Monday, November 25, 2019
Coming of Age with the Internet
COMING OF AGE WITH THE INTERNET
As a student of history I’ve often wondered if people that were alive
during the transition between one cultural/economic age and the next
realized they were witnessing a critical evolution in the human
experience. Did Johannes Gutenberg realize that even though he would be
given the credit for the first use of movable type (a technology that
had been developed years before). His marketing choice to print the
Bible encouraged church to sponsor widespread literacy that ultimately
led to individual property ownership and the science and technology of
the Age of Enlightenment. History can be very obscure if you happen to
be living in the middle of it. Now as we stand at the twilight of the
Industrial Age and the rising Information Age, can we use our historical
experience to choose the smoothest transition.Wednesday, October 16, 2019
Introducing the Future Factory Models of Demand Sourcing 4.0
Choosing A Digital Factory Footprint
Digital factories
have one common mission… they transform a digital virtual inventory of SKUs
into physical product. It doesn’t matter if the factory is making furniture
parts with CNC cutters or assembling cars using robots the mission is the
same. However, the concept of a
Micro-Factory as a stand alone structure is misleading at best and doomed to fail at
worst.
Integrated demand sourcing digital factories can be tasked an unlimited array of dedicated factory footprints organized for specific profit and sustainability goals. How the symphony of different technologies is integrated to efficiently complete each individual quality product and deliver it on time, at a profit, environmentally and economically sustainable is a highly complex orchestration.
Integrated demand sourcing digital factories can be tasked an unlimited array of dedicated factory footprints organized for specific profit and sustainability goals. How the symphony of different technologies is integrated to efficiently complete each individual quality product and deliver it on time, at a profit, environmentally and economically sustainable is a highly complex orchestration.
Digital apparel factories tend to fit in four different
general structures. Each of these
generic types is based on production segment of the market or the supply
chain. Each factory is specifically
tuned to support an individual business plan.
The experience gained by building each of the factory types and their
variations since 1996 has provided a wealth of lessons that are available at
AM4U.com or through direct contact with AM4U consulting at bgrier@am4u.com.
The demonstration of different factory configurations at SOURCING at MAGIC created a substantial buzz and sales for the exhibitors. Demonstrating the integration of the role of Digital Manufacturing and the impact of real time sourcing on the financial well-being and future global sustainability is a mission of SOURCING at MAGIC. Joining these factory types together with the 3D of visual design, the Augmented Reality (AR), retail/online merchandising, social marketing software and Virtual Inventory (VI) is the next step in online and retail consumer marketing.
The Direct-2-Garment (DTG) Demand Factory
This factory custom
prints, imprints and/or embroiders decoration directly on athletic and leisure finished
apparel.
It can be placed almost anywhere and provides outputs from
100 to 600 units per eight-hour shift depending on the printer output. The
thousands of small to large DTG T-shirt factories reside in garages and small
and large factories throughout the country.
Some of the key characteristics of the DTG production sites are:
- The small factories require no special power or air service, they operate at normal house power and a small commercial compressor can handle any air requirements.
- Most DTG operations do not require sewing capability because they are normally operating with blank pre-sewn garments.
- These facilities also can operate using either direct to garment printers or images applied to the garment through sublimation or transfer.
- In most states DTG operations do not require either regulatory labor permits or expenses to dispose of toxic waste chemicals or water. This is because the printers used do not require dangerous chemicals or significant post-operational cleaning or garment washouts.
Because of the high level of competition DTG providers need
to find a space in the sourcing path for local boutiques and small specialty
retailers this opportunity will come as a result of the expansion of the
product line beyond T-shirts.
As stated, these
factories are used to produce the initial stocking order for large
multi-location retail chains and brands. This technology allows sourcing
systems to become extremely lean because there is no requirement for
time-consuming prepress or multi-location transportation of product. These
factories also allow buyers to take full advantage of the digital design
systems that can provide virtual inventories with wide ranges of choice and the
ability to create multiple SKUs dedicated to various locations and
fast-changing Internet trends.
