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Effect of Internet - Business to Business

It is interesting whenever the idea of the effect of the internet towards a industry comes into mind it is instantly assumed the only concept discussed is the demand side. An industry’s consumers ability to purchase apparel online is not the only aspect of the industry impacted, forgetting supply. In an industry ravaged by inefficiency due to a relatively unpredictable nature the internet has opened doors to supply integrations changing the clothing industry and the way it operates forever. For a proper representation of these facts I digress to a pre and post internet comparison of the clothing industry.

 

Before

The advent of the internet your typical clothing store or catalog sales company would order in bulk to save money and because they had no way to be exact with their sales estimates. In order to not run out of any certain product losing money and having to wait in most cases at least a week for a new shipment bulk was the only way to buy. Not ideal but this is why there are always clearance racks in any clothing store, inaccurate supply management is the norm in this industry.

 

Tastes

Unlike virtually every other product in the world clothes represent who you are. This makes the way in which people by clothes very differently then the way people buy anything else. Making it increasingly difficult for stores to have accurate supplies of products. So much emotion goes into buying clothes that demand is ever changing, and a product with ever changing demand makes for never ending supply struggles. Clothes are linked to the way we feel about ourselves, our body image and the image we wish to project to others. Virtually every other product in the world does not require such emotion to purchase making the industries inefficiency’s a bit more understandable. Demand is far different in the clothing industry then ever other industry there is making supply equally difficult to control.

 

 

After

With the advent of internet and digital technologies a once unpredictable inefficient supply system is forever changed for the better. Electronic systems now keep track of bar codes allowing the entire supply chain to function as one. A once scattered paired link supply system has been streamlined opening communication so much so stores are reversing the way they are used to placing orders. Instead of bulk clothing stores purchase replacement quantity’s cutting unnecessary costs.

 

 

EDI - Electronic Data Interchange

Gives all textiles and apparel businesses an ability to track every individual garment from creation to sale. Making it possible to allow effective supply chain management unrivaled by any other pre-existing technology.  All products have a barcode on them upon the completion of fabrication. Barcodes are scanned when being packed out to individual retailers giving the manufacturer perfect information on what each store gets for future records. Finally giving the makers of the products a true representation of near exactly which specific garment and color combinations are most in demand. Now industry suppliers can begin to accurately control their own stocks creating the first domino effect of savings. Next stores now know how many of each particular clothing items were sold giving a near 100 percent accurate inventory stock information. Digital barcode scanners make this possible but with the addition of internet connectivity manufacturers and retail store locations take this technology to the next level. Instead of each retailer ordering various bulk quantities small replacement orders are made more frequently. Industry supply is showing congruency because of the improved communication and product information. It is now the proper hub and spoke system rather then a pair wise connection. This means finally an industry that was always hit or miss due to a moving target demand and supply because of a lack of product information can have virtually perfect product information. EDI coupled with internet capability creates a supply chain in which all product information from every store is known linking each store to the manufacturer. Now textile and apparel industries can function as one whole virtually all knowing system instead of multiple paired links.

 

Cost Cutting

All of these innovations cost money to implement however this technologies return on investment cannot be overstated, especially in such an ever changing industry. Due to tremendous increases in communication, visibility in the supply chain and improved forecasting clothing companies can be as efficient as supercenters like Wal-Mart. The internet has arguably done more for the supply side of this particular industry then it has for the demand side, which can probably not be said about any other industry. The great power of the internet is what made it possible for a long awaited fully integrated clothing industry, finally allowing it to be on the same supply chain management level as almost every other industry known to man.

 

 
 
 
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