4 Ways to Create a More Resilient Supply Chain
The pandemic resulted in major setbacks for the fashion industry: manufacturing sites were closed, logistics broke down, and physical stores were shuttered resulting in a complete breakdown of operations. Since then, the industry has tried to restabilize itself, with top decision-makers working to build up their supply chains more effectively to withstand any future disruptions. Some strategies that apparel brands have started to use to bolster supply chain resiliency include nearshoring/reshoring, geographical diversification, risk management programs, and technology.
4 Ways to Create a More Resilient Supply Chain
Nearshoring And Reshoring
Nearshoring (moving operations closer to the home country) and reshoring (moving operations to the home country) have been growing trends in the fashion industry that were accelerated by COVID. By moving operations, apparel brands gain more control over their supply chains, and reduce lead times to get products into customers’ hands.
While nearshoring/reshoring may be more expensive than manufacturing abroad, the increased control and quick turnaround have made it a viable option for many apparel brands looking to become more resilient. Some examples of apparel companies that have moved operations back home or closer to their home country include Benetton, Hugo Boss, and Zara, with much more carefully considering the decision to move to manufacture.
Geographical Diversification
Another strategy to strengthen the supply chain is the geographical diversification of suppliers. In light of the pandemic, a number of brands recognized their excessive reliance on China, and have since gradually shifted away from the country. Instead, countries such as Vietnam, Bangladesh, and Cambodia have become more popular. By partnering with multiple factories, any disruption in one area will not necessarily lead to a complete halt in operations. The risk can be better spread around, and the brand will not leave itself vulnerable to any one supplier in any one location.
Risk Management Strategies
Establishing risk management strategies can also help apparel and textile companies identify potential vulnerabilities and prepare for unforeseen disruptions. Companies can conduct supply chain inspections, map out potential risks, and create contingency or CAPA plans to respond to operational breakdowns.
This type of planning has become routine in the industry:
Zara, the global fast fashion retailer, has implemented a comprehensive risk management program to identify potential risks and disruptions in its supply chain. The program includes regular assessments of suppliers, audits of manufacturing procedures, and contingency plans for unforeseen events.
Technology
Lastly, technology can play a crucial role in building resilience in the supply chain. Many fashion executives realize this: investment in fashion-related technology has grown by 66% since the pandemic, with much of this investment in logistics and supply chain management software. New tools to increase visibility, facilitate supply chain inspections, foster communication, and monitor production are being put on the market for apparel brands to use to future-proof their supply chains. Triple Tree supply chain solutions like TrackIT can help brands build resiliency by giving them a clearer look into their global supply chain, allowing for better control over the manufacturing process. Technology can make the difference during a disruption, allowing you to overlook your entire supplier base on a single platform, helping to make the right decisions at the right time in a crisis. The increased visibility allows the brand to detect delays, identify bottlenecks, and problem-solve ahead of time to maximize operational efficiency, and increase resiliency.
In conclusion, building a more resilient supply chain in the apparel/textile industry requires a multi-faceted approach that includes localized production, geographical diversification of suppliers, risk management strategies and audits, and technological integration like supply chain management software. These strategies can all work, but finding the best mix for the brand will determine success. Technology like Triple Tree supply chain solutions can help to guide the way, bringing a new level of resiliency to the brand’s supply chain for smoother, more optimized operations. Brands that embrace these ideas will likely rise to the top of the industry, better equipped to weather disruptions, and ensure continued operations.
