The textile supply chain is complex and global, with multiple players involved at every step. From sourcing the raw materials to manufacturing and distribution, the process can span continents. This complexity often results in information silos, where top brand executives lack critical information, making it difficult to react quickly to disruptions. The pandemic further highlighted the importance of supply chain visibility, as even minor disruptions had far-reaching consequences. By recognizing the importance of visibility at every stage of their supply chain, apparel brands can increase their agility, resilience, and avoid major ESG violations, thanks to the increased knowledge and control that such visibility affords them.
Brands that have a clear picture of their supply chains are more agile and gain a competitive edge because of this. A good example is the global apparel brand H&M, which has invested heavily in its supply chain management system. This system allows H&M to track their productions from the raw materials stage to final distribution. It also allows the company to quickly identify and respond to disruptions, such as delays in production or shipping. With increased visibility, H&M can make more informed decisions about inventory management, product development, and logistics. Nike, the sportswear giant, also understands the importance of their supply chain. During the pandemic, Nike was able to better control their inventory placements, and pivot quicker to meet online demand when physical stores were closed because of their investment in RFID technology. By implementing RFID, Nike was able to get an accurate count of their stock items globally, and as a result performed much better than their competitors during the lockdowns.
Increased visibility into the supply chain can also prevent ESG violations. Apparel brands are under increasing pressure from consumers and governments alike to ensure that their products are ethically sourced and manufactured. The European Union has recently implemented new ESG laws, which require apparel brands to disclose information about their supply chains, including the names of their suppliers and information about working conditions and environmental impact. Brands that do not comply with these laws can face significant penalties. By having full visibility into their operations, apparel brands can start to ensure that their products are ethically sourced and manufactured, and avoid costly ESG violations.
Adopting technology can address the challenge of limited visibility and help executives build resilient and agile supply chains. Through strategic implementation, brands can monitor their global suppliers closely, maintain constant communication, set up safeguards and approvals, and receive timely updates on all activities. This approach provides a clearer understanding of the supply chain’s operations than previously possible, and allows brands to easily manage global suppliers remotely. A wide range of solutions are available on the market to increase transparency such as production tracking softwares like TrackIT to digital quality management and inspection tools like QUONDA .
In conclusion, supply chain visibility is critical for apparel brands that want to remain competitive and avoid ESG violations. The pandemic has shown that disruptions can occur at any point in the textile supply chain, making it essential for brands to have full visibility over the manufacturing process. Apparel brands that have invested in supply chain management systems, like H&M and Nike, have been able to quickly respond to disruptions and gain a competitive edge. As ESG regulations become increasingly stringent, brands that have a transparent supply chain will be better positioned to comply with these regulations and avoid costly violations that hurt the brand financially and in the minds of their consumers. Technology solutions can help to solve the problem and help apparel brands gain a new level of transparency that they need to succeed in today’s global marketplace.