Repairing the apparel supply chain 

THE CHALLENGES

According to the recent Office of Textiles and Apparel (OTEXA) data, the volume of US apparel imports has dropped.  

University of Delaware’s associate professor of apparel and fashion studies, Dr Sheng Lu, explains: “There is a lot of uncertainty in the US economy such as how to deal with inflation which impacts consumers’ consumption of clothing. And, even though we’re seeing shipping costs go down, companies still face rising sourcing costs so it’s a really challenging time.” 

Now is a great time for apparel brands and retailers to test friendships and partnerships with vendors. 

“Like it or not, fashion brands and retailers still have a lot of leverage over vendors and can do a lot to support them during these difficult times,” says Lu. “It’s about how you deal with your existing sourcing orders and when you’re willing to make the payment and the price you’re willing to pay. I still think there are many areas where brands and retailers can engage in dialogue with vendors and show support.” 

A key lesson learned during the pandemic is the relationship between vendors and importers is critical to the success of the whole industry. 

Inventory accumulation occurring downstream has caused a ripple effect across the supply chain and it’s created imbalances between supply and demand. 

Gherzi Textil Organization’s partner Robert Antoshak, explains: “Coupled with that are the unknowns of the war. Our industry might not be involved in those markets other than in a limited way, but it’s had a ripple effect that’s carried over into so many other areas. The unknowns of the conflict will weigh heavily on the entire apparel supply chain going all the way back to the farm. It will lead to imbalances throughout the supply chain and create difficulties for all.” 

Antoshak notes the recent Pakistan floods have affected the textile and cut and sew sectors directly with a lot of factories being hit. Additionally, the remaining portions of Pakistan’s apparel and textile industry that were not affected are now struggling with the shortage in domestic cotton. 

“The US has been a large importer of Pakistan cotton in recent years but what happens when Pakistan is forced to import cotton from say the US? It also comes at a time when a lot of Texas cotton crop was lost due to a drought. Normally, you’d think that would pull prices up, which would increase the operations for the Pakistan mills. Plus, a lot of cotton sales are priced in dollars so when you combine all of these factors it is a really challenging time for Pakistan’s apparel industry.” 

Lu explains there is some concern that brands, and retailers will overlook the ongoing climate change issue such as the impact of the floods in Pakistan in favour of more pressing topics. 

Fortunately, he says, his research shows this is not the case: “I recently did a study in collaboration with the US Fashion Industry Association (USFIA). We spoke to some of the largest US fashion companies who said they plan to dedicate more resources to the issue of sustainability. This includes investing in education for staff and vendors to develop a more sustainable and socially responsible sourcing model.” 

He believes companies are changing their mindset around the issue: “In the past it was viewed as a burden but these days more companies see sustainability as an investment that will provide a financial return in future.” 

“One current project I’m working on is to understand companies’ sourcing strategy for clothing made from recycled materials.” 

He explains sourcing these products can help fashion companies achieve their goals such as how to reduce their reliance on China, how to diversify the sourcing base and how to expand nearshoring and onshoring and improve speed to market. 

Sourcing diversification continues to be the main theme because sourcing executives must consider a lot of factors such as cost, speed to market, flexibility, agility and all kinds of compliance risk. 

“Like it or not there’s no perfect supplier out there and all countries have their own advantages and disadvantages,” says Lu. “This is why brands today need to source from a diverse group of countries to balance all these factors. Some products might have speed-to-market as the priority so that will be sourced closer to home, for example.” 

Strengthening the relationship with key vendors is also incredibly important, he adds. 

THE SOLUTION

Anotshak believes the solution to these problems facing the apparel sector is two-fold: “Firstly, sourcing diversification is important. For many years brands got complacent and were sole sourcing, which worked well for them at the time. 

But the reality today, he says is: “Supply chains are disrupted, and economies have become messed up and not to mention the fact we have a war thrown in now too.” 

The second part of his solution lies in partnerships. He said: “This isn’t just about buying from vendors 1, 2 and 3 or tiers 1, 2 and 3. In order to succeed these partnerships need to go deeper than that and become established. 

“The brands and retailers who are implementing sourcing diversification and partnerships will have a much better chance of navigating this difficult river that we’re all on right now.” 

Lu agrees with Antoshak, adding: “The companies that are willing to invest in the future will be more likely to succeed and reap the rewards. There are a lot of areas that companies can invest in right now such as sustainability and new technology and this also includes investing in our young future professionals too.”