Consulting Report to Start a Fast Fashion Clothing Manufacturing Company - Coursework Example

Consulting Report to Start a Fast Fashion Clothing Manufacturing Company November 07, Table of Contents Consulting Report to Start a Fast Fashion Clothing Manufacturing Company 1 November 07, 2012 1 Part 1. Identify Consulting Opportunity 3 Part 2. Structure and Key Steps to implement the plan 6 Conclusion 10 References 11 Part 1. Identify Consulting Opportunity The consulting opportunity identified is for a company that distributes Fast Fashion items of women and gents clothes in UK. The term ‘Fast Fashion’ is used to describe the process of copying fashion designs shown in the latest fashion shows across the world, quickly manufacture large number of such items and then distribute them at very economical prices to consumers who cannot afford the high prices of a branded fashion house such as Gucci or Yves St. Laurent (Ferdows., 2004). 1.1. Outline of the opportunity Fast Fashion is a type of disruptive business process. In this process, smaller firms and lesser-known designers copy designs, fabrics, materials, colours and other distinguishing features from the products of well designers who display their styles in fashion magazines and in fashion shows. These designs are then given to small and independent firms based in China, Vietnam and other developing nations where labour is economical. These firms are equipped with modern machines that produce the items very quickly and in large volumes. Original designers such as Dolce and Gabanna may take up to 18 months or more to manufacture their designs. The fast fashion firms use mass manufacturing and distribution methods to productionise the designs in just a few weeks (Fiorito, 2009). The fast fashion sector is growing at a rapid pace and it fills the need of men and women to wear affordable designs and clothes, too look good and be presentable. In 2010, Fast Fashion sector was worth 27 billion GBP and it makes up 12% of the UK apparel market. While a large number of Chinese manufacturers and suppliers are present, a number of established brands have also become fast fashion retailers. Some of the more popular ones are Zara, Uniqlo, GAP, H&M and others. Some top fashion houses and retailers have also adopted fast fashion methods to fill their displays with affordable clothes. Some of these are New Look, Top Shop, Asda, Armani Exchange, Abercrombie & Fitch, Forever 21, Urban Outfitters, MUJI, Comme ça ism, C&A, American Appeal, Aeropostale, American Eagle Outfitters, United Colours of Benetton and Next. Other reputed brands are also using some principles of fast fashion by getting their outfits manufactured economically and quickly from China. These brands include Mark One, Burton, BHS, Evans, Dorothy Perkins, Wallis and many others. Clearly, fast fashion has caught the fancy of small fashion houses and leading designers (WGSN, 2011). Fashion has two distinct genres and these are Haute Couture or high fashion and Mass or Fast Fashion. Haute Couture is designer clothing where designers take up limited designs of their apparel and very few items are produced. Besides being custom stitched, these items are very expensive and an evening dress for women by a designer such as Dior or Armani would cost more than 50,000 GBP. These exclusive items are also displayed in exclusive and branded fashion stores on high street in selected cities and capitals. Customers who wear such clothes include celebrities, movie stars, rich business people and socialites who move in their own limited circle of friends. The genre of fast fashion includes apparel used for office wear, leisure and eveningwear, formals, sportswear and other items. These are affordable and cost from 30 to 80 GBP per item. There are for everyday use and for middle class people, students, working professionals who want to look good but who cannot afford the high rates of Haute Couture designs. In many cases, fast fashion items are copies of the high street fashion items with some improvisations and additions (Tungate, 2005). This report will present an idea to start a fast fashion brand tentatively named as “E&A” or Eves&Adam. The business will be based on the model used by Zara and other such firms. The proposal will be to start a fast fashion house that has an in house team of experts to copy patterns from fashion magazines and catwalks of fashion shows. These patterns will be converted into designs with measurements for cuts and fabric selection and stitching. The designs will then be emailed to selected apparel stitching firms in China and other places. The stitched apparel will then be shipped back to UK and marketed, distributed through existing dealers and retailers. Target for the clothes would be teens and working professionals from middle class families who would have a budget of around 50 GBP per dress (Fiorito, 2009). 