Fashion companies must collaborate with carefully chosen suppliers and leverage digital tools for better collaboration and transparency to succeed in future, writes Helene Behrenfeldt, senior industry strategy director for fashion at Infor.

Driven by new legislation, rising sustainability demands, and evolving consumer expectations, the fashion industry is reworking how its supply chain operates.

The introduction of Digital Product Passports (DPPs) in 2026 and 71% of organisations now integrating circular business models into their five-year strategies means brands must rethink how they source, produce and distribute goods.

To adapt and stay competitive, companies are moving away from vast, loosely connected supplier networks towards a model with fewer strategic partnerships. At the same time embracing nearshoring to bring production closer to key markets. But this transition goes beyond just improving efficiency — it’s a strategic restructuring of how fashion brands approach compliance, sustainability and product development.

Successful companies will be the ones that collaborate with carefully chosen suppliers and who leverage digital tools for better collaboration, greater transparency, and adopt resilient sourcing strategies.

A more selective supplier base

New regulations are forcing organisations to re-evaluate their supply chains with transparency and compliance becoming non-negotiable criteria. The DPP regulation, designed to give in-depth insights into a product’s entire lifecycle — from its origin to the point of sale and beyond, is already causing global ripple effects in fashion. While full implementation is anticipated to start in 2026, by 2030, an estimated 62.5bn DPP will be in use across the sector, ensuring that only suppliers who meet stringent sustainability and ethical standards remain in the chain.

This is already in motion, and by 2028, many plan to reduce their supplier base by nearly half, consolidating partnerships to just 51% of their current networks. As sustainability regulations tighten and risk factors such as geopolitical instability escalate, this transformation not only enhances operational efficiency but also creates more transparent, accountable partnerships across the supply chain.

The industry is seeing non-compliant suppliers become systematically phased out through detailed scorecards—used by 92% of brands, to assess supplier performance, while 78% conduct third-party audits. This approach is driving a “cleaning” effect across the industry, ensuring that only suppliers who prioritise ethical labour practices, adhere to strict environmental regulations, and maintain full transparency remain in the supply chain. As a result, fashion brands are building leaner, more responsible networks that align with both regulatory demands and consumer expectations for sustainability.

Fashion brands are shifting from transactional supplier relationships to deeper, long-term collaborations in the hopes of fostering greater innovation, efficiency, and sustainability within their supply chains. These strengthened partnerships not only enhance compliance reporting and sustainability tracking but also enable organisations to better meet the growing regulatory demands and consumer expectations.

For companies, achieving full visibility over their entire supply chain is now a critical objective. DPPs will play a crucial role in this, enabling businesses to track the entire lifecycle of their products and making sure every stage of production aligns with both regulatory demands and consumer expectations for sustainability and ethical practices.

Digital integration for transparency

A comprehensive digital strategy is becoming essential for fashion businesses seeking to enhance supply chain transparency and meet evolving regulatory requirements. It’s no longer sufficient for retailers to simply track the movement of goods; they must also document the transformation of materials at every stage of the supply chain.

Central to this digital transformation is the adoption of DPP to capture critical information on materials used, manufacturing processes, and ethical sourcing practices. This level of detail is made possible through integrated data platforms that facilitate real-time, bi-directional data flows, ensuring continuous communication and alignment between businesses and their suppliers.

Cloud technology plays a key role in this transformation, providing a scalable and secure infrastructure for collecting, storing, and managing supply chain data. By leveraging cloud-based platforms, businesses can benefit from seamless data exchanges between suppliers, manufacturers, distributors and retailers, ensuring that all stakeholders remain informed and compliant. Blockchain technology further strengthens traceability by assigning unique digital IDs to products, creating a secure, tamper-proof record of their journey from raw material to finished product.

For consumers, these advancements mean greater access to deeper product information. QR codes on product labels give instant access to verify a product’s origins, ethical standards, and environmental impact via their smartphones. This level of transparency is becoming a key differentiator, influencing purchasing decisions and strengthening brand loyalty.

The rise of nearshore and local production

As supply chain disruptions persist, fashion brands are increasingly adopting nearshoring and local production to gain more control. Companies like Asos and Boohoo are already expanding operations, particularly within countries such as Türkiye and Morocco. Industry-wide, this shift is expected to accelerate, with 71% of chief procurement officers planning to increase their nearshoring share by 2025.

In the UK, post-Brexit trade challenges have further fuelled the movement toward domestic and regional production. At the same time a growing emphasis on sustainable, locally sourced models as organisations navigate new regulatory landscapes while strengthening supply chain resilience.

By bringing production closer to home, companies can minimise logistical risks, cut carbon emissions, and accelerate responses to changing market trends. By embracing nearshoring, companies can lower their environmental impact while becoming more agile in meeting consumer demands and adapting to market fluctuations.

Strengthening strategic partnerships

The fashion industry is at a turning point, with supply chains evolving to accommodate greater sustainability, efficiency, and resilience. Organisations are streamlining their supplier networks, enhancing operational agility and compliance in the process.

Those that integrate digital solutions will have a significant competitive edge. At the same time, the prioritisation of local production not only boosts transparency but also accelerates progress toward a more responsible fashion industry.

The supply chain revolution is already underway. The brands that embrace change today will be the ones shaping the future of fashion tomorrow.