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Fashion Tech Series
SUPPLY CHAIN TRANSFORMATION
INTRO
ABOUT THIS SERIES Metaverse, NFTs, machine learning, blockchain…
What does it all mean? Change is happening fast. Not only are business realities in constant flux, but technological innovation is moving at an even more rapid pace. The time for digital transformation isn't the end of the decade—it is now. MMGNET has teamed up with the global forecasting agency Fashion Snoops to present this multi-part series that breaks down the latest and most relevant technologies and tells you exactly how they can be applied to the key areas of the fashion vertical: (1) Sourcing + Supply Chain, (2) Design, (3) Retail, and (4) Marketing. In each report, we demystify the latest technological developments shaping the year ahead, from artificial intelligence to Web3; define opportunities companies should consider; and highlight specific success stories from those already forging a new path forward. In addition, readers can find various resource lists outlining potential vendors, partners, and solutions providers to have on their radar. The preservation of the fashion industry is a product of interconnected functions, systems, individuals, and organizations that are all moving in different directions and at different speeds. At the most basic level, digital transformation can open up the parts of the whole to communicate faster and more fully, and even the smallest updates and tweaks internally can lead to profound benefits on the consumer end. Collectively, these changes can lay the groundwork for us all to step into the future.
SUPPLY CHAIN
TRANSFORMATION
NEW AGE OF DESIGN
THE EVOLUTION OF RETAIL
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MARKETING INNOVATIONS
INDEX
Supply Chain Transformation
True transformation starts at the source. Digitization along the entire supply chain, from raw material suppliers to last-mile delivery services, lays the foundation for
more transparent operations, better data tracking, and easier communication between parties. Artificial intelligence has the potential to revolutionize knowledge bases and machinery, allowing businesses to be responsive and resilient. Web3 technologies can power this new transparency and bring certainty to workflows and practices. Whether small tweaks or sweeping changes, these collective digitization efforts set the industry up for a more sustainable future.
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Blockchain Traceability solutions facilitate a smarter supply chain
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Production Robotics Automated technologies drive on-demand manufacturing
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Demand Forecasting AI and interconnected systems enable real-time inventory insights
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Logistics Automation Tapping into automation to streamline logistics from warehouse to doorstep
Sharing Platforms Online networks power dynamic global sourcing
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Supply Chain Transformation
Blockchain Traceability solutions facilitate a smarter supply chain
Fast-approaching net-zero milestones, along with legislative pressures for businesses to be more sustainable, have turned accountability into a top priority. At the same time, friction in the supply chain has resulted in mounting costs and timelines. A foundation of Web3 (i.e. the future vision of a collective internet), blockchain technology has emerged as a promising tool to iron out inefficiencies in the supply chain and certify responsible business practices from seed to shelf. How does blockchain work? By generating a unique cryptographic identifier that can be attached to any asset or packet of data, blockchain provides a means of certifying information—think of it as a digital signature. To better track the fashion supply chain, a number of smart technologies are being deployed that allow products to easily ‘communicate’ with blockchain-backed databases. This way, each time a product encounters a new touchpoint, that information gets automatically sent to the blockchain platform, where it is validated according to a set of agreed-upon criteria. From there, a new ‘block’ is generated and added to the existing chain. The result is a live, decentralized, immutable record of the product’s history that can be made visible to anyone.
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Supply Chain Transformation
Blockchain
Innovations + Applications Example
Example
MCQ worked with IoT
FibreTrace embeds
company Temera to come
‘smart’ luminescent
up with a number of
pigments into either the
physical solutions to
raw fiber or during yarn
connect their products to a
spinning. This digital tag
A DIGITAL PASSPORT TO AUTHENTICATE GOODS
allows for every touchpoint in the supply chain to be sent via Bluetooth and
Traceability can also be implemented at the product level through near-field communication (NFC) and radio-frequency identification (RFID) chips that can take a number of covert forms, from infused into buttons to sandwiched inside a label. Because these chips allow products to be easily scanned, they have been traditionally used for anti-theft purposes. Now, they’re becoming a necessary tool to track inventory and authenticate goods, especially in the luxury space.
