2022 Year in Review: Fast and Furious Change Drives Digitalization

Digital transformation went from “nice to have” to “necessary for survival” in 2022 as fashion, retail and home goods businesses grappled with supply chain issues, global sourcing pressures and fast-changing retail dynamics.

Here is just a taste of impactful insights that spiced up our 2022 blog:

• “Fast and furious industry changes have driven record adoption rates of many technologies once considered discretionary,” from "Top 5 Skills Needed for Digital Transformation"
• "You can’t always anticipate everything, but you can minimize your risks by expanding and strengthening your supply chain partnerships so that you can act much faster, pivot and move production to a different area if there is a disruption in another area.” — Paul Magel, president, Business Applications and Technology Outsourcing Division, CGS, from “Tell It Like It Is: Agile Communication on the Shop Floor”
• “Crisis is the new normal. What we have been used to in the last decades — low inflation, international trade — it’s over.” — Alexandre Bompard, chairman and CEO, Carrefour, from “Resiliency Amid Uncertainty: What Have We Learned”
• “The pandemic and geopolitical issues have triggered a mindset shift among buyers, who are putting greater focus on total costs, risks and profits vs. the least expensive 'first price' (price-per-unit).” — Confexsa President Roberto Bequillard, from “Successful Supplier Relationships Think Beyond Price”
• “Our findings confirm that dramatic change is underway. Half the companies surveyed have embarked on organizational transformations by revamping their sourcing and design processes, their ways of working and their commercial priorities.” — McKinsey & Company, from “Technology and Taking Americas Needlework to the Next Level”

Shaking Up the Sourcing Mix

Retail, apparel, and home fashions businesses took a hard look at their supply chains in 2022. Many focused on optimizing their global sourcing mix or speed, efficiency, agility and resilience. The McKinsey & Company survey mentioned above tapped views of chief procurement officers from 38 international brands and retailers.

• 71% of chief procurement officers planned to increase nearshoring operations
• 8 in 10 North American apparel players plan to increase sourcing in Central America

Source: McKinsey & Company

“For U.S. companies, Central America is highest on the list for future nearshore activities,” said McKinsey.

Confexsa is a manufacturer at the center of this shift. Based in Nicaragua, Confexsa has 1,600 workstations — and more on tap for 2023 — to produce workwear and woven apparel for customers such as Carhartt, Boot Barn and Ariat. “Instead of wanting millions of one style, buyers now want multitudes of small lots of assorted styles. There is heightened wariness about carrying too much of the wrong product, and sourcing smaller order runs closer to the market reduces this risk. The market has changed, and manufacturing must adapt to that change and become a lot more flexible,” said Bequillard in a CGS white paper on building stronger supplier relationships.

Companies like Confexsa are investing in technology to manage production, including CGS BlueCherry® Shop Floor Control (SFC). In fact, one of our most popular blog posts of 2022 delved into the topic, “What Is Shop Floor Control and How Does It Drive ROI.” This post and others discussed how to gain greater visibility, more automated order tracking and stronger social responsibility.

“Shop floor control systems typically evaluate materials status, machine use, labor and other resources to report on work in process. They also enable the accurate management of activities, resources and workflows inside the plant,” said the post on how SFC drives ROI.

Leadership, Business Goals and Process Change

Whether your 2022 focus was on your supply chain or other priorities, our blog content returned time and again to two core truths:

1. Change is led from the top.
2. Success is achieving business goals, not technology for the sake of technology.

E-commerce and Omnichannel: In our 2022 e-guide, “How to Do Business with Amazon,” Jason Roth, CGS vice president, solutions and strategy, said CGS begins by working with customers to understand their business goals with online marketplaces. Then CGS helps clients identify processes and technology to support those goals. “It’s really important to help customers find the best fit to achieve their goals,” Roth said. “We collaborate with customers on their business strategy before any technology comes into play. Where do they want their product to be? What do they want to gain? Market share? Sales growth? Greater profits? Faster fulfillment times? Streamlined processes? First, we have to know our client’s end goals and the business requirements. Then we can implement the best technology solution.”

Sustainability: Sustainability, visibility and transparency were in the crosshairs for consumers, retailers and brands this year. As a result, these issues also were a priority for their suppliers. A popular post, “Thinking Forward with PLM Technology,” discussed how product lifecycle management (PLM) supports sustainability and environmental, social and governance (ESG) goals. PLM’s data-collecting powers boost transparency by allowing companies to track exactly where supplies are coming from and where they are going. These results are amplified when PLM integrates with an end-to-end enterprise solution, from design to delivery. “The idea is that you can go to the field where the camels are running around and get the camel from which the hair came from that was then knitted into the fiber,” said the post’s author, Daniella Ambrogi, CGS global marketing director. “That's how you will build sustainability, by tracing back and collecting that data.”

In another post, Ambrogi discussed artificial intelligence’s (AI) growing role in sustainability initiatives to:

• Improve collaboration across languages
• Upgrade insights and catch problems early
• Enhance production processes from the beginning, the development stage, all the way to the end
• Synthesize and analyze thousands of images during the design ideation phase
• Predict customer preferences based on new insights and data from previous designs
• Identify mistakes or miscalculations by comparing current products to previous datasets
• Obtain manufacturing insights essential to meet ESG goals
• Develop more efficient production processes, including small-batch manufacturing, reducing time to market and waste
• Find ways to reuse products and materials.

“It’s not only the birth but the death of the garment and what we do at the end of life; how you bring it back and how you recycle back the raw materials,” said Ambrogi. “There is all this data that can be collected and can be leveraged down the road.”

Digital Transformation (DT): Making the transition to digital, automated processes was the Holy Grail for many businesses in 2022, continuing on a trend accelerated by 2020 pandemic upheaval. In a November blog, Fernando Moncayo, co-founder and managing director, Inspectorio, said technology adoption is not an option but a necessity. He likened digitizing supply chains to training for an IRONMAN® event. It doesn’t matter exactly how or where you start training, he said, but it is imperative that you start somewhere. Inspectorio provides technology for digitizing quality and compliance programs and is a CGS strategic partner.

By collecting, crunching and delivering the right information to keep decision-makers informed, integrated technology solutions expose signs of supply chain troubles — and opportunities — early, enabling businesses to respond quickly. Sharing data between stakeholders, including consumers, customers, suppliers and even governments, will be increasingly important. “If you don’t share data, you don’t get data,” Moncayo said.

In Case You Missed Out: It’s Not Too Late!

CGS presented interactive webinars, informative eGuides, white papers, reports and infographics in 2022. If you weren’t able to catch them the first time around, you might wish to peruse this content over your holiday or new year. It’s all available free and on-demand to access at your convenience.

• Infographic: Interest in Sustainability Surges for Consumer Products
• Webinar: Inspectorio and CGS Partner to Transform the Factory Floor
• Webinar: 4 Steps to Digitally Transform Your Factory Floor
• White Paper: How to Build Better Supplier Relationships While Boosting Efficiency
• eGuide: Doing Business with Amazon - Operational Tactics and Technology for Growing Your Business with Online Marketplaces
• Annual Report: 2022 Supply Chain Trends & Technology

From all of us at CGS, thank you for your business and interest in our blog content. We are committed to delivering perspectives and insights to give your company the competitive edge. We invite you to subscribe to BlueCherry’s blog now so that you won’t miss a single 2023 post and will have the latest content sent straight to your in-box.