Technology and Sustainability in Fashion Supply Chain

In the face of growing e-commerce expanse, consumers these days expect larger product collections, faster product launches, and at cheaper prices. All of these factors have put immense pressure on supply chains to deliver not only the desired product, but also at nominal cost and at the desired timeline, at the same time, adhering to sustainability guidelines. Such surmounting complexities have only accentuated the need for an agile fashion supply chain, backed by a strong technology support. Leading global fashion companies and retailers have already realized the gap and have started taking the tightrope walk. Our Cover Story offers anencapsulated compiled version of winning streaks of leading companies and also presents first-hand insights of supply chain leaders of leading fashion & lifestyle companies in India, who removed their previous time amid such a crucial heavy festive period and graciously agreed to give us their exclusive take on what lies ahead in the Indian fashion landscape…

“Before we embark upon new technology journey, it’s all about getting the house in order. Though we keep talking about the connected enterprise architecture, at some points, things just don’t fall in place. The very first thing we have to consider that whatever technology solutions we are working with currently, they all have to be in sync. When we talk about omnichannel, it has to be delivering the same experience across platforms. Retailers need to offer the same experience across platforms to build brand credibility and carry the same experience from one place to another platform, which mandates integrating all these technologies to minimize any possible leakages,” explains Ranjan Sharma, CIO & Head - Supply Chain, Bestseller India, during this interview…

What are the sustainability initiatives taken by Bestseller?

To meet our targets on climate, water, and circularity, our products need to be consolidated in suppliers that are willing to move forwards with us on this journey. By 2025, we have committed in our Fashion FWD strategy that 75% of all product orders will be placed with suppliers that are highly rated in our Sustainability Evaluation. A supplier’s environmental performance is a very important part of this criteria. We use data from the Factory Standards Programme, Higg FEM, BHive, and the IPE to create the Supplier Environment Rating.

Bestseller uses the Higg Facility Environment Module (FEM) tool as one part of its environmental performance evaluation for factories in our supply chain. All key factories of Bestseller need to adopt the Higg FEM so we can measure environmental performance across seven impact areas:= environmental management systems, water use, wastewater, chemical use, waste management, energy use and greenhouse gas emissions. The use of Higg FEM means this data is consistently recorded and tracked across all sourcing markets.

Bestseller has been using Maersk ECO Delivery's low-emission biofuel solution for the past two years. The biomethanol that powers the new vessel is sourced from bio-mass waste, resulting in a lower carbon footprint than traditional fossil fuels. Since partnering with Maersk two year ago, we have been able to avoid 37,000 tonnes of CO2 emissions compared to using traditional fossil-fuel based ocean transport.

As transport represents 3% of the fashion company’s total CO2 emissions, this is just one small step forward. Going forward, Bestseller will make greater efforts to reduce its indirect emissions from the production of raw materials and manufacturing, where its largest impact is.

What are some of the key enablers of omnichannel and how is technology playing a key role?

One of the important aspects when we started working on omnichannel was to ensure real time store inventory and to ensure that there was enough buy-in from store operations for the same, it has been a long journey for all of us. This has been the topic of discussion since long ,a lot of work has happened and still there is so much more to offer and so much left to explore and solve the customer centricity puzzle. It’s like a complete circle. We solve one problem and something else crops up, which makes it pretty exciting. One fundamental question that we must address when we are operating omnichannel retail business is ‘What is it that we want to solve for “OUR” customers’. The biggest demand from the customer is the speed at which we can fulfil their orders.

Another important criterion is the seamlessness for the consumer to buy anywhere, return or exchange anywhere or get alteration done or solve any other post purchase problem anywhere. Now let me turn this around and ask – what is it in for us to deliver such an experience. When we started our omnichannel journey, our first emphasis was on the speed at which we can reach customers. We analyzed locations from where we can deliver products to our customers at the fastest speed. After zeroing-on the locations, we started building capabilities around that. We can’t have many distribution centres, but we can locate stores closer to customers.

