Digitization and Automation Are the Future of Fashion Manufacturing
Today’s digital age is pivoting fashion sourcing away from low-cost labor countries to a technology dominated system that is significantly more costly.
By Kelsi Kobata
Old fashion sourcing involved moving from country to country in search of cheap labor.
Sourcing is transitioning into digitisation and automation to meet the instant gratification needs of today’s consumers.
231 million jobs are at risk with the implementation of new software, digital systems and robots.
The payoff of this new sourcing system promises factories relocating closer to home markets, sustainability through reducing transport costs and emissions, shorter lead time and shifting the focus from buyer to consumer.
Sourcing—the process of finding suppliers of goods or services—in the fashion industry has traditionally revolved around low-cost labor, which is why manufacturing has moved away from home markets to countries like Eastern Europe, Southeast Asia, and Africa.
There have been growing demands for more flexibility, increased productivity, and shorter lead time (the total time to manufacture an item from order preparation time to delivery), and the only way to keep up with those heightened standards is through the implementation of digitization and automation.
Digitisation allows information to be organized and stored digitally, which streamlines cost analysis by producing digital renderings of products as an alternative to expensive prototypes. It also increases the speed at which this process occurs.
Autonomation uses robots, that typically replace human workers in manufacturing facilities. These robots work in double the amount of time of human employees and allow factories to relocate closer to their main markets, essentially changing the original fashion sourcing model.
The number of potential sourcing countries is dwindling, and transactional relationships between companies and vendors are becoming limited. Consumers have become digital users in which they prioritize instant gratification and customization over cost. As consumers and circumstances change, so must the companies.
Digital sourcing will work in China’s favor by allowing them to streamline their costs, and automation will strengthen their workforce. Edward Hertzman, the founder of The Sourcing Journal, predicts that factories in China will begin hiring less manual workers and higher paid technicians. Hertzman believes that such a change will improve the overall lifestyle in China, saying: “They want seamstresses to one day become technicians, and this will create a lot of jobs in the engineering space.”
Wilkie Wong, managing director of global sourcing for the Esquel Group, also agrees that labor conditions will be improved from this shift. Engineers, technicians, analysts, and data scientists will be needed in the factories which will help businesses grow, thus creating more jobs. The workforce will focus more on honing their skills and training.
It is difficult to predict when this digital sourcing revolution will reach a tipping point, but 60 percent of chief purchasing officers in the apparel industry believe automation will dominate sourcing decisions before 2025, although their opinions on the subject of digitization and automation vary.
Some believe that digitization is much more appealing than automation because it tailors to the increasing population of digital users and is cheaper than building robots. It is the gateway through which companies are able to be more transparent while allowing consumers to have the power of decision making. The consumer now decides what companies should buy, the number of units, among many others, and companies should redirect their focus on and understand their consumers.
While automation may be expensive, companies are investing in robots for efficiency and speed in the manufacturing process. Companies like Amazon and Adidas already have a head start with their robot-operated factories.
Rob Sinclair, president of Li & Fung, a supply chain solutions in Hong Kong, tells Business of Fashion: “It’s just the new superhighway. It is the new enabler and a current of electricity in our industry, but once everyone is digital, it is just a new playing field. It’s what is after digitization that is the bigger question.”