1.2. Reason for using Consultancy Approach Reason for using consultancy approach is because consultants offer special knowledge, experience and contacts that an established firm or a start up would not have. The consultant by virtue of his work would be exposed to many business practices and he would have a knowledge of the field (Simon Burtonshaw-Gunn, 2010). An in house team would be confined to their daily work and they would not have the depth and breadth of knowledge that a consultant has. The consultant is able to anticipate the challenges and provide a strategy to counter them (O’Mahoney, 2010). The chances of success are better when a consultant is hired for a specific job. The proposal requires an understanding and experience of supply chain, outsourcing and marketing. The in-house team would be experts in design of apparel items but not in other skills (Newton, 2010). These are the main reasons for using a consultancy approach. Part 2. Structure and Key Steps to implement the plan This section discusses the key steps and the overall strategy to implement the plan discussed in Part 1. The methods used for the consulting assignment, steps used and the challenges, opportunities and barriers are presented in this section. 2.1. Key stages of the consulting assignment In the consultation assignment process, a number of steps are involved in selecting the consultant. These involve advertising for a consultant, creating the requirements for the assignment, selecting the consultant, finalising the contract and then awarding the contract so that the consultancy work can start. This section presents the stages of the consulting assignment after the consultation is started and these are as given below (Montgomery, 2008). Requirements Analysis: The consultant meets with the management of the client organisation to understand the requirements, defines the goals and objectives and discusses methods to measure the achievements. This requirement analysis is important and the final document must be signed with a formal agreement so that disputes are avoided in the later stages. In this case, the requirement is to set up outsourcing centres for the stitching work in China (Montgomery, 2008). Data Collection and Analysis: Based on the requirements, the consultant would then start to gather data about requirements. Data may be available from in house or external sources. The data is gathered and it needs to be analysed and interpreted. In this case, the consultation will obtain details of various plants available in China, short list the most appropriate ones based on the rates, turnaround time and quality of work. These will be assessed for the machinery, readiness, accessibility, supply chain effort to send the raw materials and receive the finished goods and other activities (Montgomery, 2008). Prepare report with recommendations: Based on the data gathering and analysis, the consultant would prepare a management report. The report would list the possible choices for outsourcing, cost of the operation, lead-time and other financial and business impacts. The possible actions and alternatives will also be given. The management may call for additional information and clarifications. These will be studied and another version of the plan can be given (Montgomery, 2008). Management decision: The management can take a decision on outsourcing and give the permission to begin the work. This starts the first phase and the consultant may need to go to China along with staff form the customer to finalise the details and begin work (Montgomery, 2008). 2.2. Main issues The main issues for E&A relate to the sentiment against outsourcing of work to China and other low wage nations, the market saturation of Made in China clothing that is even cheaper than fast fashion goods, change in customer tastes, lifestyles, and increasing government scrutiny against import of such cheap clothing and other items. There are also issues of copyright and IPR violations and a few large designers have filed suits and law cases against fast fashion houses that copy designs and sell them in the market (Russel, 2008). Another major issues is that many of the Chinese and Vietnamese firms copy the design that are given to them and they set up other factories where more items of the same design are manufactured furtively. These items are then sold in the open market in Europe and other nations. Customer loyalty is very important for a brand to succeed. By merely copying the designs and selling them, customer loyalty will be reduced. Since many Chinese factories use underage and child labour besides paying very low wages for the workers, many people form Western nations may not be willing to buy such products (Russel, 2008). However, all fast fashion producers face these issues in the initial stages. By proper advertisement and with attractive prices, good designs and frequent update of stock, customer loyalty in the stores can be increased. 