Acting Vertical
Acting vertical is a strategy in supply chain management aimed at maximizing collaboration and information sharing across all stages. This includes internal collaboration between functions, external partnerships with manufacturers and suppliers, and ongoing engagement with consumers, all without necessitating centralized ownership of the supply chain
The concept of acting vertical emerged in response to the increasing complexity of global supply chains in the late 20th century. Traditional vertical integration involved companies owning or controlling multiple stages of production and distribution. However, this model became less sustainable as globalization expanded, leading to the rise of acting vertical as a more flexible, collaboration-driven alternative.
One of the earliest adopters of the acting vertical strategy was Zara, part of the Inditex group, in the 1990s. Zara’s success lies in its highly collaborative relationships with suppliers, designers, and retailers. Unlike traditional models, Zara operates on real-time information sharing, allowing the brand to reduce lead times and respond rapidly to market trends. For example, Zara uses digital systems to track customer feedback from retail stores, which is then shared across their supply chain to influence production decisions.
The COVID-19 pandemic further highlighted the importance of acting vertical, as disruptions forced brands to innovate collaboration practices. Companies like Nike leveraged technology for virtual sampling and real-time communication with suppliers to maintain production schedules, showcasing how acting vertical can future-proof supply chains.
Acting vertical has significant cultural implications in the fashion industry. It fosters greater transparency and collaboration, which aligns with consumers’ growing demand for ethical practices. For example, brands like Everlane prioritize transparency by collaborating with ethical factories and openly sharing information about production processes with consumers. This approach builds trust and aligns with the modern emphasis on corporate social responsibility.
Another cultural shift involves the use of technology in acting vertical strategies. Tools like blockchain enable companies to track products from raw materials to retail, ensuring greater accountability. For instance, Patagonia uses blockchain to verify the sustainability of its supply chain, fostering a collaborative ecosystem with suppliers and consumers. This transparency not only supports sustainability but also appeals to tech-savvy customers.
Furthermore, acting vertical encourages inclusivity by involving consumers in the design process. Brands like Threadless crowdsource designs from their community, blurring the line between producers and consumers. This collaborative approach highlights the cultural shift toward democratizing fashion.
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Zara can design, produce, and distribute a new product in just two weeks due to its acting vertical strategy.
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Acting vertical reduces textile waste by optimizing production cycles based on real-time data.
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Blockchain technology enables acting vertical strategies to flourish by providing tamper-proof supply chain records.
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Acting vertical is all about collaboration across the supply chain. Instead of one company owning everything, brands work with partners and consumers to create, produce, and distribute fashion faster and more efficiently, often using technology to improve transparency and sustainability.
Acting vertical is evolving as supply chains become more digitized and consumer-driven. Key trends include:
- Real-Time Collaboration: Tools like PLM software (Product Lifecycle Management) allow brands to share live updates across their supply chains, improving efficiency. For instance, Tommy Hilfiger uses 3D design tools to collaborate with suppliers and reduce waste during sampling.
- Sustainability Integration: Acting vertical supports sustainable practices by enabling brands to monitor and reduce environmental impact. Eileen Fisher exemplifies this by collaborating with suppliers to ensure eco-friendly materials and ethical labor practices.
- Consumer Co-Creation: Brands are increasingly involving customers in product development, leveraging platforms like social media and online polls. This trend aligns with acting vertical’s emphasis on engagement and collaboration.
- Omnichannel Strategies: Acting vertical supports seamless integration between online and offline retail, as seen in Warby Parker, where data from e-commerce informs in-store inventory decisions.
- AI and Predictive Analytics: Advanced technologies allow brands to forecast demand and manage production proactively. For example, H&M uses AI to optimize its supply chain and reduce overproduction, aligning with acting vertical principles.
Acting vertical fosters sustainability by emphasizing collaboration and transparency throughout the supply chain. Specific examples include:
- Reducing Carbon Footprint: Adidas uses acting vertical strategies to co-create with manufacturers, enabling efficient production schedules and minimizing excess transportation.
- Ethical Labor Practices: Fair Trade Certified brands like Patagonia partner with ethical factories to ensure fair wages, supporting workers without owning the factories themselves.
- Material Innovation: Acting vertical allows brands to collaborate with suppliers to create sustainable materials. For example, Reformation works closely with its fabric suppliers to source eco-friendly textiles like Tencel.
- Traceability: Tools like blockchain, used by Prada, track materials across supply chains, ensuring transparency and reducing waste.
- Circular Fashion: H&M’s Garment Collection Program relies on acting vertical by involving consumers in recycling initiatives, collaborating with suppliers to repurpose old garments into new textiles.
Practical Idea: New brands can adopt acting vertical by starting small—using digital tools like People Per Hour or Upwork to find freelance designers and collaborating with eco-certified fabric suppliers.
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