Quantitative Supply Chain For Fashion

00:08 Introduction
00:31 Perhaps a nice place to start is to look at how the industry currently operates. So what is the more traditional approach the fashion industry takes with supply chains?
01:26 I know there will be many variations depending on the type of product, but what does the lifecycle of a fashion product look like?
06:34 A number of low cost retailers are currently pushing ultrafast fashion, with lead times of less than a week from design to the shelf. How can we possibly manage to get these lead times so short? What are the key challenges that we are seeing in order to make that happen?
10:09 Uniqlo recently announced they are using automation in one of their warehouses. What are the production challenges that you are seeing in this industry and how do you see automation changing that?
13:55 What about the end user and the sales process? How does price elasticity affect things?
16:07 What you are saying is that instead of sticking to a collection, you want to move towards a more gradual phasing between each of the different seasons?
18:09 One of the big problems with forecasting for the fashion industry is that you can’t really account for that day when a celebrity walks out of the front door wearing a particular tee-shirt. Can you ever really account for these ‘freak’ spikes in demand that fashion industry can experience?
21:03 What about channels such as Instagram, where do you see somebody wearing a particular item of clothing? Do you think fashion companies already have stock ready for those particular occasions?


Fashion brands are driven by novelty. This puts a lot of pressure on fashion supply chains to reduce overstocks, both to reduce the discount rates but also to make room for the new collections. Overstocks are typically caused by an incorrect prior forecast of the customer demand.

Edith Head once famously said that “You can have anything you want in life if you dress for it”. With the fashion industry reaching a global value of around 3 trillion dollars, it seems that few disagree. However, all that glitters is not gold. That’s why, in this episode of LokadTV, we decide to shed light on the numerous supply chain challenges within the industry.

First of all, the lifecycle of a fashion product seems to be disseminated with a series of constraints, like MOQs, container shipments or the problem of the dispatch between the different channels - to name but a few. If we think about ultrafast fashion, the challenges are even bigger, considering that the lead times are often extremely short: less than a week from design to the shelf. In this video, we discover how technology can help us automate a series of time-consuming decisions.

We also talk about sales and pricing, which are an integral part of the fashion industry and one of its key challenges as well. Price elasticity is the main mechanism that brands use to liquidate their inventory at the end of a collection, but with millions of items spread over different channels, it requires a massive workforce. See how a Quantitative Supply Chain initiative can help you in dealing with this riddle.

Finally, we discuss how the items of clothing that a celebrity decides to wear can often result in stockouts. Can brands really forecast these ‘freak’ spikes in demand? How could a probabilistic approach take into account those statistical outliers? What about social media, especially Instagram? Are companies nowadays overstocking certain items in anticipation of what influencers will wear, and should this kind of marketing via platforms be taken into account in future stock management decisions? We debate these questions and more.