recorded on a proprietary
TRACEABILITY AT THE FIBER LEVEL For the most accurate traceability, digital tags can be implemented at the fiber level, allowing for easier tracking as materials move from a yarn state to end product to even reuse. This technology could be particularly useful for materials and products that boast high sustainability and ethical standards.
blockchain-backed platform. As a result, suppliers gain visibility into how their materials get disseminated, and brands can use the data to solve for inefficiencies and back up claims.
blockchain-backed platform that captures data, certifies items, and even provided the basis for a resale pilot. The brand embeds every product with RFID chips that allow them to be scanned at various stops in their journey and recorded on the blockchain. On the consumer end, NFC chips in hang tags can be scanned with a phone to easily access product information.
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Supply Chain Transformation
POINTS TO KEEP IN MIND
Blockchain
Resources
Arianee French startup that helps luxury brands authenticate their products digitally
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By 2024, the EU has plans to require digital passports for products that disclose information
FibreTrace
on their sustainability.
Empowers brands and suppliers to trace and verify textile fibers from source to store
Lablaco Blockchain-powered circularity platform that helps brands tokenize products at any
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their supply chain report improved data quality.
level of the supply chain
Temera
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Provides IoT solutions catered to the fashion industry
79% of businesses that use blockchain to track
Hurdles to blockchain adoption include high setup costs and a lack of interoperable standards across the industry.
TextileGenesis Offers traceability technology custom built for the fashion and textile ecosystem, with recent partnerships with H&M and Supima
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Before diving into this relatively nascent technology, businesses should think critically
TrusTrace
about their own use cases and weigh potential
AI-powered platform that enables product-level traceability and supply chain
benefits. For example, if sustainability is core to a
transparency for fashion companies
brand’s identity, then it may be beneficial to invest in traceability solutions.
VeChain Provides a full range of blockchain-related solutions, from NFC and RFID chips to consumer-facing apps for scanning products
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Supply Chain Transformation
Demand Forecasting AI and interconnected systems enable real-time inventory insights
The traditional approach of using historical data to forecast demand a year in advance is becoming obsolete. Enhanced with artificial intelligence, the next evolution of demand forecasting is drawing from many sources of information to develop a more comprehensive view that enables businesses to make informed decisions and gauge demand in real time. It is estimated that AI-enabled supply chains are 65% more effective in reducing risk and lowering overall costs. Inventory planning is the product of many interconnected systems, internal and external; and digital transformation along the supply chain has the capacity to create unified demand signal models that can lead to smarter, more responsive operations. The potential of harnessing AI to make better decisions is exciting, but it is worth remembering that the human factor is what gives businesses a competitive edge. These tools provide a starting point, but they require human ingenuity to shape and interpret them in effective ways.
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Supply Chain Transformation
Demand Forecasting
Innovations + Applications
Example
Example
To better anticipate
H&M uses machine
customer needs, Nike
learning in many areas of
bolstered its digital
their business, but one
capability with the
clever approach they’ve
acquisition of Zodiac and
taken with inventory
Celect, two AI-powered
management is in using AI
predictive analytics
to analyze receipts and
LOCALIZED INSIGHTS The pandemic highlighted many opportunities for improvement in inventory management. The most agile companies are using data to glean insights on a local level. They are also taking creative approaches in getting to know their customers and identifying the right signals to follow, translating those learnings into comprehensive predictive models custom-fit for their business.
returns at each store. The algorithm is able to synthesize instant insights on customer trends and preferences on a local level, which helps the business identify what items to promote or stock more of in certain stores, as well as provides intelligence for future planning.
AN INTEGRATED DIGITAL ECOSYSTEM
companies. Zodiac
Digital transformation of all areas of the fashion business is crucial to overall better inventory management. Through this mass digitization, AI-driven tools are connecting the dots between various datasets and players in the supply chain to highlight product opportunities and potential operational efficiencies, such as moving inventories from areas with low demand to ones forecasted to go up.
various apps to understand
analyzes data points from
customer purchasing behavior, recommend products, and improve forecast accuracy. With Celect, Nike gained demand-sensing capabilities to optimize inventory and manage distribution across an omnichannel environment.
