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by Daniel Harris,
Market Research Associate
Last Updated: February 22, 2017

Apparel manufacturers face a dizzying, and occasionally contradictory, array of government regulations, industry standards and consumer demands. Even something as basic as sizing can be a problem. Since the advent of “vanity sizing,” American clothing sizes are a loose standard at best. To add to the complexity, the same item is often available in a variety of sizes and colors. Many manufacturers create goods with logos, so licensing and royalty management is important. One of the most heavily regulated aspects of apparel is labeling; labels must include materials, country of origin and cleaning instructions. Depending on its exact business model, any individual apparel manufacturer may need software to assist with all of the above or more.

Items are generally made of subassemblies or components, so make-versus-buy is always a decision point for apparel manufacturers. The inventory system needs to support an item/size/color matrix. Subassemblies and raw materials may come from factories that are literally half a world away, so production management and order entry must account for lengthy transit times. Currency conversion is a consideration for the accounts payable system and, in a highly globalized industry like apparel manufacturing, it’s a frequently requested feature.

Payroll is standard but tracking and documenting employee training and proof of eligibility to work are important features for an apparel manufacturing system. Accounts receivable and general ledger are also standard. Most enterprise resource planning (ERP) systems are deployed on-premises but Web-based systems are available and an attractive option for small and medium-sized operations.

Common Features of Apparel Manufacturing ERP Software

In addition to the core accounting functions, apparel manufacturers should evaluate the following functions to meet their sector’s unique requirements:

License and royalty management Apparel manufactures that use trademarks must hold current licensing agreements and pay royalties to the trademark owner. The system needs to track the licenses and calculate payments due to trademark owners. The amounts should transfer to accounts payable.
Size and color matrix A successful apparel inventory system uses a matrix of modifiers. The general description is entered once, and the sizes and colors are listed as modifiers to the basic description. The inventory must track each item as a separate SKU, and maintain separate reorder or production points.
Season and line planning Apparel lines change season to season and year to year. The inventory should make recommendations for production. In addition, it should track existing inventory and make sales-versus-storage recommendations.
Artwork and pattern management The system should store artwork and patterns for products. It should also track which components are copyrightable and which are not. Advanced systems will provide the ability to electronically file with the U.S. Copyright Office.
Component management The components for each item need to be tracked, including sizes and colors if appropriate. Component management also includes make-versus-buy decision making, which might change from run to run. Whether made or bought, the production system must allow for time and cost of a acquiring components for each run.
UPC assignment The system needs to catalog UPC codes for existing products and assign UPC codes to new products. Advanced systems can also use International Article Number (EAN) codes as well as UPC.
Cutting ticket management The production management system needs to draw information from pattern and component management and inventory to produce cutting tickets.
Worldwide Responsible Accredited Production (WRAP) compliance documentation More and more apparel manufacturers are seeking WRAP certification. Maintaining certification requires periodic compliance reports, which means it’s important that your system track compliance information, identify issues and prepare the compliance reports.
Product label management Apparel manufacturers must label products to comply with regulations, including required information such as country of origin, materials, washing instructions and California Proposition 65 warnings.
Compliance reporting The system should prepare all required compliance reports. It should also be customizable to produce other reports as required.
Material safety data sheet (MSDS) repository OSHA requires that data sheets be on hand for hazardous materials that workers are likely to encounter on a daily basis. Dyes and cleaning agents are examples. The system should have a repository for MSDS information to supplement the required paper copies.
Size definition and conversion American garment sizes are loosely defined. The system should have predefined sizes that can be customized if necessary. It should also provide conversion to European sizing (EN 13402), U.K. sizing (BSI 3666 and BS EN 13402) and Army Combat Uniform (ACU) standard sizes.
Currency exchange values The system should track the exchange values for all currencies used by foreign suppliers. It should download values from a reputable site daily to accurately calculate inventory costs and accounts payable balances. The system should store the current value for currency exchange with every transaction.

What Type of Buyer Are You?

Apparel manufacturing ERP software is actually used by a range of different types of business within the apparel industry. While some apparel manufacturing ERP systems would be appropriate to most businesses within the apparel industry, others serves specialized needs. Understanding how your company fits into the larger apparel industry will help ensure you purchase software that fits.

  • OEM manufacturer. Original equipment manufacturers produce items that are used to complete other company’s end products. OEM apparel companies need ERP software that can assist with inventory management, forecasting and make-to-stock and purchase-to-stock workflow management and planning.
  • Apparel buying house. Buying houses serve as intermediaries between apparel manufacturers and retailers and can have special ERP requirements. They often have lengthy lists of clients with varying contracts and agreements and sometimes require ERP systems with an emphasis on customer relationship management or CRM.
  • Apparel retailer. While retailers don’t typically need very advanced ERP functionality, they do have unique inventory management challenges. Their size and color matrices are often relatively complex and their stock and purchase orders need to be managed with a larger degree of flexibility. They will also seek systems they can easily integrate with POSs and web-portals, helping provide up-to-date stock information to both brick-and-mortar customers and employees, customers using their branded mobile app and customers making purchases online.

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