Posted by Paul Brownhill 18 Feb 2016
The garment industry moves at breakneck speed, but it might be time for manufacturers to start settling down. We’ve taken a closer look at one of the most important supply chain management trends - will fashion retailers begin to favour the smart needle over the cheap needle?
Global sourcing in the future
Fashion buyers have traditionally travelled from country to country in constant pursuit of the next big production location based upon costs.
There has recently been strong growth predicted for the garment industry in Cambodia, Vietnam and Myanmar, as these South East Asian countries offer cheap and plentiful labour. Attempts to reduce lead times in the US garment industry are also fuelling business for Central American countries such as Guatemala. In addition, Africa has potential as an upcoming production hub, thanks to high urban unemployment rates, cheap energy and locally produced cotton.
However, it’s becoming increasingly hard to keep a lid on costs, and cheap production hubs aren't always a good solution.
The fashion supply chain under pressure
Increasingly, Western retailers are being held accountable for human rights abuses found in their supply chains - both by Western courts, the general public and the media.
The Modern Slavery Act has recently been passed by the UK government, and will require large businesses to disclose what actions have been taken to eradicate conditions of slavery from their supply chains. With this kind of pressure, retailers may become more interested in complying with the law, and less interested in finding the cheapest global sourcing hub.
Matthijs Crietee, secretary general at the International Apparel Federation (IAF), explained to Just Style that "the 'travelling circus' sourcing model" is unable to deal with the high demands of today’s garment industry.
"The 'pursuit of the cheap needle' is gradually being replaced by the search for the 'smarter needle'", explained Paul Forman, group chief executive at Coats Plc. Rather than moving from location to location, some retailers are looking to gain more visibility and control over existing supply chain processes. Once this is accomplished, they are able to streamline operations and improve market performance.
How to make your supply chain smarter
The pursuit of 'the smarter needle' relies upon a level of visibility to help supply chain processes to become more efficient. It's often possible to improve the productivity, sustainability and capabilities of a fashion supply chain once this transparency is achieved.
Britannia operates transparently, and we can always answer the customer’s question of "where are my garment labels?". We also operate across 11 strategic locations, so that wherever in the world your production hub is based, we can provide a practical service.
Editor's note: Originally published 2nd June 2015