THE ROLE OF PRODUCT DEVELOPMENT IN THE APPAREL SUPPLY CHAIN PRODUCT DEVELOPMENT The strategic creative technical production and and distribution planning OF GOODS TRADITIONAL LINEAR SUPLY CHAIN 1 Fiber production 2 Textile production 3 Apparel manufacturing 4 Retailers 5 Final consumer The Limited was the first to venture into their own product development APPAREL SUPPLY CHAIN STRUCTURE TODAY More complex and flexible than the traditional linear model Builds on CORE COMPETENCIES More collaborative time It allows product innovation to 1 cost 2 speed to market 3 manufacturing expertise and access to technology Digital technologies make it possible for companies to coordinate their core competencies into a single effort RETAIL PRODUCT DEVELOPMENT SUPPLY CHAIN Seeks to bypass the profit center of wholesale brand apparel manufacturers Produce exclusive products at a more competitive price SUPPLY CHAIN STRATEGY SCM is a competitive customer enriching supply system PLM SOFTWARE It captures manages visualizes and disseminates product related information from initial concept to product s retirement The following areas must be addressed Seasonal concept Business marketing plans concept mood color palette and materials trim silhouettes product tracking Line development Merchandising plans line boards material usage market calendars and Definition Initial specification adopted specification production specification special size specification and multichannel specification Sourcing Costing Vendor collaboration vendor allocation multisourcing estimate costing quality GROWTH STRATEGIES Marketplace not yet saturated Emerging trends create new opportunities Increased market share in a given market New customers or markets Sneakerization The process of transforming an inexpensive commodity product into a cutting edge specialty product HOW TO DIFFERENTIATE Lower compelling price value Walmart Superior Quality Lands End Unique Features or aesthetic Burberry Minimal carbon footprint Patagonia Unique fit Your Daughter s Jeans Speed to market fast fashion Zara VERTICAL INTEGRATION A strategy that seeks to consolidate a supply chain by acquiring companies at other stages in the supply chain Signature stores Manufacturer owned stores give the brand a direct line to their ULTIMATE customer Outlet stores Provide a means of controlling excess goods DIVERSIFICATION Occurs when a firm expands its product mix to capitalize on brand recognition and increase sales enhancing efficiencies for greater profit May also be achieved through licensing or the acquisition of related or unrelated companies GLOBALIZATION Major growth opportunity Retailers are expanding overseas Requires a strong understanding of a more diverse consumer BUSINESS PLANNING CREATIVE DEVELOPMENT BUSINESS PLANNING A business plan is a firm s overall aims objective and strategy for the future The intent is to provide structure for an ongoing process It is constantly adjusted PLANNING Maintains quality increases productivity and requires meeting deadlines BASIC BUSINESS FUNCTIONS 1 Merchandising Consists of planning development and presentation Balancing a line can be done by determining style size and color and where the items will be sold 2 Production making the product developing specifications costing the product approval of 3 Marketing advertising and promotional focus sales team is part of this and recommends sales 4 Finance responsible for all accounting activities 5 Operations upkeep of equipment computers building facilities receiving securing technical design goals shipping STRATEGIC PLANNING Developed by the firm s executive management Should be based on the firm s mission vision and value A mission statement defines the organization s purpose and primary objectives Its prime function is to define the key measure or measures of the organization s success It articulates why they are in business the customer they serve and what makes them special EX Nordstrom s mission statement Offer the customer the best possible service selection quality and value Vision statement outlines goals for the future and how it wants the world to see its brand It may need to be reviewed when goals have been reached or market conditions change Mission vision and values help the firm to establish Sales and profit goals Market positioning and competitive advantage Target customer Channels of distribution Breadth and depth of product mix Brand portfolio and image Managing investments and growth opportunities Strategic partnerships Corporate culture and social responsibility Target customer price they re going to pay timing Determined by 1 Category 2 Price of the line 3 What are the standards of the product quality indicators Budgets are written plans for anticipated monetary income and expenditures of the firm basically the sales and cost of doing business established during strategic phase APPAREL PRODUCT PLANNING 1 Creative planning 2 Merchandise planning 3 Production planning 4 Technical planning 1 Creative Planning 2 Merchandise Planning 3 Production Planning Product Development managers are involved in 3 types of planning CREATIVE PLANNING Tracks trends and interprets them for the company s target market Trend forecasting includes Determining the color palette of the season Style statements or BIG IDEAS Textiles findings Styling details Patterns Key item drivers They basically select color combinations the textiles and the basic design of the products that will be produced Example for spring florals and stripes Communicate a story through the fabrics MERCHANDISE PLANNING Merchandise budget identifies the resources needed to meet profit sales and margin objectives for a specific season Line or range plan sets sales and margin goals for line Assortment plan plays a role by breaking down the line plan into components that address customer preferences What product How much of it What colors A merchandise calendar controls the events required to get the planned apparel products to the customer at the right time PRODUCTION PLANNING Production planners must understand the cost of materials trims and value added finishes and processes Determine quantity and quality criteria Specify assembly processes necessary to produce an acceptable final product Traditional time is 10 12 months TECHNICAL PLANNING Technical designers evaluate a prototype garment before it is approved for production SEASONS Fall Winter Lines are shown in Feb March because more costly and difficult