The fashion industry has long been operating in the shadow of disruption, with the pressure being felt more keenly than ever by brands, retailers, and their partners. As 2024 unfolds, many of the same headline challenges persist across sourcing and supply chain processes: capricious consumer behaviour, ever-shifting supply chain dynamics, and skills shortages along the value chain. And the start of 2024 has highlighted two more: disruption due to geopolitical issues and climate change. The situation unfolding in the Red Sea has resulted in product delays and even more unforeseen disruption. Many fashion companies are planning to use pricier shipping methods, diverting ships to a much longer route – at an additional time, labour, and fuel cost. And to make matters worse, the second most important trade route (the Panama Canal) is also experiencing a reduction in daily transits due to a severe drought.
In late 2023, The Interline, with support from Bamboo Rose, ran a two-month survey, which was open to brand and retail organisations across the size spectrum (from revenues of $1 billion and upwards, down to turnover of $100 million and under), in the US, UK, Asia, and throughout Europe. With insights from respondents spanning sourcing and supply chain strategy roles globally, the survey delves into the current impact of technology on key sourcing challenges in the fashion and retail sectors. It also sheds light on how these industries plan to navigate the demands for speed, profitability, and sustainability in the upcoming year.
Key findings:
- At the end of 2023, most organisations reported working with fewer than 100 direct suppliers with the bulk of those being concentrated nearshore (30%) and offshore (24%). Domestic production remained relatively uncommon, being a fixture of only 15% of sourcing strategies.
- The majority of brands and retailers report having either “fair” or “lacking” visibility into what they consider to be key supply chain metrics (a combined 67% of respondents). And this limited visibility is even more pronounced for the smallest organisations, who are half as likely to rank their visibility as “fair” or “excellent” when compared to the largest multinational companies.
- Most organisations are either “somewhat satisfied” or “slightly dissatisfied” with their overall speed to market – citing long development calendars and difficulties in making decisions as key factors in this sentiment – and only 10% of business report being “extremely satisfied” with the speed of production.
- The vast majority of supply chain risk management is also conducted entirely manually: more than 70% of respondents reported using manual processes to either predict or react to supply chain disruptions, or to surface and understand their risk exposure in raw material sourcing or manufacturing.
These snippets offer a glimpse into the comprehensive information available in the full report, which contains valuable information for fashion companies across the board.
The report also has other essential information for all those in the sourcing and supply chain strategy space, including:
- The highest strategic priorities for fashion companies and their sourcing partners are for the year ahead.
- The criteria brand and retail organisations intend to use when choosing new software and expanding existing platforms.
- What participants identified as their most acute supply chain challenges and primary barriers to more efficient sourcing and supply chain processes.
- The Interline’s recommendations for brands and retailers, of all shapes and sizes, as to where technology can deliver the strongest return on investment in their sourcing and supply chain activities.
- And much more.
About our partner: Bamboo Rose is a leading product development and supply chain platform empowering retail results through collaboration and efficiency. By accelerating data-driven decisions, streamlining operations, and promoting sustainability, we support our customers to thrive in the competitive landscape. Our mission is simple: enable retailers to increase revenue, reduce costs, and mitigate risk.