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Supply Chain Transformation
POINTS TO KEEP IN MIND
Demand Forecasting
Resources
Antuit.ai
AI-powered demand forecasting platform specializing in retail, consumer goods, and manufacturing industries
Dropit Helps omnichannel businesses unify online and in-store fulfillment ●
Predictive analytics have the potential to reduce demand forecasting errors by 30% to 50%.
Interos B2B platform that mitigates supply chain risks by using AI models that turn static supply chain data into a living map ●
Quantitative models can provide insights at scale,
Lectra
but it is imperative for businesses to continue
Contributing to the Industry 4.0 revolution through a comprehensive array of
pairing them with qualitative methods to get the
technology-driven solutions for brands, retailers, and manufacturers, such as
fullest picture.
Connected PIM, an information management system that allows users to synchronize product data and automate inventory management across channels ●
Companies have unique needs and operations,
Resilinc
and so Integrating the right predictive
Specializes in AI-powered predictive solutions that strengthen global supply chains
technologies throughout the supply chain requires
by making them more ethical, resilient, and transparent
significant investment in bespoke solutions.
Satalia Builds bespoke AI solutions and services to improve operational efficiencies
Stylumia B2B platform that uses computational learning to predict customer demand
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Supply Chain Transformation
Production Robotics Automated technologies drive on-demand manufacturing
With the help of artificial intelligence, robotics at the production level are enabling new levels of on-demand manufacturing and product customization. Robots and cobots (i.e. intelligent robots capable of co-working with humans) have evolved to perform increasingly more complex tasks—faster—which is resulting in lower costs and faster production cycles. Robotic sewing arms, equipped with computer vision software, are guiding, cutting, and sewing fabrics accurately and quickly. Advancements in 3D printing and knitting technologies are being paired with customer-facing interfaces to create personalized products. This opens the door to limitless creativity and zero-waste design. At the same time, digitized micro-factories are on the rise, focusing on small batch production. This model is democratizing the manufacturing process by allowing emerging brands to easily access resources at a lower entry cost. All of these innovations are leading to more localized manufacturing.
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Supply Chain Transformation
Production Robotics
Innovations + Applications
Example Resonance is a micro-sewing facility based in New York. The vertically
Example
integrated, proprietary tech
Nike has invested in a
platform allows creators
robotics company called
and brands to design,
FAST-TRACKING STEPS
manufacture, and sell garments using on-demand
A new generation of robots powered by AI can perform intricate and multiple tasks faster, resulting in fully automated assembly and sewing lines requiring little or no post-production labor. Currently, the production of more basic items like T-shirts, skirts, and jeans can be completely automated; but these technologies can also be employed to perform more tedious or dangerous tasks, freeing up workers to focus on steps that benefit from a human touch.
manufacturing and without
MICRO-FACTORIES
being tied to high minimum
Micro-factories fuel on-demand
orders and fees. To achieve
production with highly automated and technologically advanced manufacturing setups that require less energy, less material, and a smaller labor force. This low-waste manufacturing model can empower smaller brands and designers to bring product to market faster—without holding any inventory.
speed of production, the facility employs a digital design platform for virtual product creation and hands-free fabric cutting robots. The entire process, from creation-to-consumer, takes just a few weeks.
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Grabit that developed an electroadhesion method to assemble the upper part of the sneaker. By using static electricity, the robot stacks the necessary layers of fabrics in only 50 to 70 seconds. Until recently, this complicated process took workers over ten minutes to complete. The technology can also be applied in apparel manufacturing to assemble collars and cuffs.
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Supply Chain Transformation
POINTS TO KEEP IN MIND
Production Robotics
Resources
Sewbo Robotics company that developed a temporary fabric-stiffening technique that can speed up cut-and-sew production
Sewport
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By 2025, it is expected that over 20% of apparel manufacturing will happen locally.
