The New Product Development (NPD) in the textile industry is peculiar, as it follows constraints that are particular to the fashion business. A qualitative study comprising 45 interviews were conducted in a South American textile industry and results showcase that fashion forecast, pressure for newness, and cost reduction are relevant matters.
Introduction
The textile industry follows a particular cycle for New Product Development (NPD) as it answers the demand from the fashion industry. Fashion supply chain is fragmented, as the production process is fragmented with companies playing different roles in the production cycle. There are companies that uses the raw material to produce yarns that will be transformed into fabrics, which then it is transformed into clothes, through process that may be a single sewing to complex process that demands intermediate process such as industrial washes. These clothes are sold to consumers through various selling channels, such as stores, retailers, e-commerce, and even door-to-door. Usually one company plays only one of these roles in the supply chain, what makes the production plan to be fragmented amongst several different companies in the supply chain (Şen, 2008). After globalization, this supply chain became even more complex as each chain may be located in different parts of the world, due to production costs and optimization. This scenario results in a supply chain that demands several planning skills, that works, sometimes, with extensive production cycles. (Thomassey, 2014). But, as Christopher, Lowson, & Peck (2004) noted, the supply chain in the fashion business must be agile to respond to changes in demand from consumers, which often occurs, and it can be also very complex as clothing is a way for consumers to either differentiate or fit in society, and the rules to be in or out of society patterns changes fast (Cholachatpinyo, Fletcher, Padgett, & Crocker, 2002a, 2002b).
Due to this complexity and richness of information, the production cycle in fashion business has been extensively studied in the literature (Alexander & Contreras, 2016; Aung & Sha, 2016; Oxborrow & Brindley, 2014) but authors often use a wide perspective to grasp an overview of the supply chain they are studying, using market data and information, or gathering general information from companies that are present in the fashion supply chain. Authors focused their analysis in the supply chain itself, and we could not find studies that focused on the perspective of the product development task in the challenging context of fashion business. There are some characteristics from the fashion business that differentiate New Product Development (NPD) from a classical Business to Business (B2B) scenario. In a brief description of the fashion business production system, we see that it starts with the production of raw materials that varies from natural fibers (e.g. cotton, silk, linen) or artificial fibers (e.g. polyester, nylon, elastane) that are then spinning into threads that may contain one or more different fibers. These threads are then transformed into fabrics through several different weaving techniques, and then it may go through some finishing treatments (e.g. dying, washing), and then it goes to garment manufacturing where garment makers produce clothes for their own brands or for third-parties brands. These clothes are then sold to consumers through various channels (e.g. retail stores, electronic stores). If we analyze this brief description we can see that fashion may influence in all parts of the production cycle, including the demand for raw materials: if denim products are in vogue, then there is a growing demand for cotton products, if sportswear is in vogue, then the demand improves for artificial fibers, and so on. One other thing that should be noted is that usually each part of the production cycle is performed by a different company: the most common scenario we see in the textile industry includes companies that produce only threads, and sell these threads to textile companies that produce fabrics to sell to garment makers that produces clothes to sell to brands to sell them to consumers. There are some companies that integrates two or more parts of the production cycles but they are the exception, not the rule. This fragmented production process combined with the fashion influence result in long production cycles: a designer’s idea may take from three to eighteen months to be available to consumers, depending on the production channels assessed by the designer.
These characteristics showcase how NPD in the fashion business may be complex and therefore it should be investigated further in the literature, and this is the objective of this study. In order to do that, we researched the specific literature in NPD that is vastly discussed in literature as it is responsible for creating, managing and releasing products that are both appealing to customers and profitable to the company. (Brown & Eisenhardt, 1995). Understanding what makes an NP succeed in the market has been on the marketing agenda for a long time, including the fashion business (Alexander & Contreras, 2016; Clarke, 2012; Thompson & Haytko, 1997). One interesting point of view is to understand the predecessors of NP success in the market. Henard & Szymanski (2001) conducted a meta-analysis of 60 studies focused on the antecedents of NP success and proposed a list of 24 predictors of NP performance, which they grouped into four categories: (i) product characteristics, (ii) firm strategy characteristics, (iii) firm process characteristics and (iv) marketplace characteristics. We selected the most relevant predecessors discussed by Henard & Szymanski (2001) and Song & Xie (2000) to use as a basis for a script for interviews with NPD professionals.
