Third shoe production speed

Twelve deliveries per year for clothing manufacturers is as common as providing customers with POS materials and consulting support. Shoe manufacturers are slowly but surely moving in the same direction. These are the results of a study of the needs of suppliers and buyers, conducted by the management of the Italian exhibition Expo Riva Schuh and marketing agency Area Studi Diomedea.

The study was conducted over three seasons (18 months) at the exhibition and on the Internet. During the polls, more than 7 thousand visitor profiles were processed and 20 in-depth interviews were conducted with regular Expo Riva Schuh exhibitors. The survey involved Alfiere, Moda di Fausto, Nova Shoes, Planet Shoes, Rambo, Samoa, Tirabasso from Tuscany, Puglia and Marche, that is, from the main shoe regions of Italy.

The main goal of the study was to find out how the needs of exhibitors and visitors to exhibitions change in terms of placing orders, how and why they make decisions about placing an order.

As a result, a concept was proposed. fast production, similar to the fast fashion principle adopted by clothing manufacturers, and different from the traditional production of finished fashion (pronto moda). In the latter case, manufacturers work with non-branded products, applying stylistic trends that have already been identified, attract wholesalers and use long-term supply channels. In design, they focus on the best sellers of the season.

Rapid Manufacturing is a different type of company. They have a branded product that allows them to create mini collections based on one main style. This is not only a repetition or replicas of seasonal bestsellers, but also the development of their own models. As we said above, the principle is similar to the idea of ​​fast fashion - two main seasonal collections and several smaller intermediate ones, which are presented and delivered between seasons. This approach, however, does not exclude work on the traditional pre-order model.

Change scenario and process selection

To switch to fast production, it is necessary not only to update the product, but also to reconstruct all business processes. While companies, by trial and error, are looking for a solution to two global problems: an increase in fixed costs for participation in the fashion business and an increase in risk factors in terms of sales.

Over the past few years, distribution, communication and marketing expenses have risen. The number of samples in collections is increasing every year - this also places a heavy burden on the manufacturer. Investments in creativity are growing both in product design and marketing.

The store is gradually turning from a place of exchange of money for goods into a real “factory of values”. Business becomes more risky: sales start earlier, the volume of orders from one company decreases - this is a risk for the manufacturer; a large number of models are increasingly difficult to identify with the “heart” of seasonal trends and the brand - this is a risk for the buyer. Systemic risks (associated not with the activities of an individual company, but with the market as a whole), including macroeconomic changes, are growing.

In this situation, the rapid production model can be a good way to redistribute risks between collections and among various types of retail operators.

Combining Organizational Models

Now on the market are three business models of supply chain management.

Programmers. They use the traditional scheme of presentation of collections one year before the season and traditional channels of long-term supply.

Flexible. Adhere to the traditional pre-order system, but they have the ability to seasonal sorting to already made purchases. These companies do not have new collections between the seasons, but thanks to the flexible mechanism of orders and deliveries, they can additionally supply models. There are manufacturers who specialize in short-life products.

Fast manufacturers. Mini-collections are being prepared with extremely short delivery times - 15–30–45–60 days, depending on the type of product and order. Among these manufacturers, there are two categories of firms that use either an aggressive or a defensive promotion strategy. The first strategy involves foreseeing the needs of the end customer. These companies develop collections using momentary market trends, but taking into account client requirements. The defensive strategy is based on the release of off-season flash collections that can complement or replace the current regular collection, if it was unsuccessful for any reason.

What are the volumes of fast production?

Fast production in the shoe industry does not exist separately, most often it is integrated into the usual creative-product structure. In what proportion? The study showed that almost 43% of models are not exhibited during the traditional order time. Excluding sorting, about 25% of shoes released are sold out of season.

Among fast producers, 60% hold three presentations of the collection during the season, almost 20% - four; 29% represent more than 250 models (apart from those differing only in color) in addition to the main collection.

What motivates companies to choose fast production?