2.3. Breaking the project into manageable stages Any large project must be broken up into manageable smaller stages so that milestones can be set, achieved and progress measured at short intervals. Milestones used to measure the progress should usually be achievable within a month. For the E&A case, there are two sides to the project. One stage is setting up a design team and a marketing and distribution network in UK. This stage will essentially look after tasks like finding the designs to copy, adopting the right process to copy the designs for the cutting and stitching work, sending them to China for stitching, receiving the complete products and then distributing them for sales in local stores of UK (Maynard, 2006). The other stage is outsourcing of work to China and other nations. Many of the South East coastal districts of China have become hubs of manufacturing. A large number of industries and industrial estates have been established in this region. Trade bodies and government departments are set up to aid foreign nations that want to seek outsourcing opportunities. E&A can short list the industries based on their capacity, machines, ability to manufacture the required volumes, total price until the products land in UK and then negotiate the amount and fix the deal (Maynard, 2006). 2.4. Challenges, opportunities and pitfalls The proposal has a number of opportunities, challenges and pitfalls. These are discussed as below (Kiechel, 2010). Opportunities: E&A can use the manufacturing capacities of China and other Asian nations to get the work done at very competitive rates. Excellent and efficient supply chain and logistics can send the raw material by ship and further transport by rail or road to the factories in China. The return consignment can also be brought back by the same lines and estimates for a shipment to arrive from China to UK are less than two weeks. Urgent deliveries can be obtained by air cargo at discounted rates. Challenges: The field of fast fashion sees a number of players, small and local who try to get apparel stitched either locally or from China at very competitive rates. This in turn means increased competition. To overcome these local challenges E&A needs to develop adequate marketing and branding strategies. Sponsoring local fashion shows and models is one method o reaching a wider customer base. The outsourcing model of China will work effectively when there is sufficient load and a minimum order quantity that runs into thousands of pieces. Small lots and work orders drive the prices up. Pitfalls: Some pitfalls possible are that the Chinese firms that take the work often subcontract the work to a large number of smaller firms. This can result in variation of quality, inconsistency in dress sizes, mismatching of patterns and other issues. In UK, customers may not be willing to buy from E&A if rivals indulge in intense negative publicity. Conclusion The paper has examined a proposal for a consultancy assignment to set up a fast fashion brand in UK. The proposal was given in two parts. The first part explored the meaning and concept of fast fashion. The second part discussed the methods of outsourcing the manufacturing and stitching to China and other low wage nations from Asia. References Ferdows. K, 2004. Rapid-fire fulfillment. Harvard Business Review, 82(11), pp. 36-45 Fiorito, S. S., 2009. Quick response in retailing: components and implementation. International Journal of Retail and Distribution Management, 23(5), pp. 12-21 Kiechel. W., 2010. The Lords of Strategy. MA: Harvard Business Press O’Mahoney, J., 2010. Management Consultancy. Oxford: Oxford University Press. Maynard, J., 2006. Fashion Buying and Merchandising: the principles. Thorpe-le-soken: Jonjaqsaw Montgomery, C A., 2008. Putting Leadership Back into Strategy. Harvard Business Review, 86 (1), pp. 54-60 Newton. R., 2010. The Management Consultant: Mastering the Art of Consultancy. London: Richard, Financial Times Series. Russel, B., 20 August 2008. Peers criticise fast fashion. [Online] The Independent. Available at http://www.independent.co.uk/news/uk/politics/peers-criticise-fast-fashion-902889.html [Accessed 7 November 2012] Simon Burtonshaw-Gunn, 2010. Essential Tools for Management Consulting: Tools, Models and Approaches for Clients and Consultants. London: John Wiley & Sons Tungate. M., 2005. Branding cluster sheet: Fashion Brands: Branding Style from Armani to Zara. Kogan Page Publications, USA WGSN, 2011. WGSN UK Fashion Report 2009. [Online] Worth Global Style Network. Available at [Accessed 7 November 2012] Read More