The fashion industry, known for its rapid evolution and dynamic trends, faces several challenges in 2024.
From labor shortages to sustainability concerns, these issues can impede growth and profitability.
However, Enterprise Resource Planning (ERP) and Product Lifecycle Management (PLM) systems offer comprehensive solutions to these challenges.
Here’s a look at the top 10 fashion industry challenges and how ERP and PLM can help address them.
The fashion industry is grappling with a significant labor shortage, particularly in skilled positions such as designers, tailors, and textile workers. This shortage leads to:
Attracting and retaining talent has become a crucial task for companies aiming to maintain their competitive edge.
ERP systems streamline HR processes by automating recruitment, training, and retention strategies. They also help in workforce planning and performance management, ensuring the right talent is in place.
PLM systems assist in capturing design ideas and specifications, enabling easier collaboration and reducing the dependency on specific skill sets.
Additionally, leveraging automation in your processes can allow you to reduce your reliance on your workforce.
Sustainability remains a critical issue. With growing consumer awareness and stricter regulations, brands are under pressure to adopt sustainable practices.
This includes
Balancing sustainability with profitability is a complex task that requires significant investment and innovation.
ERP systems provide transparency in supply chain management, helping brands track the sustainability of their suppliers and materials.
PLM systems facilitate sustainable product design by integrating eco-friendly materials and processes from the inception of a product’s lifecycle.
Textile waste is a major environmental issue. The fast-paced nature of fashion leads to significant waste, with millions of tons of fabric discarded annually. In fact, fashion generates 40 million tons of textile waste globally each year.
Managing and reducing this waste is crucial for not only environmental reasons but also economic. It’s a win-win.
ERP systems help in inventory management, reducing overproduction and minimizing waste.
PLM systems enable the design of products with end-of-life in mind, promoting recyclability and reuse. They also assist in optimizing material usage during the design phase.
The fast fashion model leads to rapidly changing trends, making it difficult for brands to keep up with consumer demands.
This constant flux leads to:
The industry must find ways to balance speed with sustainability, ensuring they can meet consumer demands without excessive waste.
ERP systems enhance demand forecasting and inventory management, allowing brands to respond swiftly to market changes.
PLM systems support agile product development, enabling quicker turnaround from design to production.
Managing the lifecycle of a product from conception to end-of-life is essential for maintaining quality and customer satisfaction. Poor product lifetime management can result in inferior products, leading to increased returns and damaged brand reputation.
Companies must invest in technologies and processes that ensure products remain durable and high-quality throughout their lifecycle.
PLM systems track the entire lifecycle of a product, from concept to disposal, ensuring high quality and longevity.
ERP systems integrate with PLM to provide real-time data on product performance, aiding in continuous improvement.
Supply chain disruptions can severely impact production schedules and lead to delays.
These bottlenecks can be caused by:
Ensuring a resilient and flexible supply chain is crucial for mitigating these risks and maintaining smooth operations.
ERP systems optimize supply chain operations by providing end-to-end visibility and facilitating better coordination with suppliers.
PLM systems help maintain a flexible supply chain by allowing quick adjustments to product designs and materials.
High return rates, especially in e-commerce, can be costly and challenging to manage. In the past year, 26% of consumers have returned an item of clothing.
Returns can be costly and logistically challenging, often resulting from fit issues, quality discrepancies, or unmet expectations.
The also increases processing costs and affects cash flow in accounts payable while delaying revenue recognition and creating customer credits in accounts receivable.
ERP systems streamline the returns process, improving efficiency and reducing costs.
PLM systems enhance product design accuracy, ensuring better fit and quality, thus reducing the likelihood of returns.
Achieving a perfect fit for a diverse customer base is a challenge. With the increase in demand for size inclusivity, your business needs to not only fit all sizes but look good on them.
Fit issues can lead to high return rates and customer dissatisfaction.
PLM systems allow for detailed recording of size and fit specifications, facilitating better pattern-making and grading.
ERP systems integrate customer feedback and sales data to continually refine and improve fit.
The increasing reliance on digital systems makes the fashion industry vulnerable to data breaches and cyber-attacks. Protecting sensitive information from attacks is critical to maintaining customer trust and compliance with regulations.
Additionally, implementing cybersecurity can save you potential costs as the average breach costs businesses $3.28 million.
ERP systems incorporate robust security measures to protect data integrity and privacy.
PLM systems ensure that design and production data are securely stored and accessed only by authorized personnel.
Economic instability and inflation can lead to reduced consumer spending and increased production costs. Managing these financial pressures is crucial for survival.
Economic volatility and inflation are cited by over half of the fashion industry executives polled by Mckinsey as their number one concern.
ERP systems provide comprehensive financial management tools, helping brands monitor costs, optimize pricing strategies, and manage budgets effectively.
PLM systems aid in cost-effective product development, ensuring profitability even in challenging economic conditions.
The fashion industry in 2024 faces numerous challenges, but the integration of ERP and PLM systems offers powerful solutions.
These technologies enhance efficiency, promote sustainability, and enable brands to stay competitive in a rapidly changing market. By leveraging ERP and PLM, fashion companies can navigate these challenges and achieve long-term success.
Not sure what the difference is between ERP and PLM and why you need both, read our latest blog PLM Vs ERP In Fashion: What Are The Differences?.
Ready to equip your team with the tools they need? Schedule a free demo to see what PolyPM can do for you.