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As Fast Fashion becomes more and more important in today's business landscape
for RFA Retailers, PLM will continue to provide a stitch in time.

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  1. 1. WHITE PAPERFAST FASHION:ARE YOU READY TO LEAD"Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lionor it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelleor it will starve to death. It doesnt matter whether you are a lion or a gazelle: when the suncomes up, youd better be running.Adopted from The world is flat: Thomas Friedman
  2. 2. Contents Fashion is Fast ... Put on Your Running Shoes - 3 Fashion is different … different people - 3 Dimensions of Fashion - 4 Fast Fashion is ‘In’ - 5 Fast Fashion - an engine of growth - 5 Typical Timeline for Mass Fashion and Fast Fashion - 7 PLM – Meeting the Demands of Fast Fashion - 8 How Fashion Retailers Leverage PLM - 9 Example of Fast Fashion - ZARA’s Landscape - 10 Conclusion - 10 About the Author - 11
  3. 3. Fashion is Fast ... Put on Your Running Shoes In this era of speed, performance, glitz and glamour, people across the world are Fashion… becoming increasingly conscious of their image. Consumers like to reinvent their physical appearance frequently, experimenting all the time and also keeping pace with changing seasons and trends. Thanks to consumer demands, the fashion "Fashion is made to industry - apparel, footwear and soft products, is rapidly growing to match evolving become consumer tastes. And while the shoppers are spoiled for choice, a glut of products in the market has forced the Fashion industry to constantly innovate within the unfashionable". boundaries of cost and shrinking margins. Coco Chanel Fashion brands across the world see tremendous business opportunity in satiating consumer’s quest for newness and in meeting their demand for contemporary designs at affordable prices. Survival in this highly competitive sector however, is hard. To keep up with fast fashion, the retail industry needs to be agile, thinking on its feet, sensitive to changing customer needs, constantly monitoring customer buying behaviour and delivering high quality products. At the back end, the industry needs to have a highly integrated supply chain that ensures customers get what they want, when they want it. Fashion is the imitation of a given example and Fashion is different … satisfies the demand for social adaptation. . . . to different people The more an article To understand what fashion means to different people let us classify Fashion on the becomes subject to rapid dimensions of trendiness, mass appeal and Price: changes of fashion, the Mass Fashion - references to anything that is the current trend in look and dress; it is priced as per its aspiration value for the mass customers. greater the demand for Fad - Products become a trend quickly or products trend in quickly. For a fad, cheap products of its products are available at very low prices to justify the short lifecycle. Fads may be kind. related to certain events as in sports or music. High Fashion - is described as fashion which is driven by individual creativity of the — Georg Simmel, brand owner. It is trend setting, exclusive, customized and unique. The price of high “Fashion” (1904) fashion products is driven by exclusivity and customization and is usually out of reach for average consumer. Fast Fashion - is fashion that emulates high fashion but is available to fashion seeking customers at a price that they are willing to pay.3
  4. 4. A fashion brand can choose to deliver any of the above type of fashion and model their business accordingly. A mass fashion brand pursues 3 - 4 seasons in a year, and plans its assortment and store inventory accordingly. However a fast fashion brand plans its assortment as multiple sub-seasons within a year with relatively small inventory in each cycle. Retailers like GAP Liz Claiborne fall in the mass fashion , category while companies like ZARA, H&M and Benetton spearhead the fast fashion brigade. Retailers who follow the fast fashion model have their task distinctly outlined, that is, to optimise time from concept inception to “in store” delivery while keeping a check on the price tag. Dimensions of Fashion To get a clearer understanding of the various types of fashions, their life-cycle and how they are placed in the market, let us look at a graphic representation of various types of fashion, on the dimension of velocity and price. The graph also depicts the categorization of fashion providers: PRICE FASHION HIGH FASHION VELOCITY VELOCITY FAST FASHION FAD PRICE4
  5. 5. Characteristics of Fast Fashion is ‘In’ Fast Fashion In this fashion conscious world, customers always want to be trendy and access the new ‘in’ thing as fast and rapidly as possible. This makes fast fashion highly l Shorter inspiration cycle demanding both on price and delivery. l Parallel processes A few characteristics of fast fashion are:. l Strict timelines Fast Fashion is real-time l Consultative decision Right from change of seasons to change in concepts, silhouettes and colours, making everything about fast fashion is constantly in a state of flux. Fast fashion brands copy the creativity, uniqueness and exclusivity of high fashion styles, and make it available l Flexible design decisions to their customers with speed. l Large number of people Fast Fashion is access to high end fashion at lower prices working on same style The Customers of high fashion brand are celebrities or High Net worth Individuals simultaneously