IT Usage in the Apparel Industry
For an industry of this stature and size, the usage of IT by the Indian apparel industry has been woefully inadequate. North American and European apparel companies spend about 3 to 5% of their revenues on IT. The Indian apparel industry in contrast, has typically invested less than 1%.
Historically there have been many reasons for this low usage.
1) Earlier most of the software suppliers in the Indian market have been North American or European companies for e.g., in the case of CAD, the earliest vendors in the Indian market were Gerber and Lectra. In 1995 CAD solutions were available for about USD 45000! Today the same solution is available at USD 15000.
2) Earlier vendors had proprietary solutions that were not compatible with other applications. Customers who bought a CAD system had to buy it from the same vendor the next time; this was used for 'vendor lock-in’. Often this meant that the vendor had no incentive for quality support or for innovative research leading to reduced prices.
3) The small pool of professionals trained on IT applications of the apparel industry meant there were not enough people who could be recruited from the market in case someone changed jobs.
Fortunately for India, a lot has changed. Firstly, the Indian Software industry has come of age and India is widely regarded today as one among the hottest destinations for software engineering. Almost all software majors including IBM, Microsoft, and Oracle have engineering and R&D centers in India today.
Secondly, the Indian Auto-ancillary industry is a close parallel. This industry has emerged as a leading sourcing destination for automobile majors. Despite the mounting steel prices and the fact that steel is a major component of the automobile cost; the vehicle costs have remained stable. Are you wondering how? Well, this has been made possible because of IT adoption by the Indian spare-part suppliers. IT has enabled the Indian auto-ancillary industry to streamline their processes and aggressively cut costs. For the Indian apparel industry to emerge as the favourite outsourcing destination for leading brands and retailers world-wide, it needs to emulate the IT strategy of the auto-ancillary industry.
Thirdly, Indian apparel companies have grown from family run to professionally organized set ups, giving more emphasis on implementing IT solutions to increase the productivity and also providing us considerable domain expertise.
Finally, institutions like NIFT, ATDC, ALT, Pearl academy etc played a pioneering role in training large number of professionals for the industry.
Many believe it is only a matter of time before an Indian company scales to become the largest software company globally catering to the apparel industry.
In this scenario, it is only logical that the Indian apparel industry is able to derive benefits of the acknowledged strengths of the Indian software industry.
Indeed it can be argued that, investment in software to create a nimble enterprise that responds to external and internal customers in real time to reduce throughput times, costs and improve quality is India's defense against China's huge factories that derive benefits from economies of scale. This is especially true as India is likely to continue to excel in high value added styles of smaller order quantities.
There are already a number of functionally rich, user friendly software applications available in India. For e.g., REACH CAD, REACH Fashion Studio, REACH Merchandising Manager, REACH Cut planner etc are offered by REACH Technologies and are being used by over 450 clients across the country.
We are already witnessing the emergence of companies like REACH that offer
OPEN solutions: Software applications that will 'talk' to applications from other vendors as well.
MODULAR solutions: Software solutions that are part of a larger suite enabling the customer to choose to deploy what is required as and when required.
EXTENDED PRODUCT SOLUTIONS: Products do not deliver value on their own. Trained professionals in conjunction with the product do. So the vendor who brings to the table the best delivery and commissioning capabilities will have an edge.
RENTALS: Customers will increasingly expect to have solutions 'ON DEMAND' that is they need the solution for a specific time period. They are unwilling to make a capital investment but willing to pay for using the solution on as ‘Pay-As-You-Go’ basis.
Indian apparel industry will increasingly partner with the Indian software industry in its quest to become a global player in the post-quota era.
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