As a new generation of global Chinese enterprises, SHEIN has successfully occupied a leading position in the ever-changing international market environment by building and optimizing its flexible ** chain system. This ability to respond quickly and produce on demand enables SHEIN to design and manufacture trendy clothing that meets the tastes of consumers in a short period of time and quickly put it on the market. So, what kind of operating mechanism and management practices have created the extraordinary achievements behind SHEIN's flexible ** chain?
Founded in 2012, SHEIN started as its own brand, and at the beginning of its establishment, it took a path for brands to go overseas. Ask 10 random young girls on the streets of the United States, and maybe 9 of them know the SHEIN brand. On social platforms such as ins and Twitter, clothing bloggers are sharing grass with each other. The key to SHEIN's success lies in the adoption of the "small single quick reaction" flexible ** chain model, which not only leads the industry trend of on-demand production, but also is its core advantage that distinguishes it from its competitors.
The traditional garment industry usually plans new products according to the quarter, and merchants need to design, produce and stock up half a year in advance, which often leads to serious inventory backlog problems due to the long market feedback cycle. SHEIN innovatively adopts the flexible ** chain system of "small single quick response" (that is, small batch rapid response), which subverts this status quo. At the beginning of the design, the development of fashion trends was guided, but the starting orders were not much, mostly 100-200 pieces. After it is put on the shelves, it will continue to track the market reaction through multiple dimensions, and once any style has signs of popularity, additional orders will be added; If the response is mediocre, production will be stopped, effectively avoiding the risk of large inventories, and achieving more flexible and efficient operations.
Many companies try to adopt the "small single quick reverse" model to improve the accuracy and efficiency of orders, but there are few successful cases. The difficulty lies in the difference and imbalance in the level of digitalization between enterprises and enterprises. To achieve this model, the key lies in full-link digital management, from front-end fragmented orders to upstream first-chain production scheduling, covering design, measurement, ordering, production and logistics to ensure rapid response to market changes.
As one of the world's four major fashion brands, SHEIN not only builds its own digital underlying capabilities, but also empowers ** merchants to improve their digital operation and management level. It is understood that in the first week after the first business and SHEIN reached a cooperation, SHEIN will send someone to assist the factory in using the digital management tools of the ** chain, tutoring on-site operations, and helping it run through the process.
Based on SHEIN's digital flexible ** chain, many enterprises and merchants enjoy the sweetness brought by the short payment cycle, and the cooperation with SHEIN has also deepened. Even today, SHEIN is still leading the Internet-based upgrading of the apparel industry. It is understood that by the end of 2023, SHEIN has supported the construction of nearly 430,000 square meters of first-class commercial factories and more than 620 training sessions throughout the year. At the same time, SHEIN announced that it would invest 500 million yuan in 5 years to continue to deepen the empowerment of first-class businessmen, and establish the first garment manufacturing innovation center to output flexible first-class chain standards.
It is not difficult to find that SHEIN has not only built a strong digital underlying capability by itself, but also actively empowered its business partners to improve the level of digital operation, and jointly created an efficient, flexible and sustainable industrial ecology through close cooperation and in-depth collaboration. The successful promotion and application of this model has benefited many enterprises and businesses, and further promoted the Internet-based upgrading and transformation of the entire garment industry.
In the future, SHEIN will continue to deepen the first-class business empowerment plan, continue to invest resources to establish and improve the garment manufacturing innovation center, apply and fission its flexible first-chain standards in more industries, and strive to promote the development of higher quality manufacturing in China and even the world.