6 ways to revamp the fashion supply chain
Now is the time to redesign the clothing supply chain for the post-pandemic world – and trust, transparency and traceability must be the guiding forces, according to Lynda Petherick, head of UK retail at Accenture
Since the Covid-19 pandemic arrived, fashion consumption has paused and the frenetic pace of production has been put under the microscope, with people and businesses reassessing what they really need and what is really right. Sustainability and transparency must be front and centre as retail businesses press play again.
There is no one solution to such a complex problem, made even more challenging due to the current environment. Creating meaningful change will require a huge amount of collaboration across strategy, transparency, trust and guidance. Technology will not solve all these issues, but it can be used to improve conditions, trust and transparency in nearly all of them, all while helping retailers shift to a circular business model.
Research conducted by The Dock, Accenture's flagship R&D and innovation centre, finds an emerging picture of a sector ready for disruption and willing to change. We identified six key considerations for restarting the fashion supply chain and addressing sustainability in a post-pandemic world:
#1: Make sustainability systemic by integrating it into the heart of business strategy.
Brands and suppliers must align their existing purpose with sustainability goals and consider it against measures of business growth, making sustainability an equivalent factor to cost, leadtime and quality. As we embark on what many believe to be the 'decade to deliver' on the UN sustainability goals, it is crucial that retailers are considering society and the planet as additional stakeholders to truly have an impact.
#2: Use technologies such as advanced AI to better predict demand and reduce excess stock
Sustainability only works if brands and suppliers understand how to reduce their negative impact on the ecosystem, whilst maintaining and growing their business in the long term. Not only that, these technologies are important enablers for transitioning to a circular retail economy by reducing wastage and keeping products, equipment and infrastructure in use for longer.
#3: Develop partnerships and build strategic industry-wide relationships.
This will put organisations on the leading edge of the industry while committing to greater transparency and encouraging open communication. For example, by incentivising better relationships through community initiatives around education, grants and fair trade or by improving payment terms and access to financial and other services as a response to full transparency. Technology is a key ingredient here. While it will not solve the problem, it will enable collaboration by making data available, facilitating communication and idea sharing, automating processes and providing planning visibility.
#4: Global industry standards are needed for sustainability guidelines and working practices.
The creation of a garment is a global event, crossing countries and language barriers. If codes of conduct, process steps and guidelines were standardised, every player in the ecosystem would understand the rules of engagement, no matter where they are in the global supply chain. But it's difficult for retailers to keep up with intricate and changing sustainability or ESG requirements demanded by regulators, consumers and NGOs. They tend to develop their own policies and standards, which only add to the complexity and variability. It's a complex challenge, but working together with industry bodies towards common standards will drive the right kind of change. Thankfully the industry already operates in an environment of high interdependence but there is a greater need for technology platform solutions to facilitate information sharing.
#5: Standardise audit requirements and frequency.
Brands should collaborate to radically improve the efficiency and visibility of one of the most challenging parts of the apparel supply chain. For brands, this means working to standardise audit requirements to reduce duplicate audits and excessive supplier expense, and to share the audit burden. In turn, suppliers must review their policies around external visibility of their audit results. Initiatives such as the SLCP (the Social and Labour Convergence Program), Higg Index, Better Work, Sedex and Fair Factories Clearinghouse have enabled great progress here already.
#6: Legacy systems need a radical restyle.
Brands and suppliers are collecting and processing formidable amounts of data. There's a real opportunity to manage this data more effectively and leverage its insights to make better decisions, enable circularity and reduce wastage.
When it comes to sustainability and the supply chain, doing nothing is not an option. Brands no longer have the luxury of choice around whether to share their consumers' values. The risk is higher when it comes to fashion: this is an industry where the consumer expects to see their own shifting values and tastes reflected almost immediately on the rack.
In a post-Covid world, customers are likely to be even more discerning, so the need for a responsible value chain has never been more urgent.
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