The Impact of ERP on the Apparel Industry
In 2023, the textile and apparel market in India was valued at US$ 197.2 billion. The IMARC Group projects that the market will expand at a compound annual growth rate (CAGR) of 12.6% from 2024 to 2032, when it reaches US$ 592.7 billion. Some of the major drivers driving the market include the growing demand for high-end clothing and footwear goods, the number of government initiatives to empower weavers that are being launched, and the growth of sustainably sourced and ethically sourced materials.
This encouraging expansion of the garment sector is only going to help you build your company and position yourself as the top choice for clients and staff.
Are you curious about how you can accomplish that? Using enterprise resource planning (ERP) to streamline your business procedures would be a smart place to start.
You might be wondering why having an iERP is essential for the expansion of the company. Do not worry; all of the solutions to your inquiries can be found in this post. Now let’s get going!
Why Does the Apparel Industry Need an ERP?
While it’s true that technology has simplified business procedures, many people still find the apparel industry to be complicated. Considering that running a firm requires you to oversee numerous departments.
Whether a seller utilizes a 3PL or has its own warehouse, accurate inventory management is crucial. Knowing that “blue shirts are in aisle 12” is insufficient when there are dozens of different styles, sizes, and blue hues available. Managers must always be aware of precisely what is and is not in the warehouse.
Many in the clothing industry oversee too many departments independently in an attempt to automate operations, which wastes time and burns a hole in your wallet. Consider that you need to configure ten distinct systems. Accounting, warehousing, order management, customer data collection, payroll processing, leave and attendance tracking, and other functions are handled by multiple systems. What if you could handle everything above in one location?
One such option that has saved the day for you is ERP.
Are you curious about how? The following is a list of advantages that owners of clothing businesses shouldn’t pass up.
What Are Typical Challenges in the Apparel Industry and How Can ERP Help?
Your operational and administrative costs can be lowered by up to 15% when everything is organized, since human errors are decreased, time is better controlled, and employee satisfaction rises. Here’s how you can get that done with an ERP system.
Simplify Processing of Orders and Returns
Daily order and return processing is typical in the clothing industry, especially in the retail sector. For your clothing company to manage these procedures with ease, you must have a strong tracking system in place.
Order tracking and management are standardized in the garment industry with feature-rich ERP software. You can predefined terms for returns, package tracking, shipping, discounts, account credits, and other associated operations with this user-friendly system. This streamlines the procedures, increasing the number of deliveries that are made on schedule and enhancing the handling of returns.
Minimal Operating Expenses
Quick and effective work distribution: Rich features and automatic order generation are two aspects of a sophisticated ERP software for the clothing manufacturing industry that help streamline operations.
It enables you to manage small-scale batch runs, track order status, modify BOMs and designs, facilitate the simple transfer of BOMs to work orders, track the goods along their path, and carry out a variety of tasks in an efficient and methodical way. This encourages improved organization, time management, and worker productivity.
Planning for material requirements: The clothing sector must adapt to the ever-changing, dynamic needs of its clientele. To prevent stock outs or excess inventory, producers can have a comprehensive view of their materials and resources with the help of an ERP system. Manufacturers may quickly and wisely adapt to change by viewing company data in real-time with ease.
Decreased Stock-Outs
ERP software for the apparel manufacturing industry enables you to keep the proper mix of merchandise throughout the entire company while understanding your bottom line costs. The secret to methodical management is a mobile and agile warehouse management system that is integrated with a manufacturing enterprise resource planning system.
Minimal Administrative Expenses
An ERP system simplifies procedures to lower the amount of workers required to perform transactions and stores all client information in a single database.
ERP lowers manual entry and mistake rates while assisting manufacturers in automating and responding to customer requests and queries as well as providing real-time feedback.
An ERP system eliminates employee data paperwork, the need to enter data again for billing purposes, the requirement to record data on sheets, time wastage, and paper form loss.
Your operational and administrative costs can be lowered by up to 15% when everything is organized, since human errors are decreased, time is better controlled, and employee satisfaction rises.
Accuracy
ERP allows authorized users to work from any location in the world while receiving correct information. This promotes timely decision-making efficiency and strengthens relationships with suppliers, clients, and colleagues.
What Difficulties Exist in the eCommerce of Apparel?
Since the eCommerce sector has taken over the market, it is important to highlight the difficulties and come up with solutions.
Handling Variations in SKUs
As a fashion company or retailer, you can sell a variety of products depending on the season and category. Thus, you might have to deal with hundreds, if not millions, of SKUs. Keeping track of inventories and even listing on new e-commerce platforms may be somewhat difficult because of this.
If you sell t-shirts, for instance, you might offer them in various sizes (XXS, xs, s, m, l, xl, XXL, etc.). These sizes will also come in various colors and patterns. Every one of these variants requires its own inventory; keeping track of them all by hand is difficult and complex.
High Rates of Returns
When compared to other eCommerce sectors, the fashion and apparel industry has the greatest percentage of returns. Sixty-seven percent of consumers look at the returns page before buying. And whether they are returned in-store or online, apparel and shoes are the most often purchased items.
It costs money to move inventory back and forth, from the warehouse to the client and back. Sorting returned goods and paying high logistics costs are likely to be incurred if your return procedures are not streamlined.
Out of stock Because of Poor Inventory Management
Because inventory is spread across several sales channels, it is challenging to guarantee that products will always be available on every platform. On the other hand, manually updating each platform when a transaction is completed and keeping inventory in one location can be quite labor-intensive.
One of the responsibilities of a warehouse operator is to sort through all of the products that are kept in one spot or in central locations for distribution and warehousing.
It’s challenging to effectively identify products that need to be delivered and expeditiously process millions of products from many brands and providers. Keeping track of stock levels for every product is similarly hard. This exacerbates stockouts, delivery delays, and problems with customer retention.
What are Some of the ERP Features to Solve Apparel eCommerce Problems?
ERP benefits apparel eCommerce in the following areas in addition to facilitating the seamless operation of the B&M clothing sector.
CRM
CRM integrated into ERP that syncs with your online store can revolutionize your business. A successful eCommerce company needs to be able to track activities at every stage of the sales cycle and have an efficient, standardized method for managing leads, contacts, opportunities, and customer accounts.
Put differently, you require a CRM system that integrates seamlessly and provides synchronized, real-time data from a single source to all departments. You may easily contact your customers with offers like sales, discounts, and exclusive promotions by creating a customer database within the integrated solutions. These promotions are created inside the eCommerce platform, and the ERP system recognizes what it is receiving and records it for future reporting. An environment for omnichannel commerce is also produced by the integration of CRM and eCommerce ERP.
Management of Shipping, Distribution, and Warehouse
The most precise and effective way to handle your shipping, distribution, and warehouse management requirements is to use an integrated eCommerce ERP system, just like you would with inventory management.
Wave and batch selecting, packaging, receiving POs, putting away, transferring, and physical counting are all parts of the complex distribution process. These tasks become mechanized with ERP.
Employees in warehouses may complete activities with phones or tablets, and errors are eliminated through lot and serial number tracking.
Management of Product Information
It is essential to centralize your product information within an eCommerce ERP solution since you sell things to clients in a different way. This data may pertain to your suppliers, product costs, customer-specific costs, or even alternatives that come with your offering.
You may distribute your information to numerous sites by managing it in one place. ERP also facilitates audience segmentation and information distribution tailored to individual audiences.