The apparel industry is in a high state of fluctuation. Everywhere we look, news stories decry the upheaval in the market, citing the retail apocalypse, notable bankruptcies, shoppers suffering from financial turmoil and uncertainty, and millennials seeking experiences over products. It seems that there is little optimism about the industry today, and no one has a clear vision for the future.
The apparel industry goes beyond brands, retailers, and online e-tailers. There is a vast, complex, always-changing value network of producers, facilitators, and managers across the globe, who together form the global apparel manufacturing supply chain. Amidst the sea of challenges, participants in the value network must discover how they can capture attractive profits for the future. There’s certainly not a lack of innovation. In nearly every stage of the global apparel manufacturing supply chain, technologies such as artificial intelligence, 3D printing, augmented reality, and Internet of Things are dramatically impacting the way customers, factories, designers, and retailers respond to global retail demand. Yet none of these innovations have given anyone a decisive competitive edge.
Given the massive stakes at risk, managers are in need of a framework that will allow them to make accurate predictions about the future, so that they may, in turn, make the best decisions for their companies. In other words, managers must turn to theory. Data can help inform predictions, but data alone is insufficient. Sound theories provide a framework to translate data into actionable decision-making.
The Theories of Disruptive Innovation, conceived by Harvard Business School Professor Clayton Christensen, are powerful tools toward this end. Within this toolkit is the Theory of Interdependence and Modularity, which illustrates not only why the global apparel manufacturing supply chain is experiencing its current challenges, but also predicts how companies can avoid the ominous threat of commoditization and capture attractive value going forward.Download Paper