Some of the key
characteristics of the Digital Production factory sites are:
- The DP factories require special power or air service, including a minimum of 800 amp electrical service, numerous transformers and a complex compressed air delivery system.
- Most DP operations can require significant sewing capability based on their structured capacity.
- These facilities also can operate using either direct to fabric printers or images applied through sublimation.
- With the proper additional equipment DP’s are capable of permanently spot color dyeing fabric using change-on-the-fly technology without the use of any water.
- In most locations DP operations do not require either regulatory labor permits or expenses to dispose of toxic waste chemicals or water. This is because the printers and dying technology used do not require dangerous chemicals or significant post-operational cleaning or garment washouts.
Unfortunately the downside
of the adoption of digital production has been an industry that has a legendary
resistance to change. This resistance coupled with significant requirement for
capital investment and a microscopic supply of technically trained
interdisciplinary workers and management will cause this necessary change to be
roughly the equivalent pushing a brick in the mud. Currently, the lack of integration between
the digital technologies of merchandising, design, coloration, cutting and
sewing are making the seamless vertical combination of these multiple technologies
extremely difficult.
The Forecast Based High Volume Digital Production (DP) Factory
This high-volume
factory design is used primarily for Retail and Brand initial stocking orders
it included overhead sewing delivery systems, multi-ply digital cutting and
high volume printing. This design requires at least 400-800 amp service and compressed
air distribution and multiple transformer power supplies. These factories can output 3000- 6000 m² per
hour of fabric with no minimums or pollution.
High-volume digital production is the likely replacement for
current coloring, printing and cutting technology. DP factories are still
likely to be overseas or at least in areas with lower labor costs. This type of
factory still demands huge sewing facilities with hundreds if not thousands of
product handlers, sewers and other support individuals. Until sewing is
sufficiently automated high-volume factories are likely to remain offshore.
As stated, these
factories are used to produce the initial stocking order for large
multi-location retail chains and brands. This technology allows sourcing
systems to become extremely lean because there is no requirement for
time-consuming prepress or multi-location transportation of product. These
factories also allow buyers to take full advantage of the digital design
systems that can provide virtual inventories with wide ranges of choice and the
ability to create multiple SKUs dedicated to various locations and
fast-changing Internet trends.
Some of the key
characteristics of the Digital Production factory sites are:
- The DP factories require special power or air service, including a minimum of 800 amp electrical service, numerous transformers and a complex compressed air delivery system.
- Most DP operations can require significant sewing capability based on their structured capacity.
- These facilities also can operate using either direct to fabric printers or images applied through sublimation.
- With the proper additional equipment DP’s are capable of permanently spot color dyeing fabric using change-on-the-fly technology without the use of any water.
- In most locations DP operations do not require either regulatory labor permits or expenses to dispose of toxic waste chemicals or water. This is because the printers and dying technology used do not require dangerous chemicals or significant post-operational cleaning or garment washouts.
Unfortunately the downside
of the adoption of digital production has been an industry that has a legendary
resistance to change. This resistance coupled with significant requirement for
capital investment and a microscopic supply of technically trained
interdisciplinary workers and management will cause this necessary change to be
roughly the equivalent pushing a brick in the mud. Currently, the lack of integration between
the digital technologies of merchandising, design, coloration, cutting and
sewing are making the seamless vertical combination of these multiple technologies
extremely difficult.
The Demand Based Integrated Micro-Factory
This factory design
works directly with the point-of-sale information from retail and online
clients to replenish only what is sold or required to maintain proper shelf
stock. The Integrated Micro-Factory (IMF) represents the most significant
change in the traditional sourcing structure.
The IMF is a substitute for the projected on-hand inventory of product
in excess of the initial stocking order.
The IMF allows merchandisers/buyers to replenish in-store or online
sales as they occur rather than purchasing the entire forecast and holding
finished product awaiting sales. The
IMF’s mission is to increase product offering while removing inventory risk.
The IMF is best placed in or near the distribution center and can operate on 3
to 5 day delivery directly from consolidated POS data.
