2023 Here We Go: Let’s Solve Supply Chain Challenges!

The only constant is change. 2023 will be no different. Be ready with the right processes and technology solutions to strengthen your supply chain Achilles’ heels, win more business and sell more products.

“Fashion companies will need to rethink their operations,” wrote McKinsey and The Business of Fashion in The State of Fashion 2023. “Many will update their organizational structures, introducing new roles or elevating existing ones to target key growth opportunities and respond more effectively to risk. Brands may also choose to see [2023] as a time to team up with manufacturing partners to sharpen their supply chain strategies. This may involve nearshoring to better respond to fast-shifting consumer demand or leaning more heavily on data analytics and technology to manage inventory efficiently.”

Clearer Visibility to Choices: Materials, Production and Products

Mastery of fundamental business activities — such as knowing fabric, trim, manufacturing, and product availability — requires sharpened skills, fresh strategies, streamlined processes and the right technologies. Your 2022 playbook, much less that of prior years, might not cut the muster in 2023. Continuous process improvement is necessary for survival and success amid:

• New digital and physical shopping experiences
• On-again, off-again Chinese factories
• Growing Central American/CBI textile infrastructure
• Sourcing opportunities and challenges in other regions
• Inflation worries and price pressures
• Labor shortages
• New on-demand manufacturing solutions

What products can you make or source? How quickly? How resiliently in case of the unexpected? What are the back-up plans?

To answer these questions, a company must connect the dots, from design to delivery. When this is done digitally across the supply chain, such digital transformation exposes business-critical information for stronger, faster decision making. This includes automatically exchanging data with key supply chain partners, including real-time insights from the factory floor. The Holy Grail many companies are working toward — and some starting to seize and partake of the benefits — is digital product creation (DPC).

Ben Hanson, editor in chief, The Interline, said DPC holds powerful advantages far beyond the design-to-sampling processes where it got its foothold. “To limit the potential to just sample replacement is to dismiss a complex, thriving, multi-faceted ecosystem of technologies, formats, and solutions that are driving the entire fashion industry toward a fundamentally different way of working,” he said in The DPC Report. “Name a strategic objective in fashion, and digital product creation (DPC) will have a hand in realizing it — and probably sooner than you might expect.”

“Sustainability. On-demand production. Customization. Collaboration. Creative empowerment. Metaverse and digital fashion business models. Supply chain connectivity. Costing. Material consumption. DPC is already having a measurable impact in all of these areas, and the true scale of its impact will become evident when each of them is anchored in the same digital asset — fulfilling the vision of having a single 3D representation of a product that can stand in for its physical counterpart at every possible stage in its lifecycle,” Hanson said.

Greater Clarity, Better Communication: Streamline the Complex

New environmental, social and governance (ESG) regulations anticipated in 2023. Yet for many businesses, it’s a struggle to navigate regulations already on the books. Brian Rosenstein, CEO, TSG Finishing LLC, wrote in a Textile World article that he spends half his time dealing with confusion over polyfluoroalkyl substances (PFAS). This broad category of chemical finishes has gotten a bad reputation even though only a small PFAS subset has been linked to eco and health hazards.

“We’re no longer trying to sell customers on something they need and instead are dealing with regulators on science,” he said. “Customers can be persuaded by science and facts. Regulators will only process enough information to fit their agenda, which leads to poor decision-making.”

Companies like TSG and industry associations must engage in ESG conversations to ensure innovative solutions aren’t lost amid the confusion, Rosenstein said.

Another way to cut through the oft-mystifying ESG fog is to systematically share supply chain information. When buyers and suppliers collaborate digitally, they make more informed decisions based on science, facts and what’s best for business.

Stakeholders from consumers to retailers to governments demand more transparency. Technology enables apparel brands, retailers and manufacturers to know their supply chain “family trees” beyond tier 1 suppliers. What’s more, it pays off to keep trading partners in the proverbial loop, digitally. By doing so, businesses not only meet ESG objectives but move faster and improve productivity and efficiency.

“It also helps a lot when supplier and buyer have systems in place that align on a ‘Single-Version-of-the-Truth.’ Technologies such as electronic proof-of-delivery and, especially, networked platforms — where buyer and supplier are literally using the same system for POs, ASNs, receipt, invoicing, and payment — can help reduce the number of disagreements and back-and-forth negotiations that result when each side has different record-keeping systems,” wrote Bill McBeath, chief research officer, ChainLink Research, in part three of his series on procure-to-pay (P2P) processes.

“In spite of the availability of technology, there is a considerable lack of automation throughout the P2P process. We see multi-billion-dollar companies that take the output of an MRP system, type it into a procurement system, and then send the PO via email or even fax,” McBeath said. “Similarly, manual data entry and paper-based systems are common throughout the P2P cycle in companies of all sizes. Often, the existing system is deemed ‘good enough.’ However, many companies are missing out on valuable improvement opportunities by not automating these processes whenever it makes sense.”

CGS can help your business implement the right processes and technology solutions in 2023 to solve your supply chain challenges. Subscribe to our blog today to keep up with our latest industry insights and thought leadership.