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Broken Down Guide To ERP for Apparel Industry

NEW YORK, NY - JUNE 19: Clothing sits on display inside an American Apparel store on June 19, 2014 in New York City. American Apparel's board has voted to remove the company's controversial CEO, Dov Charney. (Photo by Andrew Burton/Getty Images)

Running an apparel business isn’t easy. From managing processes such as sourcing of raw materials, manufacturing and quality control to controlling warehouses, distribution, accounting, and sales – there’s a number of operational complexities to deal with.

ERP software can help apparel businesses to handle their operations efficiently by organizing different types of data onto a single, centralized platform.

Benefits Of Using An ERP In The Apparel Industry:

1. Lower Costs

For any business that wants to grow, the goal is often to minimize costs, maximizing profit. ERP software can help businesses improve speed, quality and service across the board. By being able to automate and streamline existing processes, companies of any size can save money.

2. Centralized Control

ERP software can help control expenses and monitor performance by providing a comprehensive overview of individual departments, such as shipping, marketing, warehousing, accounting, and customer service. This helps companies track the performance of their different divisions and visualize how those operations set up correlate.

3. Increased Sales

The apparel industry is one of the world’s largest industries, with 2016 revenues exceeding $1.1 trillion, and representing 9 percent of the world’s entire global trade. The trend is expected to grow as technological advances further connect people across the world.

Successful companies depend on the positive flow of goods to keep their operations running smoothly, and they have to anticipate product demand. This is why an ERP system is essential in helping companies keep up with the changing demands of customers around the world.

4. Faster and Easier Reorder Process

One of the major operational advantages of an ERP system is the ease of keeping track of inventory levels by attaching products to SKUs. Companies will always have an idea of how much inventory they have on hand and what products they need more of. This helps them make informed decisions about production and manufacturing.

5. Enhanced Collaboration

A major challenge for apparel businesses is their need to collaborate across their supply chain. Multiple partners and suppliers are needed before a garment can hit the market. ERP software can help the communication process among partners by providing a unified platform where all data is safely stored and accessible by multiple team members.

6. Environmental Impact?

In addition to clothes, the textile industry also deals with waste and recycling. The textile industry produces 11.4 percent of generation waste and 4 percent of hazardous waste, according to the Department of Energy.

This puts an added economic burden on the industry, causing financial losses from additional overhead and the costs of waste disposal. However, the use of ERP is believed to reduce these impacts, since it can help find ways of conserving resources and reduce the amount of waste generated.

ERP for Apparel Industry – What to Consider?

When it comes to choosing an appropriate ERP solution, you want to make sure it is the right fit for your industry. And to ensure that, you need to weigh all the pros and cons of each ERP software.

ERP Implementation Challenges

1. Organisational Change

There will be a need for some executive management to get trained, which means that managers will be learning how to use the software. This training can last from a few weeks to a few months depending on the sophistication and complexity of the software.

2. Acclimation to the New Software

Once the initial training is done and the users have the program installed onto their desktops, the learning curve kicks in. User’s will need to learn all about the system and how to use it.

3. Integration

An ERP system is a complex array of programs, and to use it efficiently, it’s important to understand what each program entails and what its role is.

4. Dealing with Evolving Standards

ERP solutions will need to be periodically updated and maintained as industry standards evolve. Here, more than software, the human management factor needs to be considered, including how a company will respond to new certificates, standards, and regulations in order to keep its operations running smoothly.

5. Negotiation of Change Control

To work effectively, it’s important that the integration of ERP systems within a company is implemented properly and bolstered by clear standards, procedures, and guidelines about how to handle any given situation. For example, if a new business process is requested, but it doesn’t fit the ERP system.

6. Data Structure

Data mapping is as important as all the other aspects of ERP implementation methods. The new ERP will need to understand how all the data currently works in the company so that it can be integrated seamlessly.

7. Change Management Challenges

Change management is needed to implement ERP systems in a smooth and timely way. Implementation issues can lead to termination of staff and dissatisfaction among workers. The process should be properly assessed before it is given the go ahead.

Planning for Implementing ERP for Apparel Industry

Once you have fully weighed all the costs and benefits, you will be able to decide whether or not your company is ready for an ERP system.

In these early stages of ERP implementation, the most important things you need to do is to assess and analyze the current situation, evaluate your data management systems and needs, consider different ERP options, and finally set an achievable implementation strategy.

Step 1: Assess your current situation and your data management needs.

Step 2: Evaluate the different ERP options based on a number of criteria, such as the business size of the company, company specific requirements, and price tags.

Step 3: Set a realistic time frame that can ensure a smooth transition but not rush the process too much.

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