- This factory requires a minimum of 5,000 sq. ft. in a dedicated space with compressed air distribution and 400amp service. An IMF can output 300—1500 units per 8-hour shift depending on sewing capacity.
- IMF’s can operate using either direct to fabric printers or images applied through sublimation.
- With the proper additional equipment IMF’s are capable of permanently spot color dyeing fabric using change-on-the-fly technology without the use of any water.
- The IMF with the proper additional equipment is capable of full dye and print in the same pass as well as art composite placement and piece drop dying production technology.
- The IMF configuration is also the best suited for higher volume (more than 200 units per day) Purchase Activated Manufacturing (PAM) or custom one off production.
- In most locations IMF operations do not require either regulatory labor permits or expenses to dispose of toxic waste chemicals or water. This is because the coloration technology used does not require dangerous chemicals or significant post-operational cleaning or garment washouts.
The Mobile Project/Event Micro-Factory
The Mobile Micro-Factory (MMF) design is
specifically built to fit on a single truck and be installed in a 200amp
facility within 3 to 5 days. Its purpose is to provide provisional
production for license products and other apparel and accessories, which may
have a specific lifespan. It is also used to support events like concerts and
fairs. It can produce up to 1000 units per eight-hour shift depending on
configuration.
Some of the key characteristics of the MMF sites are:
- The MMF can operate from a truck, tent (with a 40kw generator) or a space with 200amp service.
- The mobile factory normally requires 3-5 days for installation and product testing.
- MMF’s are designed to convert a pre-established Virtual Inventory of multiple designs to finished product on demand.
- These facilities also can operate using either direct to fabric printers, images applied through sublimation or embroidered patches.
- In most locations IMF operations do not require either regulatory labor permits or expenses to dispose of toxic waste chemicals or water. This is because the printers and decoration technology used does not require dangerous chemicals or significant post-operational cleaning or garment washouts.
Summary
Virtual inventories, digital manufacturing and real-time
demand sourcing are here to stay. Ten
years ago 50m2 was
a top speed for printing fabric today inkjets can operate 100+ times faster and
change images and colors on the fly.
Today, we can transform a digital file into a pair of shoes. Today, a picture of the Internet can shift a
fashion trend 180° in just hours
while a style forecasts still takes months of prep and conventional
production. Today, the World Bank says
that 20% of the world’s water pollution comes from coloring and processing
textiles while the digital manufacturing technology is available to dye and
print using no w
Thursday, August 1, 2019
3D Digital Design and Demand Sourcing
Over and over we hear the mantra “ time-to-market” is the key selling point for the exciting new technology of 3-D design. Although time-to-market can be an important function of digitizing the design development pattern making and other functions of 3-D, it’s not the most important result of the adoption of this technology. The incredibly complex development that reduces a complex product including design, machinery, process and colorization to a packet of binary code that represents a product in its entirety is a fundamental building block of the information age. The real impact point of 3-D design is not its function but the form of its output. In this vision of the real future, hundreds of thousands of square feet of warehouse space and billions of dollars in inventory are reduced to tiny computer files accessed from a digital cloud through your phone, tablet or laptop. Millions of products accessible on-demand through digital manufacturing and ready for purchase when the consumer is ready to buy. Tons of waste and pollution disappear because products are produced on demand from local factories from vast virtual inventories available online or at your local store. Stores that using AR to provide the opportunity for shoppers to browse through hundreds more products than were ever available from racks and shelves. Products that are available digitally manufactured on-site or in a nearby Micro-Factory. These successful retailers no longer have to risk inventories built from long-range forecasts and rendered outdated by ethereal trends that shift with the speed of the Internet.