Methodology
We conducted in-depth interviews with 45 professionals from different areas that participate in, or are impacted by, NPD process in a South American textile industry. From now on we will call this company “Southex”. These interviews offered a deep understanding of the perspective of NPD professionals, both insiders (professional that work in the NPD team) or outsiders (professional from departments that work as an internal supplier or client for the NPD team). Southex is one of the biggest textile producers in the world, with producing units in Latin America, commercial offices in Europe, Asia, and America. Sales are over U$ 1 bi/year, and the company employed more than 8,000 people in 2012, when this study was performed. Their main market is Latin America where fashion seasons are in opposition to the ones in the North part of the globe, home of the fashion trendsetters for global macro trends (Europe, USA, and Japan). This leads to a one-year postponement of fashion trends, so when something is released as a fashion trend for summer in Europe, it will be considered a trend for summer one year later in Latin America. Southex NPD team had 12 exclusively dedicated professionals as of 2012. Southex launches products in the market with the concept of collections, when the company releases a group of NPs in the market. Every year, the company releases two collections in the market. It usually takes up to six months for NPD team to complete and launch a new collection. Research into fashion trends, commercial needs and technological improvements available in the market are the main sources the company uses to develop NP. Prior to launching a product in the market, the NPD team needs to test its production process in order to guarantee that the product can be produced on a large scale at competitive costs. Every collection is launched as a sample of fabrics that will be produced 4-6 months in the future. If a collection is released in January, the products that Southex is launching will start to be produced in June. So their clients, mainly garment makers and fashion brands, need to coordinate their production chain to start receiving these fabrics after June. Considering the production cycle in these garment makers, it is estimated that the clothing produced with the fabric launched by Southex in January will be delivered to retail stores (and then available to the consumer) in November, almost one year after Southex has launched the fabric in the market.
In order to gather a deep perspective of all matters related to NPD we interview 45 professionals, totaling over 1,600 hours of recorded interviews. 12 insiders, comprising 100% of the team available at that moment, and 33 outsiders from departments such as Marketing, Sales, and Technical Support. Their positions ranged from analysts to directors.. All interviews followed a predefined script of topics. Interviews were transcribed and sent to the corresponding professional for validation, during which they could ask for adjustments. 12 professionals asked for changes in the transcription and we used the changed and approved text, together with the 33 unchanged texts in this analysis.
Results and Discussion
All texts were then codified according to content, which involved identifying similar topics and applying codes to facilitate analysis of the interviews. Using the predecessors of NP success has facilitated our understanding of the matters related to NPD at Southex. By formatting the presentation of information gathered in the interviews with the predecessors we were able to see the main issues found in NPD. In total, there were 421 mentions codified. After analyzing the codification of the interviews, we can see that Cross function is the main topic addressed by respondents. This is due to the relationship that the flow of NPD activities in the company. As we can see, there were several issues related to the relationship of NP team with the outsiders and that communication amongst insiders and outsiders needs to be improved.
There are some context-specific content that appeared as relevant in the analysis of these interviews: insiders are worried with the pressure they feel to forecast fashion preference for products. They say that fashion industry is constantly demanding new technologies, new products, and this has been creating a pressure to accelerate product development they think it is not healthy to the system. Also there is a general worry (insiders and outsiders) with the pressure for price reduction in basic products. Some products are considered basic and are included for several collections (interviewees mentioned that some products are included in more than 15 successive collections) and for these products instead of demanding for innovation, there is a demand for price reduction which leads outsiders to perform tests to substitute materials or changes in the production to reduce costs without prior knowledge from NPD team, which causes several problems in the organization.
It is important to point out that even though we used only one company in this study, it was a complete and deep perspective, as we were able to collect high quality data with all 45 professionals that are directly or indirectly related to NPD in the company. Also, as Southex works as a thread and fabric producer, it showed us an insider perspective about the textile supply chain in the fashion business. Even though the exploratory study presented the reality of a firm in an extensive and very detailed way, it may not reflect the full complexity of other organizations in the market; thus, caution is advised if applied in a market that differs deeply from the scenario presented in this study. However, it is also important to remember that this is a qualitative approach where generalization is not expected, and the attention for details is important.
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