Can new manufacturing models tackle fashion’s overproduction problem?

Fashion has an overproduction issue. In a bid to meet consumers’ ever-changing tastes, just-in-case (JIC) manufacturing has become the norm, and the impact of this model is excess inventory.

Thirty percent of all fashion garments produced are never sold, and the equivalent of one garbage truck of textiles is landfilled or burned every second.

It’s no wonder the fashion industry is responsible for 10% of global greenhouse gas (GHG) emissions (more than shipping and aviation combined) and 20% of wastewater. But brands won’t be able to generate large quantities of deadstock for much longer.

As the world’s climate crisis intensifies, legislation is tightening around how brands evidence their eco credentials and dispose of excess inventory. And it will drive fundamental changes in how fashion retailers manufacture their products.

Lawmakers are taking a stricter stance on fashion greenwashing and waste

Although many brands have become more environmentally friendly – choosing more sustainable materials and reducing distribution mileage, for example – the fashion manufacturing model remains unchanged.

In fact, it’s easier than ever to mass-produce garments. Automation has shortened the production cycle and helped clothing and accessories companies to create stock in large volumes efficiently. Some online fast fashion brands release up to 10,000 new products daily. 

But while this gives shoppers a lot of choice, it also generates a lot of waste, which lawmakers are determined to address.

In 2015, 196 world leaders signed the Paris Agreement, a landmark commitment to limit temperature increases to 1.5°C above pre-industrial levels. Achieving this involves reducing GHG emissions by 43% by 2030, yet a 2023 stocktake revealed most countries are falling significantly short of this target.

Growing concerns about the impact of climate change have prompted some regions to take a tougher stance on environmentally damaging industry practices, and fashion is a priority target.

The European Union is the latest organisation to release new legislation; in December 2023, it banned the destruction of unsold clothing and footwear, while a new Green Claims Directive will clamp down on greenwashing in the fashion industry.

These regulatory changes aren’t just tweaking how brands produce and market their products. They’re laying the foundation for fundamental changes to fashion manufacturing models.

Introducing greener models for fashion manufacturing

If JIC manufacturing can no longer meet the requirements of EU environmental laws, what’s the alternative? Sustainable fashion leaders are looking at three potential routes: 

1. Made-to-order clothing

The ultimate zero-waste fashion model is made-to-order, as brands match garment production to customer demand. 

A few years ago, made-to-order manufacturing would’ve been hard to achieve on a large scale. However, advancements in fashion manufacturing have made small-batch production much more efficient. 

For example, direct-to-fabric digital printing has become a viable alternative to traditional screen printing techniques, and there are now manufacturing facilities like Teemill that specialise in print-on-demand services. Already, 50% of fashion companies believe on-demand printing techniques can be scaled enough to be introduced commercially. Other emerging techniques include 3D weaving to convert yarn into garments without fabric, courtesy of companies like Unspun.

AI technology also enables made-to-order manufacturing by automating elements such as taking custom measurements and preferences and converting them into digital patterns. It can also help to optimise fabric usage and material yield, along with detecting defects and quality control issues before garments are shipped.

There are already fashion brands proving that made-to-order garments can be a sustainable model, not just environmentally but financially. Danish brand Son of a Tailor has reduced the global warming potential of a cotton t-shirt by 25% through its made-to-order model, while fashion labels like Citizen Wolf, Mayamiko and Rapanui are also producing custom garments on demand.

2. Just-in-time (JIT) manufacturing

While the JIT model is commonplace in some sectors, it’s not used widely in fashion manufacturing compared to the JIC approach.

JIT closes the gap between demand and production, allowing fashion brands to adapt their garments to consumer needs. Standardised processes and a focus on operational efficiency speed up production and enable learnings to be implemented in real time. Brands don’t need to hedge their bets and therefore hold less stock, cutting back on excess inventory. 

There are already brands using JIT principles to shorten their lead times; Zara uses modular manufacturing techniques to break garment production into core components that can be adapted to changing customer preferences. A new design can land in-store within 15 days.   

Uniqlo is another example of a fashion brand using JIT manufacturing to improve efficiency, heavily influenced by the Toyota automotive production model. It analyses weekly sales patterns across its store network and uses these insights to adapt production. For example, if a cardigan isn’t selling well, Uniqlo might pivot the design to create a pullover instead.  

The challenge with using just-in-time manufacturing to make fashion more eco-friendly is joining the dots between every operational area to minimise waste. For example, the cutting department cannot prepare garment components without suitable fabric, so there’s a temptation to overstock. 

Up-to-date information on customer orders is critical to understanding material needs, and a true JIT model will link demand, production and the supply chain to prevent overbuying.

3. Integrated order management 

For many fashion brands, made-to-order and JIT models are the long-term goal, but they just can’t offer that level of responsiveness at present. But that doesn’t mean they can’t improve their manufacturing processes to reduce excess inventory.

The logical next step for many fashion labels is fully integrating order management with production capabilities to maximise customer insights and drive sell-through.

Often, it’s not poor demand preventing garments from being sold; it’s stock being held in the wrong location. Many brands still manage inventory in silos, whereas unifying stock allows available inventory to be sold across every channel.

In our recent blog post, how can fashion brands limit the burden of a big stock backlog?, OneStock discusses the power of centralised stock management in driving sell-through. 

Creating a single database where critical information like colour, sizing and stock location is captured for every SKU allows fashion brands to improve stock planning and sales forecasting. This enables them to align production and demand better, allocate stock to the best-selling channels, and leverage that stock in other channels if buying trends change.

Preventing fashion overproduction using order management software 

To address the overproduction issue and reduce the fashion industry’s carbon footprint, two major changes need to happen: 

• Brands need to close the gap between customer demand and garment manufacturing.
• Brands need to make all garments manufactured available across all their channels to maximise sales.

It’s a tall order – but one that is much easier to achieve with retail order management software.

With OneStock’s retail OMS system, fashion brands can unify their stock pool while looking at ways to increase sell-through. Orders are automatically allocated from the most suitable stock point when customers place their order, depending on business rules, and brands can add capabilities like ship from store to increase fulfilment options.

To illustrate the impact of retail OMS software on sell-through, OneStock helped Ted Baker fulfil over 100,000 additional orders in a single year from its network of 30 stores, generating an 8% increase in the designer brand’s UK ecommerce turnover.

In the immediate term, our software closes the gap between omnichannel demand and garment manufacturing to prevent overproduction. However, it also creates a foundation for exploring agile manufacturing capabilities further down the line, building production around customer demand rather than collections or seasons.

A more eco-conscious fashion world based on made-to-order manufacturing may be closer than many brands think.

Ready to reduce excess inventory? Book your free OneStock demo.