The Required Refresh for Apparel and Footwear Supply Chains

In this piece, Vikram Murthi, Vice President, Industry Strategy at o9 Solutions, and Sandeep Nargotra, Director of Solution Delivery at o9 Solutions, discuss how gaining real-time visibility across their value chains can help Apparel and Footwear companies prosper in an environment marked by disruption.

The next normal is settling in: social life and tourism are coming back, remote work is finding its post-pandemic routine and masks are mostly optional. This means that consumers are leaving their homes, sidelining their beloved pandemic sweatpants, and refreshing their wardrobes to adapt to their new lifestyle—a mix of style, comfort and value, with sustainability and community being at the forefront—allowing the global fashion industry to reach its pre-pandemic sales numbers. While the recovery is undeniable, industry experts confirm that it will be largely uneven, both from a geographic and sector standpoint. It will also be costly as global supply chain challenges remain, from stock-out to raw materials and shipping cost increases, or extended lead times at ports. To prosper in an environment marked by Volatility, Uncertainty, Complexity and Ambiguity (VUCA), Apparel and Footwear companies need to be fast-to-market. They have to be agile, flexible, and creative to cope with ever-changing consumer demand and fragile, complex supply networks. For these traditional operating businesses, the solution resides in digital transformation. By investing in next-generation platforms, such as o9 Solutions, Apparel and Footwear companies will be able to sense demand and predict consumer preference shifts, build local assortments to develop optimal product mix, and balance demand and supply to optimise costs.

A Digital Twin for Data Visibility

The digitised world we live in is a gold mine of data. From social media likes to retailers’ websites navigation preferences and internet searches, there has never been more consumer and market data available. Since the implementation of the first ERPs and other CRMs and
procurement software, companies are able to understand historical transactions by collecting sales and shipments, product and supplier, inventory, and purchasing data. The issue is not about a lack of data, the issue is that data lives in separate applications, resulting in a tremendous number of disconnected data sources and datasets. In order for companies to reach any type of consensus or cross functional collaboration, data science and operations teams have to spend a lot of time collecting the data from the different systems, cleaning and
organising it into the correct format (thank you Excel!) before starting to analyse and make sense of it. This reactive, manual process prevents companies from making decisions in a timely manner as solutions are often found after an event occurs, or in some cases, they
become aware of the issue when it’s too late.

Created in 2009, o9 solutions is a ‘digitally native’ cloud-based platforms that offers an open architecture structure; it is able to ingest and display all types of data and data sources (from the various homegrown Excel tools to social media viral trends through POS sell-out) into an
enterprise knowledge graph, (i.e. a digital model of the physical supply chain, also known as a Digital Twin) enhanced with internal and external data.

By gaining real-time visibility across their entire value chains, companies are now equipped to monitor demand and supply chain signals and proactively detect upcoming risks. This allows them to reduce the time needed to identify, react, and decide. In a world where disruptions are
the new norm, having a digital twin that identifies market and supply signals will be an incredible competitive advantage.

Improving Demand Planning

These platforms help organisations better predict demand and thus adapt to market volatility through leveraging the end-to-end value chain, internal and external drivers as well as historical, current, and future data, and applying Machine Learning algorithms. By acting as a single
source of truth, they support and enhance cross-functional collaboration. The most advanced platforms can even help companies sense, analyse, plan, and even shape demand to optimise both short-term and long-term sales as well as margin performance.

Automating Supply Planning

An accurate demand forecast is the baseline to build an efficient and resilient supply chain, but one of the main challenges is often to balance demand and supply. By leveraging the digital twin and including all constraints (resource, capacity, labour, lead time, etc.), o9 Solutions enables organisations to bridge the gap between demand and supply. Functionalities such as capacity and flow planning powered by high-performance solvers, what-if scenario planning capabilities, inventory optimisation, and supplier collaboration make supply chains more agile and cost-effective in responding to market demand.

With better demand forecasts, optimised demand/supply planning, supplier collaboration, real-time data visualisation, and problem-solving capabilities, companies optimise their process, limit waste, reduce logistics costs, therefore improving their P&L results, but more importantly
improving their use of the Earth’s resources.

By investing in next-generation platforms, powered by AI/ML, companies in the Apparel and Footwear industry will close the gap between demand and supply by getting visibility into their end-to-end supply chains and will gain greater capabilities to sense demand and predict
consumer preference shifts, while also incorporating sustainable practices that reduce environmental impacts.

To learn more about how o9 Solutions can help your company make better decisions, request a personalised demo.