A key focus for buyers must be to create greater resilience in their sourcing networks by avoiding reliance on any country, identifying vulnerable parts of their supply chains, developing alternative sources, and updating and improving their contingency planning.
Fremont, CA: The textile industry and its supply chains had been struggling long before Covid 19 – but it took a global pandemic to bring them to the fore.Nation lockdowns, plant shutdowns, travel bans, labour and raw material shortages, increasing logistic costs, bankruptcies of retailers and suppliers, and a rise in online demand all exposed the fragility of long, complicated and rigid procurement networks. Many businesses are already changing the way they work, and it is clear that the repercussions will continue well into 2021 and beyond. Here are eight main problems that are rewriting the rules for fashion sourcing.
Creating Greater Resilience in Network Sourcing
A key focus for buyers must be to create greater resilience in their sourcing networks by avoiding reliance on any country, identifying vulnerable parts of their supply chains, developing alternative sources, and updating and improving their contingency planning. Resilience has scarcely figured in the study of the supply chain. It's time to start demanding that it does.
Rebalancing Supply Chain Clothing
If there's ever been a time to rebalance supply chains for greater responsiveness and versatility, it's now. Moving some production closer to the market and transferring orders from China is already underway, triggered by a weakening relationship between the US and China – with Asian competitors such as Vietnam, Bangladesh and Cambodia slackening. Regional supply closer to the market will continue to expand: Asia for Asia, EMEA (Europe, Middle East, Africa) for EMEA, Americas for the Americas.
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However, establishing new supplier partnerships is easier said than done, as is identifying locations with sufficient infrastructure, including ports, storage, fibre, fabric, textiles, trim, quality facilities, and availability of production. It is also clear that China's clothing and textile capacity and capabilities will continue to dominate global garment production for some time to come, with 'Made-in-China' being 'Managed-by-China' and its fibres and fabrics continuing to be main inputs to factories around the world.
Developing Strategic Supply Alliances
The lack of confidence between buyers and suppliers – through cancellation of orders, broken contracts and withheld payments – was one of the first victims of the pandemic and is now rewriting the rules on buyer-supplier ties. Moving closer to a smaller number of financially sound retailers and vendors will play a key role in promoting initiatives to achieve quicker, more responsive and more sustainable supply chains. Deeper alliances that offer greater agility and transparency would help prevent a repetition of the pain and financial loss suffered by many in 2020.