Strong Supply Chains Through Resilient Operations

CHAPTER 3Principle 2: Build Resilience Against Demand Shocks by Using Your Operations to Create Customer Value

Lessons from Fast Fashion

Any industry is fascinating to those inside of it. But sometimes an industry is fascinating for being the first to transform—in a transformation that will soon hit other industries.

From 2002 to 2017, the global apparel industry had a compound annual growth rate of 8%. Global textile revenues grew from about $1 trillion in 2002 to almost $3 trillion in 2015. And during that time, the number of garments purchased annually grew by 60%.¹ You could view this development as a triumph of globalization: companies could make clothing more cheaply, and people everywhere had more money to spend on it. In the same way that Henry Ford made cars that his employees could afford, the global fashion industry cut costs to expand its audience. (There's also a dark underbelly to this story in the form of horrific performance on environmental, social, and governance (ESG) issues, which we will address in Chapter 6.)

But this was not a traditional lean success story. In fact, what drove the explosive growth was a revolution in how to create value for the customer. Obviously all apparel brands have always been customer‐focused, because you need to make clothing that people want to wear. But traditionally, that development cycle happened in a fairly rigid 24‐month timeline. A fashion designer—an artist—would create a look. It would be revealed in an haute couture ...