On-demand production: The future beckons

NRF 2022: Insights on successful custom manufacturing from Ralph Lauren

In a featured session on the Riskified Stage at NRF 2022: Retail’s Big Show, Jason Berns, senior vice president, product and manufacturing innovation for Ralph Lauren, discussed his company’s foray into custom manufacturing and on-demand production with Sheena Butler-Young, a correspondent for The Business of Fashion.

Butler-Young began by noting that many big issues fashion and retail deal with — supply chain, sustainability — are deeply connected with something Ralph Lauren is doing right now — on-demand production. Why did the company embark on this path?

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The current Ralph Lauren custom manufacturing operation began when a customer asked for a Polo shirt in one color with the logo embroidered on it in a different color, Berns said.

Since then, the company’s on-demand production has evolved in two different areas. One is speed to market; Ralph Lauren has a three- to nine-month cadence for order fulfillment, and Berns was tasked with finding ways to accelerate the process. The other is true custom manufacturing, in which a specific product is made for one specific person.

Both things heavily involve the use of digital tools. Factories are not set up to make one item for one customer, they’re set up to make lots and lots of the same item for many customers. Custom work requires immediate access to just the right button, thread, fabric, whatever it might be, to execute a particular order.

To do this cost-effectively requires close coordination between the order-taking front end of the business and the manufacturing back end. Many companies simply do not have that.

So how, Butler-Young asked, did Ralph Lauren solve this problem?

“We’re still learning,” Berns said. There are different levels of coordination, depending on the output required. On the fast order fulfillment side, some of the challenge is configuring a website so exactly the right partners are in place. If there’s a knitted fabric involved, for example, the right software must be in place to drive the knitting machines.

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On the custom side, Ralph Lauren deals extensively with digital colors, which means the customer front end must be linked all the way back to the factory. “A lot of companies are not set up to do that,” Bern said. “It’s quite challenging to make it happen.”

When asked what percentage of Ralph Lauren’s sales volume these programs represent, Berns said speeded-up order completion accounts for a “fairly sizable” piece of the overall business. The on-demand business is much smaller, he said, but noted that it involves some significant cost advantages.

“It’s always a full-price sale, and there is no over-production. You’re not faced with that question we always deal with in fashion: How come we made so much extra? When I’m manufacturing for only one person, I can really drive the margin up.”

Nonetheless, that kind of custom manufacturing — I want a suit made thus-and-so, I want it quickly and I am willing to pay for it — is possible only if it has been carefully thought through and made part of a company’s business plan.

“If it’s a sideline,” he said, “it becomes much more of a challenge.”

Looking toward the future, Butler-Young asked Berns to identify the biggest problems — and the biggest opportunities — facing both Ralph Lauren and the industry. “I think some of the platforms we’ve publicly announced, bringing them to scale with our partners will help the overall industry,” he said, adding that no one company can solve all these issues by itself.

“The industry needs to be bold.”

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