The Apparel Supply Chain Today and the Path to Successful Collaboration Anna Lin Chief Executive GS1 Hong Kong
Global Commerce Manufacturing Base Consumer Base Global Sourcing for Cheaper Product and Wider Product Range Total Export ...
A Typical Global Apparels & Textiles Supply Chain <ul><li>An interlinking system of raw materials suppliers, garment manuf...
Retailer: Fashion on Demand <ul><li>Fashion changes from month-to-month rather than season-to-season. </li></ul><ul><li>Ov...
Industry Challenges <ul><li>Continuing efforts to shortening the production cycle time. </li></ul><ul><li>Fierce competiti...
Collaborative Efforts Needed to Combat Challenges
Apparel Supply Chain Interaction <ul><ul><li>Sourcing and developing raw materials in the upstream supply chain accounts f...
Business Processes (Upstream Raw Material Sourcing & Development) Scenario 1 Scenario 2 Raw Materials Supplier Garment Man...
Operational Inefficiency <ul><li>The apparel and textiles industry continues to suffer from a tremendous lack of disciplin...
Operational Inefficiency – Survey Total number of respondents: 63 companies Minimum Maximum Average  Shortest Longest Aver...
Reasons of Inefficiency <ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts  </li></ul><ul><li>AppTex Vis...
AppTex Vision
Groundwork - AppTex Program <ul><li>GS1 HK in collaboration with a group of forward-thinking upstream apparel and textiles...
Participating Companies <ul><li>American & Efird (HK) Ltd  INVISTA (HK) Ltd </li></ul><ul><li>Avery Dennison HK B.V. Keung...
STEERING COMMITTEE   Project Manager:  GS1 Hong Kong Project Start:  2002   Chaired   by  Mr. Andrew Leung, Chairman of Te...
Specifications for Thread and Knitted Fabric
Results of AppTex <ul><li>All the participating companies agree that an industry-wide raw materials standards will ease th...
Progress of AppTex <ul><li>2002 Project granted </li></ul><ul><li>2003 Complete AppTex Industrial  Survey </li></ul><ul><l...
Collaborative Material Standards Specifications (CMSS)
CMSS <ul><li>Set up by VICS to establish raw materials/garments specifications for item identification  </li></ul><ul><li>...
Turn into Action <ul><li>Embrace CMSS/AppTex as a tool to step forward the enhancement of end-to-end global apparels/texti...
Questions? Thank You
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Cmss Roundtable Anna Lin

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Cmss Roundtable Anna Lin

  1. 1. The Apparel Supply Chain Today and the Path to Successful Collaboration Anna Lin Chief Executive GS1 Hong Kong
  2. 2. Global Commerce Manufacturing Base Consumer Base Global Sourcing for Cheaper Product and Wider Product Range Total Export from China to Foreign Countries Amounts to US$762 billion in Year 2005 (An Increase of 28.4%)
  3. 3. A Typical Global Apparels & Textiles Supply Chain <ul><li>An interlinking system of raw materials suppliers, garment manufacturers, buying/trading offices, and brand retailers. </li></ul>Raw Materials Suppliers Garment Manufacturers Agents (Buying/Trading Offices) Brand Retailers Raw Materials Sourcing Garment Sourcing D O L P M M D O L P D O L P D O L P D O L P SC Interactions D: Development O: Ordering L: Logistics P: Payment Upstream apparel Downstream apparel Asia Pacific US/Europe M: Manufacturing <ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  4. 4. Retailer: Fashion on Demand <ul><li>Fashion changes from month-to-month rather than season-to-season. </li></ul><ul><li>Over 10K new products per year for a typical brand retailer. </li></ul><ul><li>New Product Introduction (NPI) once a week. </li></ul><ul><li>3 – 5 weeks of final design to sales cycle. </li></ul><ul><li>This imposes tremendous pressure to adopt Quick Response , enhancing end-to-end supply chain efficiency, visibility and reducing total supply chain costs. </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  5. 