Do Not Fix Your Supply Chain, Transform It!

In this increasingly volatile world, now is the time for the fashion industry to get smarter. Instead of fixing the supply chain, fashion businesses need to establish an approach that will transform their supply chain, so they are better equipped to grapple with challenges brought on by sudden disruptions, like COVID-19.

Becoming Resilient To Disruption

To survive and prosper in the “new normal,” there are three areas that could give you better control over your supply chain: understanding consumer behavior, the importance of sustainability, and the need for digitization.

The Changing Consumer: Understanding The Fast-changing Narrative 

“Meet environment commitments or risk losing customers” sounds a bit dramatic. Still, the truth of the matter is that the conscious consumer has brought about a seismic shift that could reset fashion businesses. No longer the “customer from the good old days,” Deloitte, one of the Big Four accounting organizations, believes that the modern consumer is now constructed of growing economic pressure and increasing competitive options. 

Both conscientious and knowledgeable when it comes to purchasing products, some experts believe that the consumer is not changing but adapting to a new environment around them. Whatever the case might be, this new breed of customer is the game changer pushing for a change that could fundamentally lead to fashion supply chains increasing traceability and adopting environmentally sustainable practices, which, all in all, is not a bad thing.

Sustainability: Improving the Global Supply Chains

COVID-19 has impacted the fashion industry’s supply chain, especially when it comes to sustainability efforts. According to a global survey by the U.S. Cotton Trust Protocol, some companies have paused most if not all sustainability initiatives due to the crisis. It reports that some companies have continued to focus their sustainability efforts on manufacturing (25%), sourcing of raw materials (25%), or traceability (11%).  

Although the U.S. Cotton Trust Protocol report found that only 26% of respondents believe that COVID-19 has had a positive impact on sustainability investments, some continue to hold on to their sustainability commitments. Yes, the pandemic has been disruptive, but the other side of the coin this crisis has given companies the space to reimagine operations that could help them rebuild their supply chains and create a ‘healthier’ future for the fashion industry.

In July 2020, a Mckinsey report observed that the crisis revealed weaknesses in the supply chain, such as the struggle with inefficient digital technologies. With many businesses stating that they have no intention of returning to the status quo, supply-chain leaders are putting plans in place that include getting better control over their supply-chain technology, according to Mckinsey. Doing so should increase the level of resilience across the fashion supply chain and help drive long-term changes. Also, by taking a more comprehensive approach, businesses will be able to strive towards establishing supply-chain risk-management functions and processes. 

In the end, what it comes down to, if you want to take the business of sustainability seriously, your supply chain should not solely focus on cost. Instead, try to adopt the “doing well by doing good” approach. It is a method that steps away from the “wait-and-see” and instead embodies a “social design” intended to benefit everyone in the supply chain. 

Digitization: The Importance of Ushering in the Next-generation Digital Supply Chain

Digitization of the supply chain is no longer optional. So if you haven’t already embraced the digitization of the end-to-end supply chain, then there is no time like the present. Still hesitant? Then maybe a few facts and figures will encourage you to take the leap to a digital supply chain. According to a McKinsey study, organizations that digitize their supply chains aggressively “can expect percent annual growth of earnings before interest and taxes by 3.2%.” The American management consulting firm also forecasted that companies that use supply chain 4.0 tactics raised yearly revenue growth by 2.3%.

With that said, one could still argue that digitization is often easier said than done, but doing so could bring quite a few benefits to your supply chain. It has been noted that digitization builds transparency, improves responsiveness, reduces overall supply-chain costs, and unlocks sustainability-focused economic incentives.

As digital technologies continue to evolve, there is more pressure today than yesterday to modernize supply chains through digitization. It is a pressure that has increased more since the pandemic. “Companies have two to three years to digitize their supply chains, or they’ll face severe business consequences,” believes David Parker, Chief Evangelist with Cloudleaf and a contributor to  

With digitization looking like a win-win situation, David Butcher once wrote: “Large-scale change is hard, but digital transformation presents the opportunity to revolutionize the supply chain and generate new business value throughout it.”

So what’s next? If you are ready to transform rather than fix your supply chain, then it is worth noting that a flexible and agile supply chain will make it easier to avoid past traps and meet future needs. By making transformative investments, you should be able to address specific vulnerabilities and eliminate inefficiencies in your supply chain that do not support your long term goals of sustainability, consumer behavior, and digitalization.

Learn more about supply chain resiliency.

Written by Muchaneta Kapfunde


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