- Long lead times in fashion’s supply chain lead to a fundamental mismatch between supply and demand, creating excess inventory, products that are mis-timed to meet trend windows, and an inability for brands to react to changing and unpredictable market conditions.
- Opaque webs of suppliers in the fashion industry result in a lack of transparency and control. Outsourcing production to a complex network of suppliers cuts costs but hampers transparency and control over social and environmental standards.
- The fashion industry’s often outdated technology hampers innovation and data management. Labor-focused cost savings have left the industry with outdated facilities and manual processes, hindering innovation and effective data management.
- Shortening supply chains can increase flexibility, control, and sustainability. Insourcing production and reducing intermediaries can give brands more control, adaptability, and the ability to implement sustainable practices. Opening supply chains to emerging fashion entrepreneurs can empower others to contribute to systemic change.
I argue yes. Or at least they can be. But let’s begin with a closer look at how fashion’s supply chain is typically structured:
Long lead times
As a start, everyone works roughly one year ahead: what’s presented during fashion weeks and trade fairs in June 2023 isn’t meant for summer 2023 but for summer 2024. So brands and buyers take a guess what styles and how many items will sell in around 12 months when placing orders. Considering the unstable state of the world we live in as well as the fast pace of contemporary culture, it doesn’t take a genius to figure out that many will bet on the wrong horse. But that’s only part of the problem. As it’s usually more economical to order too much than to miss out on a potential sale, orders are usually higher than expected demand.
The result? Mountains of unsold stock. According to McKinsey, a staggering 20% of all garments produced never reach the customer (McKinsey). And we can rightfully assume that the real numbers are even worse as, currently, brands are not obliged to disclose how much they overproduce. Sounds absurd? It is. Especially when considering all the resources that go into producing items that will never be used as well as the resulting waste that needs to be handled.
Opaque webs of suppliers
More often than not, a garment goes through many hands, many suppliers, and many countries before it lands on the shelf. In an effort to cut costs wherever possible, brands have outsourced production to an opaque web of suppliers. What they gained in unit cost savings, they lost in transparency and control. As a result, they’re not only struggling with a lack of flexibility but also with a lack of social and environmental standards.
The collapse of the Rana Plaza factory building in Bangladesh in 2013 caused the tragic death of over 1000 people and moved the industry’s inhumane working conditions into the spotlight (International Labor Organization). From a lack of security and poor work environments to late payments, overtime, and abuse, the list of social issues associated with garment manufacturing is long. According to the International Labour Organization, almost 21 million people in the world are victims of forced labor within the clothing and textile industry—11.4 million of these are women and girls.
The waste caused by overproduction aside, the clothing industry has a detrimental effect on the environment. From growing raw materials like cotton to dying and finishing, the industry consumes huge amounts of resources. According to estimates by WWF for example, it uses about 200 liters of water to process, dye, and finish each kilo of textiles, amounting to 378bn liters of water annually (Good on you). However, the industry also has a track record of polluting the environment with chemicals that are threatening human health as well as nature. As The Guardian reports, “Some of the chemicals scientists have found in garments – such as tributyl phosphate, dimethyl fumarate, and disperse dyes – can be acutely toxic or hazardous, causing skin reactions or asthma. Others have been proven, outside of their use on clothing, to have links to cancer, reproductive toxicity, allergies, and skin sensitization.” Lastly, it relies heavily on cheap, synthetic fibers: polyester has now surpassed cotton as the most widely used fashion fabric (Niinimäki et al., 2020). Carbon emissions from synthetics are much higher than cotton because they are made from fossil fuels such as unrefined petroleum products. It is estimated that CO2e emitted to produce one polyester t-shirt is more than double that of what is associated with producing a cotton t-shirt (Kirchain et al., 2015).
While other industries have invested in technology to improve efficiency, fashion has moved production to wherever labor costs were cheaper. As a result, fashion is struggling to keep up with the technological advancements of recent years and outdated production facilities that primarily rely on manual labor hamper innovation. According to McKinsey, fashion brands only invested 1.6-1.8% of sales in technology, a number that’s expected to double by 2030 (McKinsey).
A key issue that comes with the fragmented and primarily analogue production process is the lack of data: important information about e.g. a raw material or the production status of an item is often not available and even if it is, it usually can’t be stored and handed over due to a lack of digital infrastructure. Consequently, the effective management of inventories and traceability from raw materials to the finished product is often impossible.
But the problems don’t start with garment manufacturing, they already appear during product development. From fabric swatches to sampling rounds, a lot of material needs to be produced and shipped around the world so that brands can eventually commit to launching a certain style that will often only be available for a few weeks.
It’s fair to say that the current state of things looks rather bleak. And amidst upcoming EU regulation, recession, and the aftermath of the Covid-19 pandemic, it can be hard to figure out how to go about this much needed transformation. But the good news is, there are alternatives and they’re already being implemented.
The first step: shorten supply chains.
Shorter supply chains increase flexibility and control. Both are absolutely crucial to a) adapt to changing trends in market and economy, b) leverage technological advancements for e.g. digital sampling, and c) implement more sustainable practices in line with legislation. One possible way that takes this to the extreme is to insource production, a key recommendation in the new edition of “The State of Fashion 2023” (Business of Fashion and McKinsey).
In an industry where outsourcing is the norm this might sound overly ambitious, some might argue impossible. It’s not. How do I know this? Because at Son of a Tailor, we’ve done it. Having our own production gives us access to drive change right where we can have the biggest impact, in the supply chain.
But is this an option for every brand? No. Especially up-and-coming brands and creatives often find themselves caught between the industry standard with long lead times, an opaque web of suppliers, and outdated technology on one side, and a lack of expertise to build their own supply chain on the other.
That dilemma sparked an unconventional idea: we decided to open our supply chain to the next generation of fashion entrepreneurs: at SON Supply, we enable them to turn their vision into reality without compromising their values. Minimum order quantities of only 50 items, check. Delivery times of as fast as two weeks, check.
I’m convinced that we can only create systemic change if we find our niche, master it well, and then empower others to make their contribution. With Son of a Tailor, we strive to do exactly that.