The Seismic Impact of Virtual Inventories
Building virtual inventories is the most important eventual output of digital 3-D design. As the companies who create this fantastic software begin to understand their overall role in the commerce of the information age they are extending their software to include both merchandising and manufacturing links. The ability of the virtual inventory to connect directly with digital manufacturing allows it to become a true infinite warehouse of products. Even more important is the demand link between virtual design and the retail and e-tail merchandising of products. Providing visual link that allows retail stores and e-tail providers to increase their selection through a highly efficient AR experience that allow the consumer to efficiently find exactly the product they want is the critical part of the extension of the 3-D digital design function. Using 3-D software as the initial point, vast inventories of products can be created through virtual design, sold through AR’s virtual sensory experiences and digitally manufactured on demand. In addition the further development of real-time digital design will allow consumers and buyers to customize product to fit their specific needs guaranteeing higher value and by extension higher profits. The digital design information handshake between virtual inventory and digital manufacturing will allow high levels of efficiency and accuracy while reducing waste and pollution in providing these custom products.
Pursuing Profit Not Just Lower Costs
In reality ” speed to sale” will always trump “speed to market” as the ultimate goal for visual design software. Creating an efficient path with intrinsic value as a path to the ultimate source of funds, the consumer, will always be a winning hand. Unfortunately, very few of the strategic planners in the visual design category are clearly pursuing the virtual inventory solution as their ultimate goal. In the end the ability to create more designs faster without linking them directly to merchandising technologies is likely to increase the risk of overproduction and possibly lower the sell-through rate at retail.
Is understandable why the software companies have focused on the process of design and development because these areas were both time-consuming and often the source of confusing or inefficient communication. Solving these problems could create a clear and quicker path through an expensive and difficult period of physical product development. Since cost savings was the focus of buyers at every level creating technology, which focused on saving time, and reducing confusion was a logical path. Now is the time for the visual software companies to begin to shift their target from just cost savings to increased measurable profits at the money generating end of the supply chain. Creating, digitizing and storing product in a form that can be easily manufactured and merchandised on demand puts virtual design software in the key role of generating profits. Capitalizing on this change in direction will put these companies in a leadership role as consumer goods commerce shifts from “supply and demand” to ”demand and supply” a paradigm which is the key to sustainability in the information age.
SOURCING at MAGIC Pioneers Integrated Purchase to Fulfillment Technology
Beginning next month SOURCING AT MAGIC will introduce brands and buyers to a new section on the floor dedicated to the evolution of technologies that create an integrated demand sourcing path from consumer merchandising through demand manufacturing and back to consumer fulfillment. This new fashion technology area will feature software and equipment dedicated to the new era of individualized high-value consumer merchandising. SOURCING AT MAGIC will continue to grow this section featuring new merchandising inventory and design technology twice year in February and August at MAGIC in Las Vegas.
Tuesday, May 14, 2019
INTEGRATED MICRO-FACTORIES, THE FORECAST GAP & DEMAND SOURCING
FINDING A HOME FOR YOUR MICRO-FACTORY
The Forecast Gap
Remarkable advances in the technology of
design and visualization have allowed apparel designers, brands and product
developers to reduce the time required to visualize and prepare a new apparel
design or decoration. However, these advances even though they are portrayed as
reducing time-to-market really only reduce time to production. Coloring/printing
the fabric, the cutting, sewing and transportation/distribution of product
still creates a huge time gap between the initial concept and the presentation
of the product for consumer sale. Decisions about color and print that occur
this far in advance represent the huge risk that a market shift will cause a
volume stocking order to go mostly unsold at retail price. Unfortunately, that
retail price is what planning and profits are often based on. This gap in time
and money is what we call the “forecast gap”. Placing an integrated micro-factory
directly in the supply chain as a replenishment source after a minimal initial
stocking order can reduce risk and in fact guarantee both profits and
appropriate product stocking. Using a micro-factory for direct point-of-sale
replenishment allows each retailer or online site in the distribution system to
match their product availability with local demand. This means that on hand
inventory can be calibrated to avoid inventory clearances but still provide
accurate product availability.