who are constantly being followed by fashion hungry population eager to imitate their lifestyle. This is one of the main driving forces behind fast fashion brands. The l High logistics costs objective of fast fashion is to provide customers with the same styles that their role models are wearing, quickly and at prices that do not burn whole in their pocket. l 2-4 week allocation planning for In store Fast Fashion is manufacturing it quick and cheap merchandise Quick and cheap manufacturing is the most challenging part of fast fashion. Fast Fashion works on smaller margins and to ensure negligible built up of inefficiencies in l Product development the system requires operations to be extremely well planned and coordinated, based on dynamic sales Fast Fashion styles are introduced with a short lifecycle data Fast fashion styles have a short shelf life. Acceptability of a new style launched in the market is high only when an old style shrinks and fades away. Hence brands aim to keep product volumes low and velocity high. Fast Fashion is characterized by rapid inventory turns Fast fashion is akin to the concept of fast food, as quick turnaround time is the key to obliterating obsolescence. Fast fashion essentially entails quick turnaround of styles, with shorter lead-times, swifter product development cycles and short shelf lives due to thinner inventory. Fast Fashion - an engine of growth In order to compare the Growth Rate for three different Fashion business models we studied the last five year’s Revenue and Operational Profits of three brands Burberry, Guess and Zara operating in High Fashion, Mass Fashion and Fast Fashion Business Formats respectively.5
  6. 6. Revenue (Million Dollars) 12000.00 10000.00 8000.00 REVENUE 6000.00 4000.00 2000.00 0.00 2006 2007 2008 2009 2010 Burberry 1307.68 1657.50 1970.10 1730.88 2416.61 Guess 1185.18 1252.66 1749.92 2093.39 2128.47 Zara 6422.40 8080.56 10031.28 9200.10 11242.32 Operating Profit (Million Dollars) OPERATING PROFIT 2500.00 2000.00 1500.00 1000.00 500.00 0.00 2006 2007 2008 2009 2010 Burberry 291.46 360.95 408.28 260.35 484.77 Guess 193.02 205.52 309.14 328.79 358.82 Zara 1056.00 1439.64 1568.49 1436.50 2132.26 From the trend Line it is clear that growth in terms of both Revenue and operating profit is flatter in Burberry and Guess as compared to Zara which has higher growth rate trend. Combining this fact with the much higher numbers depicting greater market acceptance for Zara Fast Fashion is certainly a business trend that will continue to generate interest from everyone and anyone in the fashion business.6
  7. 7. Typical Timelines for Mass Fashion and Fast Fashion The growth for Fast Fashion businesses does not come just from superior conceptualization of styles and emulating the high fashion trend as quick as possible. Everything about Fast Fashion requires greater collaboration and superior execution. The timeline which is just a quarter for that of a mass fashion brand certainly puts a lot of pressure on the people and processes in the Fast Fashion Organization. Mass Fashion Milestones Time taken Cumulative Time Fashion Weeks o o Trend Research 15 15 Initial techpack 10 25 RFQ 7 32 Development Sample 7 39 Selection 7 46 Revised techpack 7 53 Salesman Sample Along with cost sheet 45 98 Finalization meet 15 113 Style Freeze 5 118 Final techpack 5 123 PP sample 60 183 Fast Fashion - Source: Fast Fashion Merchant Milestones Time taken Cumulative Time Milestones o 0 Ramp Show 5 5 mood borard / Color Palatte 7 12 Material selection 5 17 Presentation sample 5 22 Finalisation 5 27 Cost Sheet finalisation 7 34 Fit Sample 7 41 PP sample 0 41 The fact that the goal of speedy design and delivery has to be accomplished keeping the costs in control makes the task of Fast Fashion retailing even more challenging.7
  8. 8. Complexity in Fast Fashion - ZARAs Landscape As visibility into the Presence in 77 36000 designs in 2-6 times delivery global supply chain 1337 Suppliers countries a year per week becomes key to Delivery time from success, apparel Over 1000 Designers and Product Centralised is 24 to 48 hours Every shipment to store contains new distribution across Europe, companies are Developement staff America and Asia styles adopting PLM application to reduce cycle time. PLM – Meeting the Demands of Fast Fashion As the cycle time of fast fashion decreases, brands are faced with the unique challenge of delivering not just one product but a product line in a timely, trend-right manner. It is here that product lifecycle management (PLM) applications play a critical role by providing a platform for customized business processes which is in sync with Benefits of PLM to people. PLM also allows the global supply chain to deliver the right product at the right time at most optimal cost. Fast Fashion In a manual process, a retailer or brand needing to get their products faster to stores, hosts a single design and production centre which handles the entire product l Faster Development Lead development for the brand. The physical proximity of designers, production planners Time through and market specialists creates a collaborative environment which helps in seamless Collaboration. flow of information and quicker feedback. l Better Costs through PLM systems tend to mime this environment and create a medium for flow of information by reducing bottlenecks typical to conventional methods of higher Visibility communication. Teams working in geographically dispersed locations can exchange l Quicker turnaround of complex pieces of information in a series of well structured steps through the PLM system. styles through easier retrieval of historical data Designer/Product Designer/PD/ Roles Designer Designer/PD/Supplier PD/Supplier and replication. developement Supplier Design Inspiration Line Planning Material Developement Sample Request Sample Approval l Real time access to libraries of colours, Manual process materials and suppliers. PLM Process Day “0” Day “N”8
