Is fashion ready for the next supply chain shock?

It is important to get out of China. In early May, G7 leaders met in Japan to discuss how to strengthen global supply chains. The main agenda: reducing the world’s dependence on Chinese manufacturing so that supply chains are more diversified and therefore less vulnerable to issues within a single market (eg China’s covid lockdowns last year). Being close to the beach is better for the environment, and it also improves lead times.

“We’re making decisions now to get offshore, which puts us where we need to be in the future in terms of sustainability. It protects us, it gives us that resilience that we didn’t have going into the pandemic,” Finch says. He says affordability comes with problems.

Technology and information are helping, though cautions against relying too much on them. “I hate the term ‘data-driven,’ because the data is not telling us what to do. It is ‘data-driven’ because the insights gained from the data enable us to make decisions. Ultimately, we’re still making those decisions. But those decisions are augmented by the technology we have now.

Attila Kiss, CEO of Grupo Florence, the manufacturing hub that buys and invests in Italian luxury fashion manufacturers and works with large French luxury groups as well as luxury brands in the UK, US and Italy, said digitizing the supply chain is important. Building forward efficiency. Grupo Florence is looking to the automotive industry for inspiration on how to do this: for example, by reducing waiting times between individual production steps and better organizing factory layouts. This cuts lead times by less than half in certain categories, such as leather goods, he said.

“This type of organization originally came from Toyota,” he explains. “The brand is one of the first to significantly reduce the time wasted between one phase and another. And from such an approach it is now possible to learn and adapt to leather goods,” he said.

The company is currently testing a new generative AI tool — which allows it to estimate the cost of creating a product instantly, rather than the current lead time of a few weeks. Kiss says this allows Grupo Florence to give brands a more accurate indication of the cost of designing a new product before creating any prototypes.

Brands and retailers are successfully transforming many supply chains by adopting new technologies and key learnings. However, businesses must continually evolve to meet the challenges and disruptions they will face in the coming years.

“The pace of change has never been faster than it is now,” says Finch. “And, I think the pressure on all supply chain professionals is that we have to be ready to learn and learn. What was true for 20 years or 50 years will not be true in six months, 12 months, 18 months. The biggest lesson we learned is that we need to do things differently.

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