Exchanges or returns due to issues in size or fit preference in online orders have been rising in the last few years. A survey by McKinsey noted that apparel e-commerce channels experienced a 25% return rate for apparel pre-covid (Mckinsey, 2021). These trends motivate businesses to innovate and alter traditional models to more holistically cater to consumers’ needs. Additionally, the growing awareness of diversity and inclusion is disrupting the “one-size-fits-all” approach of the fashion industry. Conventionally, apparel brands have a few standard sizes for a specific style produced in large numbers. This usually leaves out consumers who require clothing made true to their size and customized to their needs.
In 2019, Shahi invested in DXM, a software-as-a-service (SaaS) and manufacturing (MaaS) platform that enables on-demand manufacturing, optimized inventory management, lower lead time, and highly individualized garments at scale. The platform allows consumers to choose the design and trimmings of their clothes from anywhere in the world. Customization and on-demand manufacturing lead to better inventory management, lower returns, and established customer brand loyalty. This, in turn, means less waste and fewer resources used to make products.
“According to studies, the average number of garments produced per year has nearly doubled in the last two decades. Yet, the sell-through rate of full-price garments remains low, with a large portion of garments selling at discounted rates in retail stores. This is one of the biggest pain points and losses for brands and retailers – from an economic and sustainability point of view. The mismatch between what brands make and what consumers want can be resolved through custom, made-to-order production cycles. This was the genesis of DXM.” – Matthew Wallace, CEO, DXM.
The role of manufacturers in on-demand manufacturing
The fashion industry does not often see supply chain partners and brands coming together to work on long-term solutions. In the case of DXM, four of the world’s top manufacturers: Brandix, Busana Apparel Group, MAS Holdings, Shahi Exports, and a leading brand, Carhartt, came together in a pre-competitive, collaborative spirit to co-invest in the vision of disrupting business as usual. Trust and top management commitment played a central role in bringing this partnership together for all five co-founding members, who now compose DXM’s Board of Directors.
Although the problem of low sell-through rates is a major issue for retail, solving it requires the involvement of mass manufacturing in delivering consumer preferences. Mass-producing manufacturers have tailored their factories and production systems to large-volume and standardized assembly line production. In the DXM model, manufacturers have to switch to custom, made-to-order, on-demand production at scale. But what does that look like?
Shahi’s pilot with DXM and Carhartt
Between July and August 2022, Shahi partnered with DXM and Carhartt to pilot an on-demand production model to manufacture 295 pairs of workwear denim and non-denim pants on a rolling basis, delivered directly to the end consumer within 3 to 8 days of them placing their order. These pants were available to order for loyal Carhartt consumers.
Carhartt integrated the DXM platform into its website, where consumers could design their pants with a myriad of customization options, including including the fit, type of back and leg pockets, kick panels, gusset, and inseam, among many other elements. The consumer could also see the product in 3D and answer a series of simple questions to determine their fit virtually. The order was processed with all the digital assets required to manufacture the product in under a minute. Our manufacturing facility received the complete design pack and information from all these orders in real-time. This is very different from the current scenario, wherein Shahi would receive tech packs for bulk orders created based on forecasted demand.
With the on-demand model, a single, specialized sampling tailor is assigned to make every order from start to finish. For a single tailor to stitch an entire garment with multiple customizations requires them to be highly skilled and experienced. Usually, factories are tuned towards producing millions of pieces of the same garment, with perfection and the highest efficiency possible, using an assembly line set-up where each tailor only sews one component of the garment and passes on the garment to the next.
Each garment is unique in the direct-to-consumer, on-demand model, with multiple customizations. This requires a rigorous quality assurance protocol ensured by our teams. A quality supervisor is designated to check the garment against a pre-made checklist from the pattern to the end garment. Each garment is also tried and photographed on a dummy of similar proportions and uploaded on the DXM platform. After the quality inspections, the pants are directly dispatched to the customer’s indicated address.
The result: a zero-percent rejection rate during the pilot, i.e., no returns from the end consumer.
The versatility and flexibility of the DXM model can disrupt the market. No limit is defined on any of the measurements on the customizations offered to the consumers, making the product truly inclusive. For instance, the waist sizes of the pants ranged from 28 to 55 inches on the orders we received.
With these advantages that the platform offers, we were able to reduce the lead time of an average of 6-8 months to
- Minimum 2 to maximum 8 days for non-denim pants
- Minimum 3 to maximum 9 days for denim pants
Usually, denim pants have a longer lead time than their non-denim counterparts due to the time required for the particular wash selected by the customer.
Collaboration for the future
Demand forecasting remains one of the biggest challenges for the fashion industry— one which has ripple effects throughout the supply chain affecting production planning in all tiers and creating products that may not sell at full price.
On-demand manufacturing and real-time forecasting are hence gaining more traction. Manufacturers, brands and retailers, and technology platforms like DXM must work closely together to drive this change. Brands’ long-term commitment toward their suppliers is critical for manufacturers to invest in changing their production systems. Small batches of highly customized products can be significantly more expensive to produce as they require more resources and highly skilled workers. Here, the willingness of brands such as Carhartt to support this type of inclusive one-of-a-kind product is essential.
As our DXM Project Lead at Shahi, Sathish Kumar Sathya, Vice President, Operations, summarizes:
“With the Impetus on digital in the current situation, we are working towards focusing on direct-to-consumer channels, and our approach is to build a strong strategic partnership with DXM to ensure higher visibility. We are further expanding our pilot with Carhartt, as this expansion strategy was always part of the long-term plan. We are open to manufacturing on demand with other brands and retailers to do more pilots in the coming months.”
The pilot has allowed Shahi to implement new tools to innovate our manufacturing model and develop our skills to become more agile and adaptive. The pilot’s success comes primarily from the dedicated and coherent work done by the operations, marketing, and sampling team to create these products — lowering the lead time while maintaining its quality.
We look forward to a future where clothing can be produced with more inclusivity and visibility on demand, leading to less wastage and more efficient use of resources.
The DXM-integrated Carhartt portal is now live. You can explore and order your own customized pair of beloved pants view more.
For product queries, please get in touch with od@shahi.co.in
