If apparel industry supply chains of the past 20 to 25 years are represented by long, batch-process seasonal calendars, based on low-cost mass production “where we either buy too much or too little of what the customer actually wants” as Bill McRaith, chief supply chain officer at PVH Corp. puts it — then “all of this is changing.”
Or rather, has the opportunity to change, as even present macroeconomic factors like the coronavirus disrupt not just retail in at-risk regions but supply chains, in the near-term.
Going from “data lakes to data oceans” with the entry of 5G networks and quantum computing offering a lightning promise of historically unprecedented processing speeds, as well as the addition of neuro networks and AI and ML-powered technologies — McRaith sees an opportunity to “completely reinvent the ‘traditional value chain.’”
Denoted by long-lead times, fragmentation and data gaps, he brings up another point; “And, all too often, shortening the supply chain meant using air transportation, which, in a drive for sustainability, is no longer an acceptable solution.”
Seeking access to the best and brightest start-ups in Silicon Valley and beyond, last year PVH tapped into the start-up network at Plug and Play, where Kohl’s and P&G also find new solutions to pilot and bring to scale — or not.
But if it is brought to scale, it can be done quickly leveraging consumer insights. It’s part of a broader push for innovation across its operations in pursuit of the “value chain of the future.”
As designers begin to think about incorporating circular design practices, across the operations it means swapping the notion of “best practices” for “good practices,” as McRaith says the latter unlocks creativity.
Having helped coauthor the latest edition of the CEO Agenda 2020, released at the annual meeting of the World Economic Forum in Davos, Switzerland — the case for digitization and “customization at scale,” is ever-growing as a way to pivot from traditional ways to more dynamic means of operation.
“A few years ago, our businesses started to identify made-to-order, customization, personalization and co-creation as evolving trends. The question was: ‘How big will they become?’ We don’t know the answer, but we are preparing with a blueprint model for this,” he said.
The “blueprint” draws speculation from industry sources inferring that PVH may be quietly readying an “onshore” solution with the scale and speed needed to achieve such a feat.
While the company customizes products today, having completed multiple pilots with its key supply partners, keeping pace with customers is always a challenge.
“Given consumers’ growing expectation of next-day delivery, we know that part of this equation will require an “onshore” solution to meet consumer demands,” McRaith confirmed.
On driving fashion forward, last March, PVH invested $77.6 million in a new distribution center in Palmetto, Ga., creating 575 jobs. The company also already operates another distribution center nearby. Neighbors with on-demand expertise include e-commerce giant Amazon and Lectra.
Just this December, the Atlanta Lectra facility flexed its made-to-order prowess, partnering with Japanese furniture company Karimoku.
When WWD asked if the new investments in the Greater Atlanta region and neighboring Lectra were signal to a new advanced manufacturing capability rollout, McRaith steered the conversation more broadly, citing CES in Las Vegas, startups in China or Israel as all kinds of sources for inspiration.
“During that work, we will have engaged with Lectra and many other, large and small, advanced manufacturing equipment suppliers. The new DC isn’t directly related to this, but it generally supports all design-to-delivery initiatives,” McRaith said.
As McRaith supposes, an industry with a meaningful opportunity of a “reset” won’t be prohibited by a lack of tools or supplier capability. “It will be our industry’s willingness to change and exhibit partnership, reaching across departments, businesses and hierarchies.”
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