ERP Systems and Fashion Production 

by Merlin Hernandez

In a recent consultancy with a small production contractor in the fashion industry, the issue of whether some modern production management technology will help to solve some of their scheduling and delivery problems came up. My response was Yes and No. ERP systems like SAP would bring some advantages to large apparel manufacturers who have control of their production facilities and schedules. But contractors who service small design houses may well find that expensive technology would be of little value to processes where aggregate planning is often hampered by the structure of the business at this end.

Small fashion houses work within a high mix, low-volume job shop production structure that processes several diverse low-quantity jobs, using limited shared resources. Jobs have multiple clients, different due dates, and varying material and resource requirements. Even with the best efforts at consolidation, production runs remain small and varied. Customization needs tend to compound the challenges to planning beyond the late summer fashion season when the highest volumes might be produced. For the rest of the year, it is often difficult to predict order quantities, due dates, material needs, and process requirements. This often leads either to workflow bottlenecks or starving from a high percentage of work-in-progress and long lead times at one interval to uneven and low capacity utilization at another.

The synchronizing of supply readiness and production planning is another major challenge since there may be little consistency to raw material needs, and availability cannot be leveraged to any great extent with a supplier. Forecasts are often qualitative and analogical with a high potential for inaccuracies and, at best, offer very loose information on supply chain needs. Even new seasonal collections that usually bring the highest production levels do not have a demand history and adjustments to volumes are constantly being made to avoid those surplus items that may carry over to another season but are subject to a fickle client base, and high level of competition.

In this scenario, production needs are of mixed variability and shifting constraints and tend to have low process repeatability. Production planning is therefore a feature of JIT production along with endemic resource-constrained production schedules among small designers. It calls for real-time scheduling, a strong change orientation, a lot of firefighting, and what-if analyses e.g. a contracted production house facing a blocked run for one client due to any number of delays will quickly shunt the run into buffer (hold), do a quick loading of another job. But the contractor must be prepared to shift again the next day if that is indicated (cancellation, change order, new order from preferred client with earlier due date).

It requires daily, sometimes twice daily, short production meetings in order to respond quickly to an altered situation through an analysis of the impact of an emerging constraint (time, raw material), and some very short run contingency strategizing e.g. “what if” Job 2 takes longer than anticipated and threatens Job 1 delivery? Jobs are scheduled based on the constrained resource, using a due date, and preferred customer priority. Manual scheduling on a very visible scheduling board with start and release dates, identified constraints, and “what if” alternatives guide delivery efficiencies.

SAP-ERP software has a special version for small and medium sized firms that could have some application in designer fashion. It can integrate and analyze finances, asset management, HR needs, customer service, quality and sales management, and even some facets of manufacturing reporting. But I am not sure that it would prove valuable to the dynamic and unstable nature of the more practical scheduling problems of the small contractor production environment as it is an area fraught with too many uncertainties that may not lend themselves to smoothing. 

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