Building Resilience and Value in the Fashion Supply Chain — BoF Insights
The Covid-19 pandemic has precipitated a huge human and economic catastrophe, ushering in a period of disruption and volatility that shows no signs of abating. Just last week, Russia’s invasion of Ukraine stunned and outraged the world. The pandemic and recent conflict in Europe are the latest signs that an era of relative stability in the global order – and in supply chains – is coming to an end.
For the fashion industry, the pandemic has amplified the fragilities and vulnerabilities in its supply chain given the industry’s labor-intensive nature and the sprawl of its global operations. He exposed existing problems, including difficulties in protecting human rights, managing geopolitical tensions and improving environmental standards. It has also created new challenges, such as an unexpected increase in consumer demand coupled with operational bottlenecks at major hubs and transit points.
Indeed, even before Russia’s invasion of Ukraine, top fashion executives saw supply and value chain pressures as the main theme that will shape the fashion industry in 2022.
Building resilience and value in the fashion supply chain is the third in-depth report published by BoF Insights, a new data and analytics think tank for The business of fashion which arms business leaders with exclusive, data-driven research to navigate the rapidly changing fashion industry.
In this report, BoF Insights identifies five secular changes that have affected fashion supply chains:
- Accelerated e-commerce growth
- Faster time-to-market for high-speed fashion players
- Heightened geopolitical tension
- Consumers and governments are increasingly demanding to be more sustainable
- New technological advances
The report also interviews fashion executives to understand their top concerns and priorities, revealing that:
- Leaders are more concerned with the upstream (planning, sourcing, manufacturing) components of their supply chain than the downstream (transportation, distribution, returns)
- Inflation is an ongoing concern: Rising raw material costs are the most commonly cited supply chain issue for 2022 and beyond
- Trade disputes are the most concerning geopolitical risk, with 84% of respondents rating it as high or medium risk
- Looking ahead, strengthening supplier relationships is the top priority, with many executives also indicating that their companies are investing financially to improve their supplier capabilities.
The report concludes with a brand and retailer playbook designed to help companies move away from trying to solve the supply chain “trilemma” – balancing speed, reliability and cost when only two factors can be achieved at once. Instead, BoF Insights outlines a discrete set of value-creating initiatives that focus on improving the visibility, speed and ultimate viability of fashion supply chains.
Why this report is essential:
- Offers insight into how the fashion supply chain must evolve in an increasingly volatile world
- Summarizes the underlying secular changes that were already impacting the fashion supply chain before the pandemic
- Details pandemic-specific challenges that have emerged with expert advice on how to overcome them
- Prioritizes senior fashion executives’ concerns and priorities as they relate to their company’s supply chains
- Offers a strategy playbook with ten discrete value-creating initiatives for companies to evolve their supply chains into a source of competitive advantage and value
The report is based on proprietary research contributions, including:
30 interviews with founders, senior executives and academics from:
- Brands and retailers
- freight forwarders
- Third party logistics providers
- Technology start-ups
- Universities and research institutes
An exclusive BoF survey of decision makers conducted by BoF within its global community of fashion professionals, representing a cross-section of high-level decision makers across a range of leading fashion brands and retailers.
Companies covered and/or interviewed in the report include American Eagle Outfitters, ASKET, ASOS, DXM Inc., Flexport, Katla, Kavida.ai, Li & Fung, Linc, MANGO, Neiman Marcus, Nordstrom, Ohi, On, PANGAIA, Panjiva, Quiet Logistics, Reformation, Saint Art, Shahi Exports, SHEIN, SILQ, SXD, Syrup Tech, TextileGenesis, TrusTrace and Zalando.
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