Fashion Tech Series: Supply Chain Transformation

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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,