Watch out for the five key trends in 2021 that are expected to reshape an apparel sourcing sector that was “riddled with problems before Covid-19”, a report by GlobalData says. Taking a global pandemic to push much-needed changes to the forefront, it said those five key issues “are rewriting the rules on apparel sourcing”.
They are: building greater resilience in sourcing networks; rebalancing apparel supply chains; embracing strategic supply partnerships; fast-tracking digital investments; and adopting end-to-end visibility.“Many companies are already changing the way they operate, and it is clear the [pandemic] ramifications will continue well into 2021 and beyond”, said Leonie Barrie, apparel analyst at the data and analytics company, who compiled the report.
She said building greater resilience in sourcing networks is a key priority for buyers “to build greater resilience in their sourcing networks by avoiding dependence on any one country, identifying vulnerable parts of their supply systems, such as component availability, developing alternative sources, and reviewing and upgrading their contingency planning”.
Barrie notes: “Resilience has rarely featured in supply chain reviews, but companies must now build it into their operations if they want to avoid getting caught out in the future”.
On rebalancing apparel supply chains, Barrie states: “If there was ever a time to rebalance supply chains for greater responsiveness and flexibility, then it is now. Moving some production closer to market and shifting orders out of China is already underway, with Asian competitors such as Vietnam, Bangladesh, and Cambodia picking up the slack.
“Even so, building new supplier relationships is easier said than done - as is finding locations with adequate infrastructure, including ports, logistics, fibre, yarn, textiles, trims, quality services, and production availability.
“It is also clear that China’s apparel and textile capabilities mean it will continue to dominate global garment production for some time to come”.
On embracing strategic supply partnerships, Barrie continues: “The loss of trust between buyers and suppliers – through order cancellations, broken contracts and withheld payments – was one of the first casualties of the pandemic and is rewriting the rules on buyer-supplier relationships.
“A move towards deeper partnerships that bring greater agility and accountability will help avoid a repeat of the pain and financial loss many suffered in 2020”.
Looking at fast-tracking digital investments, Barrie says: “Long talked about as the next frontier in apparel and footwear supply chains, it took the pandemic to fast-track digitisation into action. Technologies for 3D modelling and digital sampling, virtual showrooms, product lifecycle management and quality assurance and auditing are contributing to smarter, faster and more effective decisions, less fabric waste, and a smaller carbon footprint, as well as new insights into consumer purchases and next season's fashion trends”.
She also notes on end-to-end visibility that there is “increasing pressure on fashion brands and retailers to document their supply chains from raw material source to importer. Tools are being developed to trace and verify complete end-to-end supply chains, including blockchain, forensic science, and DNA tagging”.
Barrie concludes: “Early adopters of end-to-end visibility tools will be best-placed to provide consumers with more information on the products they purchase, as well as satisfy regulators and investors who are increasingly concerned about being exposed to unethical practices, legal risks, and reputational damage”.