When choosing between these two supply chain strategies, several factors must be considered, including the preferences and purchasing behavior of consumers and the nature and strategies of competitors. Companies like Zara-the world’s largest fast fashion manufacturer and part of the Inditex group-serve as prime examples of the benefits of such a strategy. The strategy of fast fashion has come to the fore in recent years driven by increasing globalization and digitization, both responsible for a faster spread of trends. To summarize, the focus of the fast fashion strategy is on reacting more flexibly to consumer demand and offering more fashionable products. Stock-outs are artificially generated to create a sense of scarcity and exclusiveness, and there are no classic end-of-season sales. Fashion products are produced in smaller quantities and are offered to the consumer for only a few weeks. This approach, therefore, benefits from lower demand uncertainty. Consequently, demand forecasts can be made much closer to the selling season and can even be driven by real-time data from the points of sale. The latter approach incurs higher labor costs and thus higher production costs, but it also provides increased flexibility due to shorter transportation distances. The fast fashion strategy, in contrast, differentiates between two separate product categories: basic products (e.g., plain t-shirts), which are procured analogously to those in the traditional supply chain strategy, and fashion clothes, which are sourced from producers located closer to the point of sale (mostly in European countries). Overall, the focus of the traditional strategy is on producing standardized clothes at the lowest possible cost. This way, manufacturers attempt to prevent stock-outs so that as many items as possible can be sold during the season, including through end-of-season sales at reduced prices.
#Run supply and demand into anylogic full#
Usually, large quantities of each item are procured, covering the estimated demand for the full sales period and including sufficient safety stocks. Therefore, in the traditional system, sales forecasts must be made well in advance of the selling season, resulting in rather high demand uncertainty. The traditional strategy (which rose to prominence in the 1960s in Europe) is characterized by sourcing production from low-wage countries, leading to lower labor costs as well as longer transportation times, and thus, to a reduction in the flexibility of the logistical processes. The question calls for understanding the differences between the established traditional strategy and the fast fashion strategy.
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What is the supply chain strategy of choice for the apparel industry? Over the last two decades, this question has become more and more important for managers of fashion manufacturers as well as for scientists in the field of business administration. traditional fashion) with varying product and communication strategies (product attributes and advertising) in several market scenarios. In this paper, the capability potential of such agent-based market simulation is demonstrated by investigating two supply chain strategies (fast fashion vs.
These limitations can be overcome by applying an agent-based simulation approach-an approach that can account for a wider range of factors, including several competing manufacturers utilizing different supply chain strategies, individual consumer preferences and behavior, word-of-mouth communication, normative social influence, and first-hand experience, as well as advertising. Therefore, attempts to reduce the underlying complexity in order to model these markets have limited existing research to the consideration of only selected aspects of markets (e.g., considering only homogeneous buyers, a single period, a single product, or a single manufacturer in the absence of competition) rather than taking a more comprehensive view. However, apparel markets are complex systems. Accordingly, choosing the most beneficial supply chain strategy has become an established research topic.
Today, for some market segments, the speed of production cycles is more important than the cost because short throughput time allows the flexibility to adjust to rapidly changing fashion trends in these market segments. In the past, most companies in the European apparel industry focused on minimizing manufacturing costs in the design of supply chains in conjunction with long-distance shipping from production sites in the Far East and relatively long production cycles.
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