The state of play of the apparel industry amid the COVID-19 pandemic does not look that good! Apparel companies have witnessed disruption, bankruptcies, cash flow problems due to constant changes in payment terms, and logistic issues. What a great opportunity to reimagine the whole supply chain!

Supply chain management issues exposed.

Apparel industry experts report that the supply chain problem is not new; COVID-19 just exposed it. For many years, apparel companies have been pressured to improve speed, to lower costs, to be continuously innovative, and to be reactive to customers’ needs.

Today, there is clear evidence that the market requires rapid supplies. In this case, in a competitive context, companies which can manage efficiently the supply chain will stand out. Fashion companies and brands are obliged to adopt new sourcing strategies. Where to source? They can choose to keep working with the same suppliers in the same countries or to focus on fewer suppliers. It is a complicated issue – a dilemma, considering that insufficient diversification in sourcing was the main source of disruptions. It is a debatable decision to over-rely on only one or two suppliers. On the other side of the business, the crisis constrained fashion and brands to work and strengthen their relationships with only key vendors.

Apparel specialists predict that companies will source more in the neighbouring regions. However, the shift to near-sourcing will not abruptly happen because it needs important investments. The US and Asia-based companies are expected to turn to other Asian countries such as Vietnam, Cambodia, and Bangladesh. Asian firms may want to accelerate their vertical integration abroad: in Southeast Asia, in Africa or in the Americas.

Regaining the market

In 2021, fashion companies and brands need to rebuild trust and strengthen their relationships with both buyers and suppliers. They are required to stay aware of trends and to keep in mind that customers are currently looking for fast and quickly available fashion. However, they must manage their stocks efficiently and be as flexible as possible.

Digitization and circularity

Are physical fashion stores disappearing? Specialists explain that even though online sales will continue to grow, they will not totally substitute physical stores. In the meantime, they predict that every aspect of the chain from the design to the quality control will go digital within five years. In the same way, sustainability, circularity, and carbon neutrality are central focuses at every stage of the supply chain, from the design to the selling and even beyond.

What were the lessons learnt from COVID-19? Agility, flexibility, social responsibility, and improved management of the supply chain are the key drivers of success in the apparel and fashion industry. Admittedly, competition in this industry has become supply chain-based. At the sourcing level, even though regional sourcing starts winning ground, rich countries will keep importing clothing mainly from China. Africa is not likely to become the giant of clothes manufacture any time soon.

Source: Just-Style Apparel Sourcing Strategy.