What is a Supply Chain?

Understanding the fashion supply chain is a necessary component to your business strategy

Key Takeaways

  1. An adept supply chain is integral to a brand’s success as it provides the modes of production and distribution.
  2. Brands must weigh their production lead times against their cost-benefits when determining supply chain location and technology.
  3. A transparent supply chain is vital in today’s climate as more customers gravitate towards socially responsible and ethical brands.

In recent years, the term “supply chain” has entered mainstream consciousness. No longer only discussed by fashion insiders, today a brand’s supply chain is crucial to its identity. A supply chain encompasses the entire lifecycle of a garment from its humble beginnings as raw material to the hands it must pass through at factories before it reaches buyers. The ever increasing consumer demand for clothing coupled with a trend towards social justice has led to a public reckoning in how articles are produced. Understanding all of the intricacies of the supply chain operation can help brand creators make financially sound decisions for their business while striving for transparency for their customer base. Supply chains are arguably the backbone of a brand since how its materials are sourced, cut, and delivered to consumers ultimately establishes its value and reputation in the market. There’s no question that a supply chain is necessary for any reputable brand no matter its scope or size.

 

All manufactured products are at the mercy of their supply chains. The supply chain establishes a product’s speed to market, quality control, and overall customer satisfaction. Once a clothier establishes their design the cloth is spun and cut out by garment workers. The cut fabric is then sent to the next set of factory workers that sew the garments and add any other details. The finished goods undergo a quality inspection and are then shipped to warehouses and finally retailers along the distribution channel. Depending on the size of a brand a supply chain can involve multiple individuals and project managers that oversee every facet of the production process or it can be done by a significantly smaller team on a local level. 

 

The speed and efficiency with which a brand can deliver its vision to consumers can impact its viability in a cutthroat marketplace. While brands need to keep timelines for products in mind, production costs are also a deciding factor in how the supply chain is organized. Twenty years ago, brands relied on domestic manufacturing to produce their wares, but now the supply chain has primarily moved abroad to appeal to a more price-conscious consumer, according to Raconteur. By moving textile growth and unskilled labor to the developing world brands are able to keep their labor costs down. However, reducing shipping lead times is typically expensive. Fast fashion powerhouses such as Inditex’s Zara have been heralded for their back end innovations which speed up the entire process while keeping their costs down. By setting up factories closer to distribution centers, Zara can bring its product to the sales floor in under a month. This allows Zara to retain a competitive edge over other similarly priced brands that target the same demographic. Like Zara, Uniqlo has also upended the traditional fashion supply chain by relying on automation to determine faster shipping routes and reduce its lead time to just 13 days, according to Reuters.

 

While fast fashion is not thought of as sustainable, Inditex’s adherence to a short supply chain means it has far less profligate spending than traditional fashion companies. Shorter supply chains do not rely on as much trend forecasting and thus do not produce as much excessive product. In addition, conventional fashion brands have other glaring disparities in their supply network. Recently TAL Apparel, known for its factories that produce clothing for men’s brands such as Brooks Brothers and LL Bean has come under fire for the exploitation of migrant workers in its Malayasian factories, according to the New York Times. These laborers pay upwards of $2000 in their home countries to secure positions at factories abroad, whereby they must then work off these incredibly high loans. New brand creators must navigate a dizzying chain of operations to figure out what makes sense for their company while finding a balance between a supply chain that can output products promptly without sacrificing the safety of its workers. The more involved a young brand is with its supply chain, the more control it has over its finished product and the socioeconomic impact left behind.

 

Transparency in a brand’s supply chain can be advantageous to its public image. By working with factories that treat their laborers well a brand can keep its integrity intact. The entire process must adhere to the guidelines set forth by Transparentem, a nonprofit that “illuminates supply chains and spurs the eradication of human and environmental abuses.” Transparentem researches and discovers exploitation within the global supply chain which it then discloses to retailers and importers so that they may make appropriate changes during a grace period. Independent brands should align themselves with factories that adhere to these policies, as today’s customer is increasingly invested in a garment’s history. Buyers are committed to companies that have an unhindered company culture such as the retailer Everlane which attempts to educate customers on its supply chain and the price breakdown/markup on its apparel.

 

The fashion industry’s supply chain is fraught with power imbalances and notorious for its wastefulness, but many brands are revolutionizing their methods of production. As the COVID-19 pandemic puts further duress on this system, it’s become clear that the lack of communication and the standard turnaround time for products has proven to be disastrous. Given the temperamental changes in consumer demand amidst the economic crisis the world now faces, seasonal garments that were once predicted to fly off of shelves have been slow to sell. Many corporations have gone into bankruptcy and shoppers’ tastes have shifted. A brand’s supply chain is only as successful as its ability to output products its consumers want. Yet by understanding the nuances of this system, brand creators have the opportunity to make pivotal decisions on how they produce inventory. Recognizing the benefits of using local labor rather than outsourcing to speed up the time between inception and actualization of a product is one possibility, despite higher production costs. Brands that embrace technological advances such as a.i. to speed up end to end distribution will undoubtedly benefit from the lack of human error moving forward. A steadfast commitment to ethical and sustainable business practices for all workers involved, will encourage brand loyalty amongst savvy consumers and help businesses find longevity in a fickle marketplace.