Every week, The Interline analyses up the most vital talking points from across the landscape of fashion technology news. This analysis is also delivered to Interline Insiders by email.
The race to multi-tier supply chain visibility shifts into a higher gear.
Earlier this week, Fast Retailing (which owns the wildly successful UNIQLO brand) put out an unprecedented statement. Responding to the January “seizure” of a shipment at the US border, UNIQLO claimed publicly that the entire, multi-tier supply chain of the garments in question was fully documented and that no evidence of forced labour had been shown either in these particular products’ provenance or, for that matter, in any of UNIQLO’s supply chains.
At first glance, this is not an exceptional document. No brand would say anything less in these circumstances, which are disputed between sources, but which seem at the very least to boil down to the US Customs & Border Protection (CBP) declining to release products that it deemed to have been associated with China’s Xinjiang region.
Unpick it, though, and there are far-reaching implications for both the precipitating incident and for the way UNIQLO has responded to it.
First: this case is something of a landmark in that it appears, on the surface at least, to make little distinction between raw material sourcing, the various processes of cotton assessment, blending, ginning and so on, and the operations of manufacturing and assembly. For the CBP’s purpose, it seems sufficient that for a finished product or any of its constituent parts to have passed through Xinjiang – towards which strong accusations of forced labour and much more insidious oppressive of the Uighur population continue to be levelled – in order for those products to be refused entry into the United States.
This is a multi-faceted issue not just because China produces (and uses) a significant amount of the world’s raw cotton fibres, but because exports from Xinjiang into the USA – and almost certainly into the UK and Europe as well – have continued to rise even while sweeping importation bands have been in place.
In this context, it’s not unreasonable to assume that very few brands and retailers will be able to truly, confidently, and with the backing of unambiguous evidence declare that their products are completely divorced from the Xinjiang region. This is because very few brands and retailers have genuine multi-tier visibility into their supply chains.
Tier 1 factories? Yes. Tier 2 material suppliers? Perhaps. Raw material producers? Again, maybe. But the full spectrum of dyeing, ginning, component and trim sourcing and so on? It’s unlikely. And notably, the Fast Retailing statement stops short of saying that documentation was provided in all of these areas.
Secondly: the crucial part of this story is not that brands lack supply chain visibility – this is not exactly news – but rather that the onus of proof is likely to be placed on brands rather than regulators. Until this case came to light, there may have been an expectation that a customs agency would need to demonstrate that a product had, at some point in its lifecycle, been associated with Xinjiang. This is clearly not the case. Instead, it will be beholden upon the importer to demonstrate, to an exacting degree, that its products, raw materials, and production processes do not touch upon areas of exploitation or – as time wears on – potentially regions where geopolitical tensions are high.
The difference may seem subtle, but the consequences could be pronounced. Rather than the current model, where supply chain investigations and exposés are typically conducted by NGOs and journalists, the future looks as though it could be much more broad-brush. Government bodies and customs agents will not need to prove that a brand’s products are the outputs of ethical and / or environmental transgressions, they will simply ask the brand to prove that they are not.
In this regard, UNIQLO also stands as a strong case study for the longer-term ramifications, since the brand does significant business in licensing and media collaborations, putting more than just its own reputation on the line.
In a very real sense, this story has shifted the race for multi-tier supply chain visibility into a higher gear.
And the best from The Interline this week:
This week we published two new op-eds from new authors, on wildly different fashion technology topics.
First, 3D artist and digital material author Paras Gupta shared the workflow and the solutions that allowed him to produce such impressive digital denim.
Second, Sanne Schoenmaker set out a case for why automation of patternmaking could be the key to creating a smooth on-ramp to demand-driven production.
Next week we have an exclusive new feature from senior contributor Brooke Roberts-Islam, and more.
