Apparel market demands greater value addition

22 Jul '08

2 min read

With global market becoming more competitive, retailers have been demanding greater value from apparel manufacturers and for this the industry needs to produce more innovative goods to fulfil the aspirations of retailers and for its own survival.

Inflation and other economic failures have resulted in weakened purchasing power of the developed countries. Profit margins of the apparel industry have been shrinking continuously creating an atmosphere where only a handful and the fittest can survive.

It has been found that sourcing materials from around the world takes up more than 50 percent of the lead time of the apparel industry. Most of these materials need to be authorized by the customers before its get into the production process and as such, assembling and sales become the most important steps in the garment value chain.

Leading players in the apparel industry have opined that companies need to have a well defined strategy and a set of business objectives that are well communicated throughout the chain.

Focus on performance measurement has increased tremendously following the ongoing decentralization of organizations, implementation of self-directed work teams business processes and new measurement opportunities enabled by advanced IT and necessity to continuously improve efficiency.

Moreover, economies of scale, avoiding cascading effects in supply chains, reducing non-value-adding activities and increased volatility in the marketplace are some of the main considerations for restructuring distribution network.

Reducing variation and increasing stability in the operations, integrating business processes and supporting systems, increasing the degree of automation when performing business processes, utilizing distributors' consolidating role and analyzing transactions can also be adopted as general approaches for reducing transaction costs.