This can mean little differentiation in the merchandise your company sources. And for brands, design cachet is particularly at risk because of the ease and swiftness with which your signature look can be copied.

So how do you compete in the future? How can a fashion company create distinction? The answer is greater customer intimacy. This is achieved by providing a unique experience that meets the wants, needs and demands of your customers. Customer intimacy is the new mantra for differentiating your merchandise and service proposition. To compete successfully you need to understand and service your customers' needs and wishes better than ever before.

With all these challenges in mind, investing in processes and technology, in order to achieve best-in-class performance, is more important than ever. The platform to support process improvement and optimize performance is an enterprise resource planning (ERP) system. But remember, not all ERP vendors are equal, and no two ERP solutions are the same. At Lawson, we created this guide to help you make a more informed choice. It is by no means definitive, but it will highlight the key factors youll need to take into account to help you in your selection.

The fashion industry includes companies that design/source/distribute, wholesale or manufacture apparel, footwear, home textiles or accessories.

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Originally published in New Cloth Market; June 2009