  9. 9. How Fashion Retailers Leverage PLM A brilliant replacement to manual processes, PLM solutions not only accelerate an organization’s product development cycle but also remove inherent inefficiencies of a manual product development process. In the fast fashion industry, PLM solutions play the following significant roles: Innovation: PLM allows designers to spend more time on creative and innovative thinking rather than struggling with data and communication. Designers are therefore, able to improve quality and quantity of designs they churn out. Changes can be mapped and tracked back allowing designers to provide more value to downstream processes. Transparency: A “single version of truth” ensures that processes move faster on the PLM system while avoiding the back and forth mechanism of a conventional communication and data sharing system. Having a web based system enables process owners to store, retrieve and manipulate data in real time, with seamless integration between various functions within the organization. Complexity Management: Through PLM solutions, an organization can manage complex processes like storing fabric and raw material information in a simple and effective manner. With few clicks of the mouse, information pertaining to fabrics/silhouette/themes used in the past can be retrieved and used for analyzing trends and forecasting. Sample Management: PLM brings organizations and their vendors to a single, shared platform enabling them to collaborate easily on Request for Quotes (RFQs), samples and timelines. Users can track various stages of sample development as in quality or design and offer accurate information on cost and time negotiations. Resource realignment: PLM tools enhance the efficiency of production center’s resources to actually allow the movement of product from the home country to offshore, thus significantly reducing costs. PLM tools also enable joint development of strategies with vendors. Cost reduction: PLM tools break the silos between product teams and vendors, presenting an opportunity for aggregation of materials across product lines. This provides better leverage during negotiation with suppliers and manufacturers. Innovation Shorter Lead Transperancy Times RIGHT PRODUCT + Quick AT THE PLM Response RIGHT TIME + Complexity AT THE Management Strategic RIGHT PLACE Planning Sample Management9
  10. 10. Conclusion As competition increases and fast fashion becomes faster, brands have to contend with lower margins and faster delivery cycles. PLM is an ideal tool for such a dynamic scenario. The advantage of PLM is that it is not just a set of solutions but also an up-to- the-minute practice that enables fashion companies to bring together the often thought to be irreconcilable goals of exceeding expectations of the customer and beating competition in the market place. PLM adds value throughout the lifecycle of a product, starting from conception and planning of a season to the time a product is delivered to the customer. By decreasing complexities and increasing efficiencies within a system, PLM helps in reducing lead time of a product, while making product development cost-efficient and the product superior in quality. As Fast Fashion becomes more and more important in todays business landscape for RFA Retailers, PLM will continue to provide a stitch in time.10
  11. 11. About the Author Rajnish Kumar Global Practice Leader – Retail Consulting, Soft Goods An MBA in International Business Rajnish has an experience of 14 years in Manufacturing, Sourcing & Retailing; He has worked with Wal-Mart for 5 years prior to joining ITC Limited. Currently he is responsible for leading a team of business process consultants for FLEX PLM that helps organizations in their product development initiatives. His global team works directly with the Customers in Retail, Footwear and Apparel Industry to map their current processes and offer future state solutions that drive business strategy goals.11
  12. 12. ITC INFOTECH ITC Infotech, a fully owned subsidiary of ITC Ltd., is one of the fastest growing India-based global IT and IT-enabled services companies. Based out of a picturesque 35 acre campus in the heart of Bangalore city, ITC Infotech, through wholly owned subsidiaries in the UK and USA, provides outsourced IT services and solutions to leading global customers. ITC Infotech offers IT services and solutions across key industry verticals: Banking, Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Travel, Hospitality, Transportation & Logistics and Media & Entertainment. l Forrester Research recognizes ITC Infotech amongst India’s leading Infrastructure Services, CRM and SAP players l Gartner and AMR Research acknowledges ITC Infotech as one of the world’s leading offshore Testing services providers l ARC has featured ITC Infotech amongst major Indian global service providers for PLM implementation and engineering servicesTo contact our subject matter experts, please write to: Global Locations North America: New Jersey, New York, San Jose, Houston, Troy, Bentonville EMEA: Milton Keynes, Copenhagen, Prague, Johannesburg Asia Pac: Kolkata, Bangalore, Victoria, Singapore