An increase in the number of models will inevitably lead to an increase in costs for the manufacturer and erosion of the buyer’s brand concept. It is difficult for him to place an order when the collection is very large and only a little in it. In addition, the buyer seeks to avoid mistakes - and the larger the order, the higher its probability. Manufacturers are experiencing similar concerns when trying to predict seasonal trends. These factors are increasingly becoming the reason for the transition to fast production, which allows more evenly distribute costs and investments during the season between suppliers and customers.

What are the risks associated with moving to a fast production model?

The main obstacle to the decision to switch to fast production, entrepreneurs consider the complexity of shoe production, which does not allow for the same sewing speeds as in clothes. The scale of companies - suppliers of raw materials (often micro-companies) and their financial weakness make it difficult to find strategic partners for organizing rapid production. And finally, the problem of coordination of all business processes, both inside and outside the company, which is one of the most important factors affecting the speed of collection production and delivery to its customers, causes serious concern.

Another problem that slows down production, respondents called the availability of raw materials and components.

Nevertheless, the first signs of rapid production of shoes have already appeared. And as experiments, they sew "blindly", without pre-orders from companies and sales statistics, determining the volume of production at their own peril and risk. Most often, such companies use an aggressive promotion strategy. This approach has weaknesses related to both the timing of the supply of raw materials and the cultural differences and limitations of the business environment in different countries. Therefore, only one of the four fast-manufacturing companies can afford to work “blindly”. However, they also have a volume of products that are not intended for a particular customer, is 26%. 52% of firms using blind manufacturing have an average lead time of 45 days.

Fast production in terms of buyers

Proximity to the sales market is the main competitive advantage in the face of reduced time for creative and production. Moreover, the ability to withstand delivery dates becomes a key factor for a buyer who decides to place an order in a particular company.

Among the visitors to the Expo Riva Schuh exhibition, 35% make purchases of quick collections, not losing sight of and collections of the next season; 9% said they were only interested in the quick collections available for immediate order.

Quick collections allow buyers, firstly, to improve the order structure and, secondly, to reduce the risk of residuals.

Most buyers (70%) order quick collections from the same manufacturers from which they buy the main ones. And for 30%, this is a way to protect yourself from short deliveries or deliveries made out of time by the main suppliers.

Fast deliveries are especially convenient for small retail chains and independent stores that have relatively few available funds for purchases.

Supplier selection factors (in%)

Deliveries in small but regular batches - 68

The ability to adapt new proposals to customer requirements in terms of colors, materials, accessories - 74

The ability of the manufacturer to track current trends - 79

The ability to purchase new models not only during sorting - 80

Manufacturer's Fast Delivery Guarantee - 88

The price segment of fast manufacturers needed by buyers (in%)

Advertising

Advertising of Business Global Expo LLC, Taxpayer Identification Number (INN) 7710961530, erid: 2W5zFJRB7Va

Massmarket - 11

Medium High - 34

Medium - 55

Who orders new seasonal collections from fast manufacturers at the exhibition (in%)?

Medium-sized chains (11–50 stores) - 18

Large chains (more than 50 stores) 18

Purchasing Groups - 9

Agents - 12

Wholesalers - 14

Specialized shoe retailers - 12

Specialized clothing retailers - 4

Small chains (2–10 stores) - 13

Who does the sorting of seasonal collections from fast manufacturers at the exhibition (in%)?

Medium-sized chains (11–50 stores) - 18

Large chains (more than 50 stores) 18

Purchasing Groups - 8

Agents - 6

Wholesalers - 19

Specialized shoe retailers - 15

Specialized clothing retailers - 4

Small chains (2–10 stores) - 14

The order of what type of raw materials and components causes the greatest difficulty for organizing fast production (on a scale of importance: from 1 “absolutely not important” to 5 “very important”)?

leathers of cattle - 3,5

Non-synthetic materials - 2,7

Synthetic materials - 2,9

Pads - 2,8

Arch Support - 2,2

Backs - 2,2

Insoles - 2,6

Soles - 3,5

Heels - 3,2

Accessories - 3,1

Fittings - 2,9

Types of Fast-Producing Companies

Delivery times of fast manufacturers

From 15 to 30 days –15%

From 30 to 45 days - 31%

From 45 to 60 days - 35%

60 to 90 days - 15% More than 90 days - 4%