This essentially entails that the store has to not only serve the walk-in customers, but also act as the micro fulfilment centre for the company. This involves accepting the order, packing the product, shipping it, handling the logistics, and also managing the returns. Returns management is the most complex part of omnichannel retailing. A forward fulfilment is comparatively easier to manage, but the returns management, especially in fashion retail, is highly challenging. This is where technology has been taking the centrestage. Technology enablement ensured in simplifying the process, training the employees quickly, be it store managers or the back-end support staff and empowering store managers so that they are able to deliver a seamless customer experience to ensure that the customers keep coming back to our stores or the digital channels. In all of these, the speed at which one accepts the order, finds the right product, ensures that the product is rightly packed and gets shipped out fastest remains the key. We must train the people working at the shopfloor or the warehouse in doubling up for packaging and shipping the right merchandize. Even if we have new person, he / she needs to be at the same pace with others. This is where continuous training plays a big role.

Another complex task is to identify the right location to ship from. Necessarily, it might not be the nearest store. Over a period of time, as the process matures, we will also need to analyze the most profitable place to ship a particular order. There are a number of parameters that we need to look into to make this whole complex process a simple and seamless one. One of the biggest problems even to reach any of these stages was having a real-time inventory visibility of the stores. Around 5-7 years ago, none of the retailers could even think of achieving that. All of us were trying to solve for real-time store inventory, synchronized across and then being able to proliferate two different channels and the complexity surmounts when it’s about omnichannel, when you have to serve various marketplaces as well. Technology is bringing all of these complex pieces together. It has enabled retailers to be able to run this business in a seamless fashion. Without which,

I think, omnichannel would have never been a possibility. In ensuring all of these, if the inventory is not optimized, everything else fails. The fundamental of supply chain – having the right inventory at the right time and the right place has become all the more critical today. Inventory has to be identifiable. There lies the importance of traceability and that is where technology has been enabling companies like us.

What are the factors that we must take into consideration before going for any technology solution?

Before we embark upon new technology journey, it’s all about getting the house in order. Though we keep talking about the connected enterprise architecture, at some points, things just don’t fall in place. The very first thing we have to consider that whatever technology solutions we are working with currently, they all have to be in sync. The biggest investment needed is on strengthening the ultimate consumer experience where the consumer is no more buying from your store or online platform, there are many more channels – social media, conversational commerce, marketplace, so on & so forth, from where your consumer can buy your products. The key lies in integrating all of them together.

Retailers need to offer the same experience across platforms to build brand credibility and carry the same experience from one place to another platform. When we talk about omnichannel, it has to be delivering the same experience across platforms. We also need to integrate all these technologies so that leakages are minimized.

Can you cite an example of successful implementation of tech tool in your supply chain…

We have recently successfully implemented large-scale, fully automated warehouse solution in Taulov, Denmark. This innovative offering resulted in increased warehouse efficiency, improved working environment for employees, minimised errors and reduced storage space. This large-scale automation solution focuses on the entire logistics operation – from when the item arrives until the item is delivered to the customer.

At the distribution centre, which serves customers all over Northern Europe, BESTSELLER invested in several technologies, including 79 new Skypod robots which are part of an Exotec system, which automates the collection and packing of products, potentially more than doubling productivity compared to a manual setup. The robots transport incoming boxes to their storage location, climb shelves, and deliver boxes of products to operators for packing and shipment to customers. Robots for depalletizing, box opening and palletising are also a part of the solution, ensuring a better and safer working environment for our colleagues.

What’s your take on new age technology solutions taking shape in fashion supply chain?

Bestseller is one of the first fashion retailers to scale a new blockchain solution and is thereby taking a remarkable step towards product traceability. Investments in traceability solutions are needed to make sure that consumers get products they can trust and simultaneously ensure compliance with expected EU requirements for digital product passports.

Together with a group of key suppliers, we are embarking on the first part of the platform's implementation phase. The project will require significant input from the suppliers, who will now have to use TextileGenesis’ new platform. The hope for them is that this becomes an industry-wide tool, equipping them with the capacity to deliver product level transparency in line with the expected EU legislation. Through this platform we can trace every step in the production process, giving us access to information we have not had previously, and enabling us to deliver stronger transparency to our company and customers. Focusing on complete fibre-to-retail traceability at scale, Bestseller is at the cutting-edge in the industry.