02 January 2023, Mumbai
This sector is characterized by a worldwide supply chain that is highly interconnected. This is a brief overview of the textile industry's supply chain against the backdrop of evolving/ever-changing dynamic business environment in the wake of constant consumer demands, amid fierce competition aiming to reduce the adverse impacts of the manufacturing process of fashion, textile, and footwear industries on the planet.
Apparel/Clothing collections often fluctuate since their lifecycles are brief, and prominent seasonal peaks mark their commercialization.
Today, in a VUCA (volatility, uncertainty, complexity, and ambiguity) world where uncertainty is new certainty and when all supply chains are vulnerable to disruptions the textile value is no different.
Disruption in Textiles GSCs
What makes the sector concerned
How bad are things in this highly interconnected global world where everything affects everything?
One family one earth one future
'Supply Chain Geopolitical Risk' is the top risk GSCs are facing
GSCs are vulnerable to disruptions in response to black swan events like the pandemic.
What moves the needle Rising consumer demand for sustainable textiles.
Good actors and bad actors
A Sector notoriously infamous for polluting the planet needs to reduce the adverse impacts of its manufacturing process.
Apparel collections since their life cycles are brief, and prominent seasonal peaks mark their commercialization again resulting in a deep impact on the planet sending great consumer waste to landfills given that clothes are hard to recycle and are not biodegradable most of it.
Technology trends shaping the industry. The growing sectoral influence of blockchain technology is evident and palpable and, there is a case for its intervention even in the textiles/apparel supply chains.
Turn Around Time Vs. Lead Time
Emerging technologies such as Technological solutions ranging from biotech textiles to predictive analytics are supporting the case. GSCs are consciously putting efforts to make sector supply chains more resilient and reliant through what you call assiduous & unambiguous friend-shoring by tightening those ties/bonds to achieve favourable outcomes.
New Paradigm
Reducing the lead time and cost of the product is the SCM's (Supply Chain Management) primary goal driving change. The COVID-19 epidemic has thrown up many questions, forcing clothing and textile (C&T) firms to reconsider their current processes and make immediate adjustments to manage their future and, in a greater sense; Re-adjustments to manage future Insights indicate sector needs to reconsider/revisit the current processes as a re-imagination.
VOCAL For LOCAL Realignment of the supply chain will take some time. Dialing back; Businesses have been struggling with supply chain problems as economies recover from the Covid pandemic.
Times, when China is interested in moving manufacturing out of China on the back of fast aging population. Additionally, global players having a large sourcing base in China, are in a state looking at especially China Plus/China plus two/China alternate/Europe plus one strategy given that China being globally is numero uno among garment and textiles exporters and dominates the show & supply chain diversification plan, provides chances for Indian players.
In the meantime, insurgent firms are upending the accepted paradigms of fast fashion and garment selling in response to a global supply-chain shock.
Complicated supply chains
Contrary to value-added chains for food or construction materials, textiles, and clothing (T&A) have numerous process stages carried out by various subsequent industry units, and what further complicates the process is a more comprehensive range of fiber materials is used to create textile fabrics.
As we see resources getting more scarce and, the impending "Law of Inverse Consequences" of the US-China trade war has already made the situation unamenable upending the global textile economy turning the supply chain on its head.
De-risking global supply chains (GSCs)
The Economic Scars of impending global recession; Realignment of the supply chain will take some time.
Their common goal is to make the global supply chains of the textile industry sustainable. The principle guiding force for GSC rejigs/reinvigorating figuring out how to de-risk & build credible alternate GSCs of intermediate goods and services is quite a challenge in the anxious times we are living in.
The disruption in GSCs caused/upended by covid-19 adversity, followed by another demand and in some sense supply shock battering the global textiles and garment industry's (T&C) supply chains gasping for revival, throwing companies and other stakeholders in a tizzy.
The scope of technology
Blockchain and supply chain management; This tech cost is becoming more affordable and efficient making (GSCs) global supply chains more supporting businesses to help complete transactions directly and without involving third parties therefore, facilitating greater integration/interdisciplinary of financial and logistics services, thus resulting in an augmented data collaboration between multi-stakeholders as a holistic business approach.
Supply chain mapping technology, and work ethos filtering all the variables in pursuit of operational & manufacturing excellence.
Turning the situation on its head; The execution challenge starts when you let technology take over and expect action-oriented, scientifically underpinned, and transformational as one bit is that intrusion of tech intervention needs the business leaders to be on the top of the agenda and in a mindset to replace the human interface with technology in part or complete for the technology sound effects to play out in this diverse world.
Times when transparency, traceability, and sustainability are the key issues.
The growing sectoral influence of blockchain technology is evident and palpable and, there is a case for its intervention even in the apparel supply chains, the use of blockchain replaces the centralized conventional distribution system which may not be as great/robust with a decentralized immutable ledger which is so much easier integrating the supply chain stakeholders/actors that too all with the real-time information sounding music to ears as in nutshell it is a power of collaboration at play.
If you can’t measure you can’t improve
Strategies for mitigation; The Higg MSI is an invaluable tool for assessing the environmental impact of processes and materials utilized in the products empowering us to make more sustainable design choices. The Higg MSI measures environmental impact across five areas: global warming potential, pollution in water, chemistry, water scarcity, and fossil fuel depletion.
Advanced tools and resources, like the Higg MSI, align with the customers’ goals to design and produce sustainable apparel.
Way to go
Exploration towards a new agreement for responsible supply chains in the garments and textile sector. Realignment of the supply chain will take some time this being a legacy issue. The industry needs innovation in order to transition from linear to circular ways of working.
Dialing back to pre covid for textiles supply chains were fragile & fractured and COVID-19 only exposed it and exacerbated it.
Space to watch out; What is the need of the hour is the industry’s serious sustainability commitment including establishing Supply Chain Standards and Responsibility Code, adopting a Responsible Sourcing Policy, conducting sustainability assessments for strategic suppliers, and capacity building for strategic suppliers on GHG emissions accounting, among others.
As we move ahead the enterprise's success will depend on how well it checks the boxes right in this competitive landscape and no better place to invest.