Merchandising Agility
Placing the
integrated micro-factory in position between the general production sources and
the consumer creates a level of sourcing agility that allows merchandising to
react to out of stock situations by size, gender or color and to avoid overstock
clearances by location. For the highest efficient use of the integrated
micro-factory in a replenishment role, the factory (which produces no
pollution) should be placed in or near the appropriate distribution center. It
is important to remember that the physical space taken up by the factory can be
designed to match the space that was previously taken up by the physical
inventory. As a rule of thumb, hundred thousand square foot of inventory
storage equals about 1 TB of space in the virtual inventory. It is also
important to remember that the cost of the micro-factory is probably less than
the initial stocking cost and discount losses on product in a period of less
than a year. So, if you’re going to employ and integrated micro-factory to fill
the forecast gap the sourcing paradigm for some products may have to change
from forecasting to demand sourcing.
Demand Sourcing
The key ingredients of demand sourcing are:
product profit index, risk assessment, real-time POS replenishment and
negotiating a flexible style contract. Positive real-time control of on-hand
inventory by linking it directly to the demand driven Micro-Factory is the
fundamental feature of demand sourcing. In order to construct and demand
sourcing infrastructure the selling entity whether it is retail or e-tail needs
to complete three basic pre-activation tasks.
Establish real time profit risk analysis tools
ü
Profit
velocity index (PVI): point score based on gross profit times turns per
week
ü
Profit Lifecycle track: Average selling price per unit sold vs total
units contracted plotted by week.
Establish period sales production for high-risk silhouettes
ü
Build or source an Integrated Micro-Factory that
can provide no minimum replenishment of targeted silhouettes with variable
decoration on demand.
ü
Negotiate a “Style Contract” for the on demand delivery of the total period
volume of the targeted silhouette based on SKU’s from the Virtual Inventory. Establish
a Virtual Inventory (VI)
ü
Using high definition visual design software
build a silhouette construction and decoration TekPak inventory for the choices
available in store and online for the SKU’s. (Note: 10,000 different decoration
VI SKU’s will consume less than a TB of digital storage vs over 100,000 sq. ft.
of physical SKU inventory warehouse space.)
ü
Test the selected greige fabric fit pattern
construction of the offered sizes and/or shapes of the physical production
silhouette.
ü
Install the software, communication
and transportation links to facilitate POS based product lifecycle replenishment.
Profit Velocity Index (PVI)
Profit Velocity Index
(PVI)
Two of the newest elements in creating a demand-sourcing
paradigm are the Profit Velocity Index
(PVI) and the flexible Style Contract.
The PVI is a competitive point index between products, which determines both
the replenishment level, and ultimately SKU stocking life. In merchandising
whether online or in-store the velocity of product movement is the key
ingredient in determining on-hand inventory, product lifecycle and ultimately
product profitability. The PVI is calculated by simply multiplying the concurrent
percentage of gross profit times the turns of on-hand inventory over the period
of the week. Comparing the PVI to the scores of other like product or products
in a particular size or lifestyle area will determine the risk and ultimately
the level of replenishment required to realize the highest possible profit
levels from that particular SKU. When the PVI for a particular product dips
below a predetermined minimum score the product is replaced or discontinued.
Style Contract
The flexible Style Contract
works directly with a progression of products that are driven by the
replenishment lifecycle described by the PVI. The flexible Style Contract
depends on digital coloration or printing which allows the integrated
micro-factory to change color and/or decoration without any additional cost. In
its simplest form the flexible style contract is a total volume of a particular
silhouette, regardless of color or print, the brand, the retailer or the
e-tailer is contracting for over a specific period of time. Once the contract
is in place the buyer can determine a progression of decorations based on a
real time evaluation of current trends. Whenever a product is determined by the
PVI to be ready for replacement, the micro-factory moves to the next decoration
or colors in the progressive list and replaces the product in the store that
requires the new product. This allows the buyer and the merchandisers to work
together to offer the appropriate product with the maximum PVI store by store
within the distribution area. In the case of online since the product may not
be made in the micro factory until after it is been purchased all of the
products in the priority list of decorations can be displayed for sale since
they only reside in the virtual inventory.
Where can brands and retailers learn more?
All of these applications technologies and merchandising
tools will be on display and detailed in the Fashion Technology section of
SOURCING at MAGIC in the unified MAGIG show August 11-14 in Las Vegas.
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