5. Industry Challenges <ul><li>Continuing efforts to shortening the production cycle time. </li></ul><ul><li>Fierce competition from emerging manufacturers in terms of cost. </li></ul><ul><li>High flexibility, responsiveness and reliability, plus a lot of last minute changes. </li></ul><ul><li>Facing various market impacts like abolition of Quota in 2005, China’s WTO accession and globalization of market. </li></ul><ul><li>Short product life cycle and low order quantity. </li></ul><ul><li>Fragmented industry, lacking of consistent operational practices and heavily relying on manual-based operation. </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  6. 6. Collaborative Efforts Needed to Combat Challenges
  7. 7. Apparel Supply Chain Interaction <ul><ul><li>Sourcing and developing raw materials in the upstream supply chain accounts for some 70% of the time spent in the supply chain interaction. </li></ul></ul>B2B Business Processes Supporting Systems SC Interaction Cycle Time D L O P <ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>Sampling Physical Touch & Feel Raw Materials Specification Data Exchange Ordering & Order Tracking Goods Dispatching or Receiving & Payment Phone, fax or e-mail B2B & ERP systems Product Development Product Ordering, Logistics & Payment More than 70% Approximately 30%
  8. 8. Business Processes (Upstream Raw Material Sourcing & Development) Scenario 1 Scenario 2 Raw Materials Supplier Garment Manufacturer Buying Office Brand Retailer Raw Materials Supplier Garment Manufacturer Buying Office Brand Retailer Product Development Product Development Specification Requirements <ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  9. 9. Operational Inefficiency <ul><li>The apparel and textiles industry continues to suffer from a tremendous lack of discipline, standardization, and transparency, as most of the companies are still using a smorgasbord of proprietary methodology for specifying and exchanging the specification of raw materials. </li></ul><ul><li>This leads to a serious interoperability issues and operational inefficiencies and problems among the business partners along the apparel supply chain. </li></ul><ul><li>End-to-end supply chain integration is the new business paradigm that companies need to adopt in order to derive competitive advantages and to meet their new business challenges. </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  10. 10. Operational Inefficiency – Survey Total number of respondents: 63 companies Minimum Maximum Average Shortest Longest Average 7 Raw Materials At once to 3 At once to 5 At once to 3 At once to 5 1 – 4 At once to 1 At once to 1 2 – 6 3 – 6 2 – 3 3 – 7 2 – 6 2 – 6 2 – 7 No. of times in this “Back & Forth communication” (frequency) 3 to > 10 5 to > 10 5 – 8 5 – 25 5 to > 10 6 – 20 5 – 10 No. of Days to identify the right raw material specification per new order (Cycle time) 1 – 4 14 – 90 2 – 5 Yarn 1 – 4 14 – 60 2 – 7 Woven Fabric 1 – 3 7 – 10 1 – 4 Thread 1 – 8 7 – 14 1/2 – 7 Label & Tag 1 – 10 14 – 60 2 – 14 Knitted Fabric At once to 3 10 – 40 7 – 10 Interlining 1 – 7 14 – 40 2 – 5 Button
  11. 11. Reasons of Inefficiency <ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>10% Others (e.g. raw material functional performance) Average range Main reasons for “ Back & Forth communication” 20% to 40% Follow up on delivery status 30% Price negotiation 10% to 20% Changes in raw material specification 10% to 30% Inaccurate information 10% to 25% Missing information