A digital platform that connects small labels with apparel manufacturers and suppliers; algorithms analyze the project to match the right manufacturers to the job ●
While automated, on-demand manufacturing continues to advance, scalability still remains in
Silana
the distance due to the amount of new machinery
Provides fully automated cutting and sewing production
and specialized setup involved.
SoftWear Automation Developed Sewbots, an advanced automated sewing technology that uses
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machine vision to precisely guide stitching and cutting
To set up the blueprint for organizational change, businesses should evaluate what tasks they want to automate, what new skills they need to acquire,
Unmade
and what processes they need to establish to
A platform that enables large apparel companies to produce on-demand and
foster and support technological disruption.
customized product in their own facilities
Variant Malibu A cost-effective B2B platform offering 3D knitting technology and backend integration
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Supply Chain Transformation
Sharing Platforms Online networks power dynamic global sourcing
Functions and actors along the fashion supply chain have been notoriously siloed and manual, each entity operating according to their own set of rules and traditions. The digital transformation forced by the pandemic is leading to a more nimble and transparent supply chain—and it’s also leading to more efficient allocation of resources based on principles of the sharing economy. New online marketplaces and platforms are emerging that are hoping to be the B2B version of Uber or Airbnb for the fashion industry. These services are pooling together vendors, inventories, and insights across the supply chain, from materials sourcing to logistics, and connecting businesses so that they can work together towards cost-effective and sustainable solutions. By aggregating supply and demand, these networks can empower small and mid-sized businesses, in particular, and allow companies to better navigate disruptions and scale operations. They also present an interesting model for wide-scale digitization that companies can apply to their internal systems.
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Supply Chain Transformation
Sharing Platforms
Innovations + Applications
Example In an effort to compete with the likes of Amazon, American Eagle Outfitters acquired two logistics companies that they’ve allowed to operate relatively independently.
Example
The result is a vast logistics
Buy helping suppliers
platform that pools
digitize their inventories,
SHARING LOGISTICS SOLUTIONS
communications, and other operations,
A MARKETPLACE FOR MATERIALS The mechanisms of consumer-facing sharing apps are a natural fit for materials sourcing, providing visibility into inventories, vendor reviews, and pricing. In addition, they can instantly standardize operations and facilitate communication between parties often located across the world from one another.
Dramatic surges in online shopping have put, perhaps, the greatest strain on the logistics end of the supply chain—from warehouse storage to last-mile delivery—and left many smaller businesses unable to compete with conglomerates that can offer fast and low-cost fulfillment. Taking inspiration from consumer-facing delivery apps, new online platforms are allowing businesses to come together and share a number of logistics solutions in more efficient ways.
Material Exchange is providing a hub for brands like H&M and UGG to easily source sustainable materials, as well as send unused inventories back into the supply stream.
together data and demand from both American Eagle and each company’s existing retail clients, allowing all to share and optimize components like warehouse floor space and delivery routes. In what their chief supply chain officer calls “the ultimate frenemy network,” everyone benefits—AEO, participating businesses, customers, and the environment.
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Supply Chain Transformation
POINTS TO KEEP IN MIND
Sharing Platforms
Resources
B-Stock Provides a secondary market for businesses to sell returned or excess goods to a global network of over 500k vetted buyers
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Many companies are already engaging in coworking spaces and have opportunities to
Global Impact Fibre Explorer
translate this sharing mentality to other areas of
A Google-driven platform that pools sourcing data from brands to uncover real
the business. For example, 30% of warehouse
sustainability risks in the supply chain
space in the US sits unused at any time, and 35% of trucks in the country drive empty.
Material Exchange Sustainability-focused B2B sourcing platform for apparel and footwear ●
If companies were to start sharing their waste, it is
Open Apparel Registry / Open Supply Hub
estimated that each country would reduce its
Related platforms aiming to capture digital identities of production facilities around
carbon emissions by 39%.
the world, standardize data, and facilitate collaboration
Spacefill
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Connects companies looking to both list and acquire short-term warehousing space
Recognizing the environmental and economic need for more collaboration in the logistics space, the US government has launched FLOW, a platform
SwatchOn
where various entities, including Albertsons and
Provides a comprehensive digital marketplace that connects fabric wholesalers to
Procter & Gamble, can share transport data so
international designers, with a focus on sustainability
that goods can be moved more quickly and cheaply through the country.
