November 09, 2023

Supply Chain Complexity Intensifies

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Balancing Resiliency and Sustainability

After years of extraordinary business challenges, it’s no surprise that mitigating the risk of disruption remains the top priority for today’s apparel and fashion supply chains. With all we have been through, this is unlikely to change anytime soon.

At the same time, however, brands, retailers and consumers demand greater responsibility and sustainability at all levels of the supply chain. Very rapidly, the bar has been raised to create supply chains that are both resilient and responsible. Minimizing the negative impact on the world and the environment has quickly become a mantra across the industry.

So, let’s look at the growing importance of sustainability in supply chain management and how digital technologies can help supply chains become more resilient, efficient and responsible.

Raising the Bar

Nearly half of the 2000+ respondents surveyed for The 2023 MHI Annual Report said they face increased influences to adopt a more sustainable supply chain. The association’s recent reports have focused mainly on supply chain vulnerabilities exposed by the global pandemic (2021) and embracing ground-breaking innovations (2022). While it’s clear that many supply chains have made great strides in building resiliency over the past few years, the focus on transparency and sustainability has sharply increased.

The pressure mounts from every angle as consumers, retailers, regulators, industry groups, and others increasingly expect brands and their supply chains to adhere to higher standards. Now more than ever, your company’s stance on sustainability affects whether people want to buy from you, work for you, invest in you, or collaborate with you.

According to MHI’s CEO John Paxton, “Sustainability will become a key competitive advantage in the future. Investments in sustainability and transparency help reduce risk exposure and build loyalty with customers and employees alike.”

C-Suite to Shop Floor

For fashion and other fast-moving industries, that future may already be here.

While it is true that ownership for achieving and maintaining a responsible supply chain typically falls on internal functions like sourcing, manufacturing, logistics, and even IT, certain factors like flexibility, a sense of purpose, and governance of internal and external relationships are best driven from the top down. As a result, resilience has emerged as a strategic imperative.

In Sourcing Journal’s 2023 Sustainability Report, Editor in Chief Peter Sadera noted, “Where company ESG, CSR and impact reports were once information provided by a handful of intrepid firms, annually updates are published by virtually every major player in our industry. As always, manufacturing is in the spotlight, and once again, fashion is targeted as the culprit for a failure to address its role in our changing climate.”

The fact is that identifying and mitigating supply chain risk requires extraordinary efforts by stakeholders from the C-suite to the shop floor. Perhaps that is why three-fourths of MHI survey respondents are working with or pursuing collaboration with suppliers on supply chain sustainability. It may also explain why the same percentage of respondents are increasing Investment in supply chain technology and innovation.

Innovative Technologies

2023 survey participants identified the following among the top technological innovations reshaping global supply chains.

  • Artificial Intelligence (AI)
  • Cloud Computing & Storage
  • Internet of Things (IoT)
  • Predictive Analytics
  • Robotics & Automation

Paxton explained, “Investments in automation and other digital solutions like IoT, advanced analytics, and AI arm your operations with speed, accuracy and improved visibility. These solutions enable the real-time decision-making and transparency necessary for reporting and improving performance up and down the responsible supply chain. Along with the highly positive investment outlook, we continue to see lofty expectations for digital innovations to disrupt the supply chain industry and create lasting competitive advantage.”

Noteworthy changes to this list over recent years include a sharp jump to the top position for AI and a decline in interest in Robotics/Automation, which hovered at the top of the list for years.

Collaboration and IoT

Collaborating upstream with suppliers and downstream with customers gives companies a much deeper understanding of their end-to-end supply chain and creates even more opportunities to bolster resilience.

While automation and robotics continue to garner substantial investments in many manufacturing industries, the technologies most widely deployed across the fashion industry deliver real-time data and insights to support improved supply chain visibility, resiliency and decision-making. One technology that both enables and benefits from collaboration is the Internet of Things (IoT). In the survey, 39% of companies expect Industrial IoT to be used for customer and supplier collaboration over the next 1 to 2 years. 87% of respondents said they are already using or plan to use IoT devices and RFID tracking within the next 3-5 years.

IoT is already generating substantial new data on the production, procurement, warehousing, and transportation of goods. As IoT adoption increases, new data is created to enable more significant opportunities for advanced analytics to boost efficiency and improve performance.

Case in point, CGS’s industry-focused BlueCherry Shop Floor Control (SFC) solution leverages many innovative technologies - IoT, cloud, analytics and more - to empower manufacturers and sourcing teams with the real-time information and insights they need to transform supply chain transparency, efficiency, resiliency, and responsibility.

Accurate, Sharable, Actionable Data

Effective use of data has become a competitive differentiator for supply chain organizations. Even though many have just begun their digital journey, they are already creating substantial amounts through technologies like BlueCherry Shop Floor Control.

Resilient and responsible supply chains effectively reduce disruption risk by leveraging this accurate, sharable, actionable data that empowers all stakeholders to replace historically instinct-based decisions with data-driven decision-making vital to sustainability.

Now is the time to take action to build transparency and sustainability in your supply chain. By embracing innovative technology and rethinking the traditional boundaries of collaboration, you can achieve the balance of resilience and sustainability that is so important to the fashion industry's future.

Paxton concludes, “Competitive advantage will depend on your people, your ability to implement technologies and foster supplier collaborations that will result in more transparent, sustainable and responsible supply chains.”

The demand for resiliency and sustainability in apparel and fashion supply chains has intensified. Brands must balance the need for mitigating disruptions with the growing expectations for responsibility. Supply chains must prioritize sustainability and leverage digital technologies. Building transparency and sustainability is crucial for the future of the fashion industry, and BlueCherry can assist in achieving this balance. Contact BlueCherry to learn more about how we can help.

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