The 38th IAF World Fashion Convention theme is, as always, extremely topical. For those out of the loop, this year is all about building smarter, stronger, and more sustainable supply chains.

While nobody really wants to discuss COVID-19 anymore, the reality is that businesses are still reeling from the impact of the pandemic, and the world of fashion is no different in that regard. The on-and-off lockdowns birthed countless disruptions that drastically impacted a myriad of factors, including increased transportation bottlenecks, long lead times and sky-high shipping costs.

The easiest example to draw upon is the blocking of the Suez Canal, which, crucially, shone a light on just how vulnerable supply chains are. While the aftermath of such events is starting to subside, other factors are still greatly weighing on the minds of business executives (i.e., rising energy costs, inflation, geopolitical tensions). In a 2021 report, McKinsey cited supply chain turmoil as an economic threat to rival the pandemic, labour shortages, geopolitical instability, and conflict.

A few years on and the chaos of recent years has illuminated the weaknesses in processes. Little wonder then that supply chain disruption is deemed to have an enormous effect on companies and their countries’ economies. As senior leaders continue to navigate such challenges, one thing is more apparent than ever: we need to build resilient supply chains that can withstand future crises. But where do we begin?

The answer to that question is difficult to distil into a short article, but broadly speaking, brands must take a step back and look critically at their operations. While some have explored nearshoring and offshoring over the last few years and found relative success in doing so, others have found it problematic. The reason for this is that no two supply chains are the same, and therefore, brands must choose an approach that best fits their business.

So, as simple as it may sound, the key is for brands to identify which areas of their supply chain are most susceptible to disruption and choose a solution to mitigate any potential impact. To help illustrate this, K3’s fashion expert Rik Veltman has shared some tips that brands could consider below:

“There are several steps brands can take to regain control over their processes. For one, businesses can allocate their products to different vendors, allowing developers to find nearshore and remote sources. In doing so, developers would be enabled to identify products that can be made nearby and those that are too expensive or complex for nearshoring. The goods could also be developed at multiple factories in different geographies to increase flexibility further.

“Brands could also seek greater control over their critical raw materials and transactions without necessarily owning the materials themselves to boost agility. While many brands today do not have this level of control, regaining it would bolster their agility and allow them to more easily change factories while materials are being produced.

“To mitigate the impact of delayed deliveries, brands could start splitting their large orders of items between multiple suppliers in various geographies or utilise efficient warehouse allocation rules to ensure critical customers and retail stores receive an initial partial delivery against their orders while awaiting the remainder. In addition, businesses could combine multiple production sources to help distribute purchase orders more efficiently and start fulfilling sales orders on the promised dates. Short shipments would also be far less painful to manage as a secondary benefit to this.

“On the costing side, brands could consider ‘what-if’ scenarios while taking into account split order quantities over multiple sources to help determine the right purchase and sales prices. Furthermore, open cost calculations are an ideal method for understanding the cost down to the raw materials levels, which will help inform brands’ overall costs and pricing.

“Finally, businesses could consider their pre-allocation calculations in tandem with logistics scenarios – before shipments take place – to help understand what percentage of the purchase orders should be shipped and in what manner. This will drastically assist with fulfilling wholesale and retail demand based on criticality and profitability.”

The above steps provide practical ways for businesses to improve flexibility and resiliency within their supply chains but by no means will each one work for every business. As always, companies must look critically at their operations and determine which approach best suits their particular operations.

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