Many fashion designers struggle to keep their company healthy and out of debt due to the crippling economic structure imposed by the industry. It needs an overhaul and a fresh perspective, which makes it a perfect project for the industrial engineering side of Idea Engineering. At the moment we are working on two fashion projects to prototype and implement a new economic formula for the emerging designers. This means no debt, small stock, cutting out middle men, local manufacturing, focusing online presence, creating a new buyer psychology, and negotiating new buying terms between designers and stockists.
The biggest challenge is for labels to move away from the viscous cycle of seasonal sales and high debt, which leaves most labels in the red for years despite their external brand success. The Spanish label Zara demonstrates a business model that uses a reactive plan and successfully moves away from the standard fashion cycle. It all started when a stockist cancelled a huge order, Zara reacted quickly and started a store to get rid of the excess stock. Realising the benefits of their reaction, Zara implemented a new production strategy, which included having full ownership of the brand via their own stores.
We would like to highlight the three things Zara does which allows them to break away from the usual fashion pitfalls. One, they are not corralled to the seasonal sales cycle. Zara designers implement trends from design to production every couple of weeks, which keeps them ahead of their competitors. Number two, they manufacture locally, reducing distribution costs and creating more control of production deadlines. Three, the quantity of orders are small, which decreases left over stock and creates a sense of exclusivity for the customer.
This also has an added bonus; it supports the local economy by creating new manufacturing jobs. This in a country that is looking at reaching 20% unemployment within the year is a true example of how intelligent manufacturing can boost economy.
The Zara supply chain model supports the Idea Engineering theory of always flipping current models on their head in order to stand out from your competitors. Zara did not follow the traditional fashion model and created a model that works for them, one that allows flexibility to react to trends immediately instead of forecasting and speculating, truly rewiring innovation.