Should profitable Apparel businesses bother to go Digital?

I meet a lot of Business owners and CXOs in the apparel business for the work I do, the most intriguing question I have got from some of the business owners regarding digitization is,

“We are not doing bad, right?

Why do I need to go through this gruesome process of re-mapping and re-establishing my whole company process?”

In some sense, yes, they are right. These entrepreneurs have made millions of dollars (Some made billions) in their lifetime, am I even in a proper position to give him advice on changing the processes that have made them millions?

What the owners have not realized properly, their company process is continuously changing also. The process they own today has gone through so many iterations, sometimes without them knowing because it has happened subtly, through different people.

The important part here is “People”. Since the beginning, our apparel industry has been always a “people-driven” industry. The wage rate was relatively lower than the rest of the world, so whatever others were doing, we achieved the same result by throwing more people at that, because we could afford that here. By doing so, we have built a person-dependent work environment.

That is the reason we see the biggest salary raises when a super-performing team member slams his resignation letter on the CEO’S table.

This shows how we are dependent on these performing people, even more than our business processes.

So what? We will simply get more talented people. But there is a catch. Have you seen the frustration in your HR team? Simply ask them, how difficult is it to get a good employee match to its job description these days? The need for the industry is rising, but very few quality leaders are being developed.

Many garments are not focused on developing strong holistic business processes, mostly they are dependent on their super performers to manage the situation and save our air shipments. It is done easily when you are a start-up apparel company with 10-15 Lines, but what happens once you cross that threshold?

Instead of getting 5 super performers, you need 15 now. Even if you get them onboarded at your company, each will implement and follow their own SOP, which creates a conflict of interest between different departments. And no matter how talented, and efficient they are, if they have not digitized their data, all of their combined work is sitting on an isolated island, in silos.

The moment any manager takes a printout of their excel report, it becomes Dead data.

The moment any of his colleagues updates his excel sheet and not sent it across, the non-synchronization makes both data irrelevant to work with.

When you live in this kind of data silo, the confusion is MASSIVE.

We have seen this over and over. But let’s circle back to the main question, we are still doing good, right?

The real question is, for how long? The situation has changed a lot from the pre-2010 era.

1.??????The FOBs are declining continuously.

2.??????The average Lead time is less than half now in 2022.

3.??????The product mix has become 3-4 Times.

4.??????Your own capacity, which in some terms is a liability to you, has doubled or tripled from 10 lines to 50 lines.

5.??????The wage of the workers will likely go through another increase in 2023.

6.??????Constant change in buying pattern due to War & Covid.

7.??????Traditional retailers also have to fight with e-commerce, f-commerce, and new business models like C2M (Consumer to manufacturer).

8.??????The usual marketing for apparel will soon be taken over by social media platforms like Tiktok, Instagram, and Facebook, putting more and more customization requirements from the buyer’s end.

9.???Increased utility cost due to global gas price increment.

10.??Increased fiber prices worldwide.

11.??Increased overhead cost due to new compliance and sustainability requirements,

AND SO MANY MORE.........

But, is Digitization going to solve all of these problems? Absolutely, not!

But first, it will give you more reaction time. If you live in a data silo bubble, there is a 100% chance that you never see a real-time scenario of your business. This put you in a position where you have to make your strategic decisions based on inaccurate data, most based on your experience and hunch. And again, this is a scenario where the entire business is depending on People, not a data-driven process.

By going digital, you will be also ensuring data authentication across your organizations. To do that, you also need to integrate different business solutions. This is also tricky as there is no one-box solution for the apparel industry. But most mature products and partners now offer integration capabilities, so this is becoming a lesser challenge day by day.

Implementing a digital solution will take your business process and establish it through a solution. The process will have an error-checking option. Even if you have an SOP in your organization which runs by people, there is a chance of manipulating that or bypassing that. Digital solutions restrict these kinds of malpractices.

And lastly, once all of your organizations are using a connected digital ecosystem, you will finally have the “ONE VERSION OF THE TRUTH”. This will help you to gain “Actionable insights”, in “Real-time”. Since the system will keep track of all your historical data, Tracking KPI (Key performance indicator) and trends are easier than ever. Now, why would you need KPIs?

Just remember, What you can’t measure, you simply can’t control.

In the end, to the first generation of our great industry, it is time to pass your baton to your second generation of businessmen. One of the reasons you are still managing this business through people and your hunch is that you started as a small startup. The business growth happened with you, and you have dedicated your blood, sweat, and tears to achieve that killer instinct about your self-made business. It is time to convert that experience into a systematic process, where it will be less dependent on who is running the process, but more on how the process is defined and structured.

I have not seen a single 1st generation entrepreneur who wants his son/daughter to go through what he has gone through to build his empire, working late till 3 AM to ensure shipments. The only way to preserve the company's legacy experience and expertise are to embed it into the company culture and process, through digitization. I hope a lot of you will agree with my thoughts, and we are also open to honest feedback and criticism.

If you are an Apparel entrepreneur/senior management and would like to know and explore more about how we help companies with digitization, feel free to book our calendar through this below link.