Process Innovation in the Global Fashion Industry

The nature of the fashion business requires novelty and speed, which can be effectively fulfilled through process innovation. Subsequent to Volume 3 on product innovation in the global fashion industry, this book is devoted to process innovation. Process innovation is an improved way of doing things across the entire supply chain, including management, to expand efficiency in terms of cost, quality, and service. Process innovation is all about enhancing speed, accuracy, and efficiency, which are often internal processes and therefore invisible to customers. Still, leading fashion companies constantly engage in process innovation because doing so allows their product innovations to become even more visible and effective. Yet hidden, process innovations can contribute to a company’s profit, thus serving as a means to an end, rather than being a stand-alone goal per se. With the advent of the Fourth Industrial Revolution, new digital technologies such as big data, artificial intelligence, machine-generated algorithms, virtual reality, robotics, and automation have become a reality and serve as an important means to develop process innovations in the fashion industry. Examples of process innovations include creating an agile supply chain, the Enterprise Resource Planning system, robot manufacturing such as Adidas’ speed factory, Stitch Fix’s subscription and styling service based on machine-generated algorithms, and using the programmed robot Chatbot as a customer service tool. Process innovation, however, is not always led by new technologies. Process innovations in the areas of administrative improvements such as work routines, information flow, and organization structures are often led by visionary leaders and human resources. Encompassing both hard- and soft-sides, this book aims to comprehend process innovation in a broader sense. In this book, you will find that process innovation occurring in the global fashion industry goes beyond the adaptation of new, innovative system and technologies. After the introductory overview in Chapter 1, Chapter 2 deals with Italian brand Patrizia Pepe that was established in the 1970’s as a micro family business, mainly using OEM (Original Equipment Manufacturing) for production. Patrizia Pepe evolved through continued innovation into a company worth 113 million Euros in 2016, with 289 employees. The company’s process innovation can be epitomized as “thinking organization,” which leads to product and organizational innovations, and “collaborative experimentation” with supply chain partners, which creates a more flexible supply chain. Chapter 3 focuses on Japanese lifestyle retailer MUJI’s process innovation. MUJI’s process innovation is unique in that its brand as well as the design concept itself is a process innovation through which MUJI provides customers with very simple products at reasonable prices, therefore making their products widely accessible to global consumers. Chapter 4 discusses leading swimming wear brand Arena’s process innovation in terms of its organizational structure, production, logistics, distribution, and IT management. While Arena is known for its innovative high-performing swimwear, its ownership has been transferred multiple times from Adidas to five different investment funds. The case shows how organizational changes – consolidation of separately-run offices in France, Italy and Germany to a single company headquarters in Tolentino, Italy - can improve operational efficiency. The case reviewed in Chapter 5 is American subscription and style service start-up Truck Club, established in 2009 and later acquired by high-end department store Nordstrom. Trunk Club not only introduced a unique business model (i.e., customized style service with a flexible subscription), but also innovated its process for offering customized styling for its clients through offering personal stylists online as well as in offline locations called Clubhouses, as well as utilizing machine-generated artificial intelligence. We hope this volume provides companies and academia alike with practical insights for enhancing process innovations among fashion companies. This book was made possible with the help of many brilliant individuals. Our primary and sincere thanks goes to the authors who shared in the common cause of bringing new knowledge to leaders in the global fashion industry, and who devoted their time and enthusiasm to this book. Each case was developed via one-on-one interviews with key informants, observations, and visits to stores and factories. Without the industry leaders’ inputs the rich information provided in this volume would not be possible.