Li & Fung Says Apparel is Spinning in Circles Rather Than Springing Forward
Speed, innovation and digitalization have been the three key words driving change at Li & Fung—and similarly, much of the apparel industry—but too many in the sector aren’t as ready as they should be to leave traditional models behind, despite the headwinds that should be forcing their hands.
n recent years, brands and retailers have been up against an accelerating shift to online shopping, demand for more SKUs and smaller orders, squeezed margins, rising costs and a push for data most still don’t know what to do with. And in recent weeks, fickle trade policy and the resultant tariffs between the U.S. and China have only added to all of that pressure.
The answer to driving growth in the face of those factors, according to Li & Fung president of supply chain solutions Sean Coxall, centers, really, on speed.
“At Li & Fung we are obsessed about speed,” Coxall said during a keynote at Sourcing Summit: Hong Kong last week. The 113-year-old supply chain solutions company has course corrected over the last several years, resetting as its aim, the goal of creating the supply chain of the future. The problem, however, despite all the talk of speed, the shortening of the product development cycle hasn’t really happened for the most part. “I myself have been in the industry for…30 years, and in some cases, we’re still doing things the same as when I started.”
If you look at the average wholesale calendar, Coxall said, it’s about 40 weeks.
“And if you look at how we spend that time, we spend the first 17 weeks on product development, we spend the next 13 weeks actually doing the fitting and approvals, and actually spend only about 10 weeks of that time making the garments,” he said. “It’s far too long and we have to dramatically reduce that.”
In an effort to shrink that wholesale calendar to a timeline that’s curtailed and more in line with the demands of today’s consumer, Li & Fung has turned largely to 3-D design and fitting, helping its customers halve the development time, and in some cases, go even further than that.
What’s possible with the right digital tools, Coxall pointed out, is doing design and development in eight weeks instead of 17, fitting and approvals in six weeks instead of 13, and spending seven weeks on production and logistics, bringing the whole development cycle down to 21 weeks from 40 and saving as much as 48 percent on costs in the process.
To do it, it takes 3-D digital design, which can mock up initial samples in a matter of minutes, simulate movement and fit to make quick fixes, create hangtags without a photoshoot, workup virtual runways and stores to visualize product both on a potential consumer or in a store, and even wind up online, where companies can crowd source ideas or have shoppers weigh in on a product before cutting into any fabric. And it works well for accessories, too.
“We’re now designing whole lines of socks, belts, caps and hats without seeing a single sample,” Coxall explained.
That’s the pivotal difference between the way apparel product was created 30 years ago versus today, but as Coxall noted, too many companies are still stuck spinning their wheels in the world of “before.”
“We tend to go through a cycle and then we go ‘round and ‘round in circles. For those of you that attend fit sessions and you listen to the comments, most of what you’re hearing is people changing their mind, and we waste a lot of time,” Coxall said. “Now, with the new technology, we move through that process much faster, saving days and months in a lot of cases.”
What’s more, if the uptake of digital design technology can reach critical mass and demand, companies like Li & Fung will be able to create new value add services and further reduce lead times.
“In the future, we’ll actually be able to create dynamic costing using all of the data,” Coxall explained. “We have a new digital capacity management tool to manage the capacity throughout our vendor base, and then obviously that flows into production, quality, and through to shipment.”
While all of that sounds like positive change for an industry that needs it, the shift has been slow going.
“When we started on this journey, we thought it was going to happen very quickly, but what we realized is a lot of our customers are not ready. The biggest block is the mindset,” Coxall said.
Most of the technology Li & Fung uses is available industry-wide in one form or the next, but those companies still struggling to change haven’t embraced it in a big enough way, and it’s costing them the speed today’s supply chains demand.
“We try to take every minute out of production time, but if you look at the development process, it’s quite archaic, so it’s really getting people to change their mindset,” Coxall said. “Keep trying things. Experiment until you can find a way to be successful.”