Supply chain ‘agility’ key in 2023 as clothing brands fight off macroeconomic pressures
13-12-2022
SUPPLY CHAIN ‘AGILITY’ KEY IN 2023 AS CLOTHING BRANDS FIGHT OFF MACROECONOMIC PRESSURES
Supply chain agility will be crucial for clothing brands looking to secure their industry positions and grow in a world where macroeconomic pressures are increasingly making for a difficult business environment, a group of experts has conceded.
Over the last three years, the Covid pandemic, rising wages and transport costs, a shortage of workers and rising inflation impacting consumer spending, have all contributed to chaos in global clothing supply chains.
A webinar hosted by Lectra featuring Mathieu Bonenfant, the vice president of Fashion Marketing Strategy, Lectra, and Dr. Delman Lee, the vice chair of TAL Apparel, suggested that clothing brands looking to future-proof clothing supply chains would need to think about making them as agile as possible.
Lee explained that many brands are now considering ways to make their supply chains more resilient following the disruption caused by Covid and everything in the aftermath.
“At the start, you’d get brands making calls to ensure the clothing and textile supply chain is running and delivering on time. Within a month or two when markets began to collapse on the virus spreading, the sentiment switched 180 degrees. Instead of making sure goods were arriving on time, concern shifted to stopping production and cutting stock.”
He says they were unaware, at the time, of the level and how long supply chains would experience upheaval.
“We often joke now about no longer doing 3-5 year plans. The management practice now is updating your three-year plans, financial modelling, and assessing where your business is and where your factory footprint should be. The reality is we need to be less detailed about our simulation three years ahead because it’s difficult to predict, and the focus is more on thinking about how to be a resilient and agile supply chain in many aspects. Whether that is smaller orders, made-on-demand, that’s becoming the new theme across the industry.”
One area where there has been a visible impact of supply chain disruption and the shift to digital is sampling.
The virtual shift in the clothing supply chain
Delman says the industry is quickly understanding the benefits of virtual sampling including lower costs and shorter lead times.
While more buyers are open to the idea of virtual sampling, he says there is still some way to go and that he’s not seen “all customers accept it wholeheartedly in the value chain.”
Bonenfant adds: “It sounds very obvious to remove all these physical prototypes that fly from one part of the world to another, it doesn’t really make sense, and everyone is really eager to see the shift from the physical prototype to the actual thing. But if you look in the literature, the surveys, it’s still a topic of investment for many companies, which means we’ve not cracked the topic yet. About 10% of companies are equipped with this visual rendering tech so there is still a way to go I would say; it’s something that really needs to evolve further and be scaled up in the industry.”
Both agree, cutting out many of the physical parts of the supply chain – and just anything that will boost speed-to-market – will become a critical driving force for Industry 4.0.
Shein and the new world order
In recent years, Shein has skyrocketed in popularity, emerging almost out of nowhere, Delman points out. And while there are questions surrounding its sustainability, he says there is a lot of curiosity and envy surrounding the success of its supply chain model.
“There were rumours that it was occupying about a third of the capacity of the courier. It’s certainly caught everyone’s eye.
“We talked earlier about minimising workflows. This ultra-fast-fashion company managed to collapse “concept-to-consumer”, that whole workflow, into ultra-fast speed and grew during Covid.
“Everyone in the supply chain is intrigued and trying to learn what they did and how they did it. How did they manage to collapse that delivery cycle all the way to the consumer in the western world?
“We recognise there may be some concerns along the way about the way the clothing supply chain is set up in terms of sustainability, but the business model is certainly very intriguing.”
But can a company be sustainable at such high speeds?
Bonenfant notes that it’s a difficult question to answer in foresight.
“[It would mean] accelerating and collapsing basically from consumer to production and shortcutting the path between manufacturing and consumer into these workflows. That can be fully automated and streamlined so every non-value-added task can be removed. Everything can be streamlined and automated. And that’s interesting because that is what Industry 4.0 is about.
“Shein has shown us it is possible to be faster and connect the manufacturer and consumer in a much more direct way. Technology can help to speed up the global industry, while remaining sustainable and allowing people and experts to focus on what they can bring. The machine makes us more human because we focus on what we provide in terms of a difference in this industry.”
Ultimately, he adds, the next generation of apparel production will rely on a marriage between speed and sustainability.
“For us [Lectra], it’s about better matching supply and demand. It won’t work if there is a mismatch between the two. That is about having a different capacity of production. More and more it’s about producing in shorter, smaller series, as Delman mentioned earlier. This is building resilience.
“Yes, there will be the need to manufacture at scale. But there will also be a need to process a smaller series, even down to a unitary level in a profitable way.
“We try to match the new constraint of sustainability in a profitable way. We try to minimise fabric consumption we have on our machines or software so these materials we can optimise as much as possible.
“Cotton and things are more expensive than ever before, so its important to protect them and make the best use of them. And finally it’s about protecting things like energy and being extremely lean from an energy point of view such as through electricity consumption.
“The important thing is recognising sustainability and profit go hand in hand. Often these two things are opposed. By working sustainably and lowering your use of fabric and energy you are achieving a superior return on investment.”
By Just Style
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