BoF Insights | Building Resilience and Value in Fashion’s Supply Chain

The Covid-19 pandemic precipitated an enormous human and economic catastrophe, ushering in a period of disruption and volatility that shows no signs of abating. In just the last week, Russia’s invasion of Ukraine stunned and outraged the world. The pandemic and the recent conflict in Europe are the latest indications that an era of relative stability in the world order — and supply chains — is coming to an end.

For the fashion industry, the pandemic magnified fragilities and vulnerabilities in its supply chain given the industry’s labour intensity and the sprawl of its global operations. It exposed existing issues, including difficulties in safeguarding human rights, navigating geopolitical tensions and improving environmental standards. It also created new challenges, such as an unforeseen surge in consumer demand coupled with operational bottlenecks in key hubs and transit points.

Indeed, even before Russia’s invasion of Ukraine, senior fashion executives ranked supply and value chain pressures as the top theme that will shape the fashion industry in 2022.

Building Resiliency and Value in Fashion’s Supply Chain is the third in-depth report to be published by BoF Insights, a new data and analysis think tank from The Business of Fashion that arms business leaders with proprietary and data-driven research to navigate the fast-changing fashion industry.

In this report, BoF Insights identifies five secular shifts that have been affecting fashion’s supply chains:

• Accelerated growth of e-commerce
• Increased speed-to-market of ultra-fast fashion players
• Greater geopolitical tension
• Growing consumer and government demands to be more sustainable
• New advancements in technology

The report also surveys senior fashion executives to understand their leading concerns and priorities, revealing that:

• Executives are most worried about the upstream (planning, sourcing, manufacturing) components of their supply chain than the downstream (transport, distribution, returns)
• Inflation is a sustained concern: cost increases in raw material is the most commonly cited supply chain issue for 2022 and beyond 2022
• Trade disputes represent the single most concerning geopolitical risk, with 84 percent of respondents rating it as a 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 the capabilities of their suppliers

The report concludes with a brand and retailer playbook that is designed to help companies move away from attempting to solve the supply chain “trilemma” — balancing speed, reliability and cost when only two factors can be achieved at any one time. Instead, BoF Insights outlines a discrete set of value-creating initiatives that focus on improving visibility across, velocity in and the ultimate viability of fashion’s supply chains.

Why this report is a must-read:

• Offers an overview on how fashion’s supply chain needs to evolve in an increasingly volatile world
• Summarises underlying secular shifts that were already impacting fashion’s supply chain before the pandemic
• Details pandemic-specific challenges that have emerged with expert guidance as to how to navigate them
• Ranks the concerns and priorities of senior fashion executives with regard to their company’s supply chains
• Offers a strategic playbook with ten discrete value-generating initiatives for companies to evolve their supply chains into a source of competitive advantage and value

The report is based on proprietary research inputs, including:

30 interviews with founders, senior executives and academicians drawn from:

• Brands and retailers
• Manufacturers
• Freight forwarders
• Third-party logistics providers
• Technology start-ups
• Universities and research institutions

An exclusive BoF Decision-Maker Survey fielded by BoF across its global community of fashion professionals, representing a cross-section of senior decision-makers across a leading set of 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.

BoF Insights is The Business of Fashion’s data and advisory team, partnering with leading fashion and beauty clients to help them grow their brands and businesses. Get in touch at insights@businessoffashion.com to understand how BoF Insights support your company’s growth for the long term.