Supply chain risk factors in fashion industry.

Byline: M USMAN AKHTAR

ISLAMABAD -- In past few decades, consumers' demand has made the supply chain management of fashion industry more challenging. Fashion, apparel and textile supply chains are becoming extremely complex. This industry has an unpredictable and a very short life span which needs to refresh fashion products in a timely and efficient manner.

It implies reducing lead time and associated logistical costs in order to avoid an intense reduction in prices at the end of selling season due to rapid changes in trends. Today, fashion retailer are facing different risks in maintaining their supply chains with changing trends and awareness of the fashion industry which has high volatility with items' shelf life of a few weeks before consumer switches to new design, fabric or color. A principal criticalness of fashion lies in the ability of knowing the taste of customer and then converting it into a required product.

Technology is one of the risks that fashion retailers are facing because now consumer can easily compare prices online and wants more time on internet browsing instead of visiting a shopping mall. It has stimulated the fashion retailers to optimize their supply chain activities and setting the prices and due to pressure from price side they start outsourcing from a market with low cost.

Trend assessment is another big risk of the fashion industry and these trends are mostly erratic. A successful clothing store takes advantages on the latest trends and well aware of situations when such trends are on go-down time. A single slip up may lead to excessive inventory, destroying credibleness and chaotic brand identity for the store, consequently may prove disastrous in the clothing business.

Stores may avoid stumbles by hiring experienced people, to go for reputable brands and purchase of commercialized clothing. Another possible risk is from off shoring trend; from one side it assures a significant cost advantage but from the other it contributes to lengthy lead times. This may lead to replenishment time extensions and therefore a lot of trouble in timely responding to the delays along the chain or change in the demand. There are also some legal and political factors which affect businesses in the clothing industry.

Rights of workers, child labor laws, workers union are exiting issues in clothing manufacturing plants. Workers may picket their employers and then lockouts would come up, due to unfairness in wages or other...

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