  12. 12. AppTex Vision
  13. 13. Groundwork - AppTex Program <ul><li>GS1 HK in collaboration with a group of forward-thinking upstream apparel and textiles companies are taking charge of developing raw materials specifications standard aims at integrating upstream apparel supply chain. </li></ul><ul><li>This project was backed by 33 key players and industry bodies, accounting for some 60 percent of the local market share, with professional people to provide suggestions and comments for developing the standards of raw materials specifications of: </li></ul><ul><ul><li>Button; Interlining; Knitted & woven fabrics; Label; Thread; and Yarn. </li></ul></ul><ul><li>The raw materials standards cover: </li></ul><ul><ul><li>Classification; Product attributes; Attribute values; Unit of measure; International article identification; & Party identification. </li></ul></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  14. 14. Participating Companies <ul><li>American & Efird (HK) Ltd INVISTA (HK) Ltd </li></ul><ul><li>Avery Dennison HK B.V. Keung Hing Mfy Int’l Ltd </li></ul><ul><li>Central Fabrics Ltd Luen Thai Int’l Group Ltd </li></ul><ul><li>Central Textiles (HK) Ltd Milo’s Knitwear (Int’l) Ltd </li></ul><ul><li>Chargeurs Interlining (HK) Ltd Mou Fung Ltd </li></ul><ul><li>Coats China Pacific Textiles Ltd </li></ul><ul><li>Crystal Group Paxar Far East Ltd </li></ul><ul><li>East Sun Button int’l Ltd Peninsula Knitters Ltd </li></ul><ul><li>Esquel Group TAL Apparel Ltd </li></ul><ul><li>Fang Brothers Knitting Ltd Texful Textile Ltd </li></ul><ul><li>Fountain Set (Holdings) Ltd Top Form Int’l Ltd </li></ul><ul><li>Freuenberg & Vilene Int’l Ltd Tristate Holdings Ltd </li></ul><ul><li>GS1 Hong Kong Ltd Union Button Factory Ltd </li></ul><ul><li>Grand Gain Industrial Ltd Wing Tai Enterprieses Ltd </li></ul><ul><li>Gunzetal Ltd Xetex (HK) Ltd </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  15. 15. STEERING COMMITTEE Project Manager: GS1 Hong Kong Project Start: 2002 Chaired by Mr. Andrew Leung, Chairman of Textile Council Garment manufacturers: Top Form, Tristate Raw material suppliers: Central Textiles, Fountain Set, Freudenberg & Vilene, Gunzetal Sponsors: Esquel, Luen Thai, TAL, Wing Tai Supporting Association: Textile Council <ul><li>East Sun Button </li></ul><ul><li>Esquel </li></ul><ul><li>Keung Hing </li></ul><ul><li>Luen Thai </li></ul><ul><li>TAL </li></ul><ul><li>Tristate </li></ul><ul><li>Union Button </li></ul><ul><li>Wing Tai </li></ul><ul><li>Freudenberg & </li></ul><ul><li>Vilene </li></ul><ul><li>Luen Thai </li></ul><ul><li>TAL </li></ul><ul><li>Tristate </li></ul><ul><li>Wing Tai </li></ul>Button Interlining <ul><li>Avery Dennison </li></ul><ul><li>Esquel </li></ul><ul><li>Grand Gain </li></ul><ul><li>Luen Thai </li></ul><ul><li>Paxar </li></ul><ul><li>TAL </li></ul><ul><li>Top Form </li></ul><ul><li>Tristate </li></ul><ul><li>Wing Tai </li></ul>Label & Tag <ul><li>Esquel </li></ul><ul><li>Fountain Set </li></ul><ul><li>Luen Thai </li></ul><ul><li>Pacific Textiles </li></ul><ul><li>Top Form </li></ul>Knitted fabric <ul><li>Gunzetal </li></ul><ul><li>Luen Thai </li></ul><ul><li>TAL </li></ul><ul><li>Top Form </li></ul><ul><li>Tristate </li></ul><ul><li>Wing Tai </li></ul>Thread <ul><li>Central Textiles </li></ul><ul><li>Esquel </li></ul><ul><li>Freudenberg & </li></ul><ul><li>Vilene </li></ul><ul><li>Luen Thai </li></ul><ul><li>Mou Fung </li></ul><ul><li>TAL </li></ul><ul><li>Texful Textile </li></ul><ul><li>Top Form </li></ul><ul><li>Tristate </li></ul><ul><li>Wing Tai </li></ul><ul><li>Central Textiles </li></ul><ul><li>Crystal </li></ul><ul><li>Fang Brothers </li></ul><ul><li>Fountain Set </li></ul><ul><li>INVISTA (HK) </li></ul><ul><li>Luen Thai </li></ul><ul><li>Milo’s Knitwear </li></ul><ul><li>Pacific Textiles </li></ul><ul><li>Peninsula Knitters </li></ul><ul><li>TAL </li></ul><ul><li>Tristate </li></ul><ul><li>Wing Tai </li></ul>Yarn USER CONSULTATION GROUP: American & Efird (HK), Chargeurs Interlining (HK) Coats China and Xetex (HK), just to name a few Key Drivers from the Industry Woven fabric WORKING COMMITTEE Industry Work-Groups: Chaired by Mr. Dennis Chung, Corporate Logistics Director of Luen Thai MARKETING COMMUNICATION UNIT Chaired by Ms. Woo Yuk Lynn, Director of Central Textiles , in collaboration with Textiles Council & HKTDC TECHNICAL CONSULTING GROUP Vetting Committee: Chaired by Mr. Andrew Leung , Chairman of Textile Council Technical Work Group : Chaired by Mr. Stanford Kuo , Director of Gunzetal Vice-chaired by Mr. Ricky Tang , Regional Director, ISCR & South Asia of Freudenberg & Vilene
  16. 16. Specifications for Thread and Knitted Fabric
  17. 17. Results of AppTex <ul><li>All the participating companies agree that an industry-wide raw materials standards will ease the communication between business partners, enabling them to streamline their supply chain operations and enhance overall efficiency. </li></ul><ul><li>Alignment with brand retailer to achieve end-to-end supply chain integration is critical to the success of the AppTex project. </li></ul><ul><li>The industry expects that at least a 15-20% reduction in overall cycle time of product development can be achieved if the AppTex standards is deployed properly. </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  18. 18. Progress of AppTex <ul><li>2002 Project granted </li></ul><ul><li>2003 Complete AppTex Industrial Survey </li></ul><ul><li>2004 Launch of AppTex </li></ul><ul><li>2005 Host of Suppliers roundtable </li></ul><ul><li>2005 Specifications Refinement </li></ul><ul><li>2005 Share AppTex with VICS members </li></ul><ul><li>2007 Marketing Event with Textile </li></ul><ul><ul><ul><ul><ul><li>Handbook </li></ul></ul></ul></ul></ul><ul><li>2008 AppTex Implementation Pilot </li></ul><ul><li>2008 Co-organize CMSS Roundtable </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  19. 19. Collaborative Material Standards Specifications (CMSS)
  20. 20. CMSS <ul><li>Set up by VICS to establish raw materials/garments specifications for item identification </li></ul><ul><li>To turn industry consensus into global standards with the involvement of buyers and sellers in the Apparel and Textiles Industry.  </li></ul><ul><li>To transform unstructured data into structured data format for raw materials and product specifications presentation and to enable enterprise systems integration for Business-to-Business communication with the aids of the best-of-breed technology. </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  21. 21. Turn into Action <ul><li>Embrace CMSS/AppTex as a tool to step forward the enhancement of end-to-end global apparels/textiles supply chain </li></ul><ul><li>Leverage existing work and industry players via VICS members and GS1 HK’s apparels/textiles industry forum </li></ul><ul><li>Great opportunity to create common vision and implementation of Collaborative Commerce encompassing both Downstream and Upstream apparels/textiles supply chain </li></ul><ul><li>Apparel Supply Chain </li></ul><ul><li>Collaborative Efforts </li></ul><ul><li>AppTex Vision </li></ul><ul><li>CMSS </li></ul><ul><li>Way Forward </li></ul>
  22. 22. Questions? Thank You

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