Revealed: Top 2024 Challenges and Priorities - Fresh Insights from Across the Fashion Supply Chain

The pressure never really lets up in the fast-paced world of fashion and consumer goods. Cost control, economic and political uncertainty, sustainability, labor and inventory management are common concerns for retailers, brands, manufacturers, wholesalers and their supply chain partners in 2024.

More than 300 survey participants shared their perspectives in the newly published CGS BlueCherry® 2024 Supply Chain Trends & Technology Report, representing multiple business types and corporate roles. Here is a summary of what they identified as top business trends, challenges and improvement priorities for this year.

UNCERTAINTY RULES THE DAY

Businesses hate unpredictability. Contentious politics, fiscal policy, wars and trade conflicts heighten risks, make planning more difficult and influence inflation, interest rates and consumer spending. On the flip side, conflict resolution, peacemaking and decided elections can also boost business.

In 2024, uncertainty is a major concern on multiple fronts. Over 90 percent of our survey respondents said economic/political uncertainties are expected to be a supply chain challenge in 2024, yet only one-third see this as a “serious problem.”

Price/margin pressure ranked the No. 1 supply chain challenge for 2024, working its way up from being the third greatest challenge last year. Forty-one percent of respondents said price pressure would be a “serious problem” in 2024, and another 46 percent expect it to pose a “moderate problem.” So, it is no surprise that reducing costs is again considered the most critical improvement priority this year, as it was for 2023. Strategies to reduce costs include improving efficiency and productivity. Results also show companies are carrying out technology priorities to streamline and strengthen their operations, from concept to consumer.

There is also a good reason for tempered optimism. U.S. inflation rates came down in late 2023, but interest rates still make borrowing money and managing debt expensive. A September 2023 McKinsey survey of chief procurement officers found that 73 percent believe demand volatility will continue to challenge supplier relationships over the next five years.

After rushing to comply with the Uyghur Forced Labor Prevention Act in 2022, many companies caught their breath on the ESG front and fought other fires in 2023. However, sustainability and social responsibility continue to demand their attention. Nearly half of CGS survey respondents consider ESG/Traceability a serious to moderate problem.

SUPPLY CHAIN CONFIDENCE RISES

A healthy majority of respondents are confident in their supply chain’s ability to support their 2024 business objectives, but many see room for improvement. Only one-fourth are “highly confident” in their supply chains. The majority, 67 percent, are “moderately confident.” Interestingly, that same share of our 2020 survey sample population had supply chain confidence heading into 2021, having managed to survive 2020.

That almost 70 percent of survey participants had solid supply chain confidence heading into 2021 was surprising. But when we analyzed survey results for preceding years, we saw a common thread: Companies were keenly aware of the need for greater supply chain visibility and collaboration dating back to 2017. The results also showed meaningful technology investment in connected ERP, PLM and Shop Floor Control (SFC) systems, for example, to improve supply chain digitalization. These investments and strong supplier relationships paid off.

Yet when one problem lets up, another takes its place. And what seems like a good thing — a surge in demand — can also be a big challenge. In the fall of 2021, Covid’s bullwhip was beginning to unfurl. Supply chains felt the pressure to keep up with surging demand. Perhaps this led to shakier confidence as respondents took our survey in December 2021.

Analyzing the results of the most recent years, it’s likely that those supply-and-demand swings continue to influence confidence levels. Yet the results also indicate that the very same supply chain investments that helped businesses survive 2020 are helping them stay competitive now.

Comparing the two most recent years, the percentage of survey takers who said they are either “Highly” or “Moderately” Confident in their supply chains grew from 86% (2023) to 93% (2024).

Supply chain relationships mirror survey participants' growth opportunities, challenges and improvement priorities. Manufacturers are under pressure to do more — more efficiently while lowering costs and being flexible — no easy feat. Buyers and sourcing teams must work on vendor relationships — collaborating more closely on realistic timelines and sharing risks/rewards by offering longer-term commitments. The common theme is that building trust and a reliable track record between those who buy and those who supply is a strategy for success.

FASHION GOES DIGITAL

A new “improvement priority” added to our latest survey, Digital Transformation (DX), clearly has the attention of industry leaders. It made a big debut this year, with almost 40 percent of respondents saying it is “very important” and another 31 percent rating it “important.” 49% of retailers, manufacturers, wholesalers and eCommerce businesses see DX as one of their Top 3 improvement priorities for 2024.

These results reflect how digital processes, automation and robust analytics underpin success in every business growth area. DX is instrumental to every other improvement priority ranked in our research. For example, AI-driven analytical tools hone the accuracy of consumer demand planning. Also, seamlessly integrated ERP, PLM and shop-floor control solutions improve supply chain efficiency, productivity and visibility.

Digital transformation has never been more essential to meeting customer expectations, increasing sales, improving efficiency, and capturing business opportunities. Uncertainty might be the new normal, but that doesn’t mean it has to pose an outsized threat that consistently keeps you up at night.

The needle is moving forward for companies’ DX initiatives. The share of respondents who consider their efforts “best in class” remains a single-digit slice of the pie. However, there is a clear progression of businesses moving up the ladder. This is most evident in the eight percentage-point shift between those who count their efforts as “average” vs. “above average.”

Companies are serious about end-to-end supply chain digitalization. It’s their No. 3 growth opportunity and No. 4 improvement priority. It’s also the fourth most important thing respondents say buyers/sourcing teams and manufacturers should collaborate on to improve 2024 supply chain performance. An impressive eighty-three percent of respondents have completed, started or are planning digital transformation actions to overcome 2024 challenges.

End-to-end supply chain digitalization will help retailers, brands, wholesalers and their suppliers to respond to the uncertainties, challenges and opportunities that 2024 brings. Digital processes and connectivity support greater speed, agility and flexibility in responding to trends. 70% of executives see digital transformation as a very important or important 2024 growth opportunity.

Supply chain partners agreed on one thing: It’s essential to embrace technology, automate processes and digitally connect their operations. These are master keys to greater visibility, transparency, efficiency, and cost control. It's a win-win all around!

To get more details and benchmark your business against peers and competitors, Get the Free Report. To learn how BlueCherry can accelerate your ability to overcome uncertainty, realize measurable improvements and capture more opportunities, Phone +1 (315) 849-5491 or Visit the Website today.