Tengiva Digital supply chain platform that enables real-time and direct online sourcing of textiles for apparel brands
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Supply Chain Transformation
Logistics Automation Tapping into automation to streamline logistics from warehouse to doorstep
In recent years, logistical operations have been challenged by surges in e-commerce, tight labor markets, and ongoing supply chain issues. Resilient logistics relies on the ability for the chain of actors to respond to demand and disruptions quickly and cost-effectively. Innovations in automation and AI technology offer new solutions that strengthen logistics against future crises. In the second quarter of 2022, companies ordered a record number of robotic machines valued at $585 million—25% more than the same quarter last year. Warehouse robotics and autonomous vehicles allow companies to boost efficiency and mitigate the impact of labor shortages. However, bigger strides in automation in the long term will depend on advancements in AI and regulatory changes on a national level, such as the sanctions on unmanned vehicles and robots that currently exist in the US.
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Supply Chain Transformation
Logistics Automation
Innovations + Applications
Example Homeware giant Wayfair
Example
is testing out autonomous
Amazon has developed its
trucks for their furniture
first fully autonomous
deliveries. In a
mobile robot called
partnership with AV
Proteus, which will be
company Waymo and
AUTOMATING TRANSPORTATION MODES
deployed in fulfillment centers and sort centers to
WAREHOUSE ROBOTICS
lift and move package
Robotics companies are bringing their technology to warehouses to optimize the picking, packing, and labeling process by cutting down on time and errors. Warehouse robotics also have the potential to boost workplace wellness by freeing warehouse employees from arduous and dangerous tasks.
new robotic work cell,
As truck driver shortages continue to affect supply chains, autonomous vehicles—many of which are electric—may soon fill in these labor gaps. Autonomous and semi-autonomous drones and mini-vehicles are also being tested on a wider scale for local last-mile delivery.
carts. Additionally, their
Cardinal, wields AI and computer vision to pick and sort packages, which can reduce physical stress and possible injury to warehouse employees.
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transportation services company J.B Hunt, autonomous trucks will be trialed along shipping routes in Texas. The initiative is part of a Waymo division focused on delivery technologies called ‘Waymo Via.’
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Supply Chain Transformation
POINTS TO KEEP IN MIND
Logistics Automation
Resources
Berkshire Grey Offers robotic solutions for order fulfillment and warehouse operation
Einride Swiss company newly approved by NHTSA to operate autonomous electric trucks in the US
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While most fully autonomous vehicles are not yet authorized for use on public roads, many are operated today with human assistance, and
Geek+
legislation allowing for greater autonomous
Beijing-based robotics company leading market share in global AMR
operation is expected in the US by 2025.
(autonomous mobile robots) for logistics
GXO Logistics
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Global logistics solutions company deploying intelligent robotics to help
Providing local communities with reliable jobs continues to be an important social benefit of
businesses automate logistics operations
supply chain operations. Be mindful in utilizing autonomous robots and vehicles to promote safer environments and fill in labor gaps, rather than
Udelv
entirely replacing your human workforce.
Unveiled the first cab-less autonomous electric vehicle for multi-stop delivery called the ‘Transporter’
Waymo Via Autonomous vehicle manufacturer Waymo’s freight transportation and goods delivery division
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Fashion Tech Series Explore the rest of the series
NEW AGE OF DESIGN
THE EVOLUTION OF RETAIL
MARKETING INNOVATIONS
Deep dive into the new
Explore the innovations that are
technologies that are pushing the
enabling businesses to meet
learn about some of the hottest
boundaries of creativity, such as
customers where they are,
tech topics and what they mean
AI-aided design and collaboration
whether it’s in store, hybrid
for the future of consumer
in extended reality (XR) worlds.
environments, or digital worlds.
engagement.
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From Web3 to the metaverse,