Piers Wilson’s Post

The apparel industry is reimagining its value chain to address ongoing volatility and rising complexities. McKinsey's latest survey of apparel CPOs highlights the need for brands to enhance efficiency, resilience, and sustainability. Key themes include optimizing sourcing processes, rebalancing the global supply footprint, forging strategic supplier partnerships, and leveraging digital solutions. By focusing on these areas, brands can turn supply chain challenges into competitive advantages. #SupplyChain #ApparelIndustry #Sustainability #DigitalTransformation #Resilience #Efficiency #McKinseyInsights #FashionIndustry #StrategicPartnerships Read more: https://ow.ly/BEl550S6Cvh

The apparel industry is reimagining its value chain to address ongoing volatility and rising complexities. McKinsey's latest survey of apparel CPOs highlights the need for brands to enhance efficiency, resilience, and sustainability. Key themes include optimizing sourcing processes, rebalancing the global supply footprint, forging strategic supplier partnerships, and leveraging digital solutions. By focusing on these areas, brands can turn supply chain challenges into competitive advantages. #SupplyChain #ApparelIndustry #Sustainability #DigitalTransformation #Resilience #Efficiency #McKinseyInsights #FashionIndustry #StrategicPartnerships Read more: https://ow.ly/BEl550S6Cvh

From demand fluctuations to regulatory pressures, brands are being pushed to rethink their supplier strategies to boost resilience, efficiency, and sustainability. This recent survey of apparel chief procurement officers highlights five key themes that are reshaping the sourcing landscape: enhancing efficiency, rebalancing global supply footprints, restructuring strategic supplier relationships, striving towards sustainability goals, and leveraging digital solutions for better collaboration and decision-making. To thrive, brands must establish enduring relationships with suppliers and innovate beyond traditional practices. "Brands are rethinking their approach to manufacturers and suppliers, with an emphasis on long-term strategic partnerships to improve demand and production planning, resilience, and efficiency. Consolidating the supplier base is a natural part of this shift: 71 percent of brands consider it a medium to high priority for their strategy in the next five years. Our survey respondents also reported deeper relationships (including long-term volume commitments, shared strategic three- to five-year plans, and collaboration partnerships) represent 43 percent of apparel’s total supplier base, up from 26 percent in 2019 (Exhibit 4)." Now is the time to reimagine the apparel value chain for a more agile and resilient future. #SustainableSourcing #SupplyChainResilience #DigitalTransformation #ApparelIndustry #Accessories #StrategicPartnerships #gmpc https://lnkd.in/gAHnqciK

🚀 McKinsey's latest apparel CPO survey highlights five key themes shaping the industry's future! Brands that adopt these best practices can transform their supplier base into a powerful competitive advantage: 1️⃣ **Aiming for efficiency amid demand volatility**: With fluctuating consumer demands, efficiency is more critical than ever. Top brands are optimizing operations to stay agile and responsive. 2️⃣ **Rebalancing the footprint**: Companies are reevaluating their global manufacturing footprints, balancing cost, risk, and proximity to key markets for a more resilient supply chain. 3️⃣ **Restructuring strategic relationships with manufacturers and suppliers**: Strengthening partnerships and fostering closer collaborations with key suppliers ensures better alignment and mutual growth. 4️⃣ **Reaching sustainability ambitions and pressures**: Meeting sustainability goals is no longer optional. Leading brands are integrating eco-friendly practices and materials, responding to increasing environmental and regulatory pressures. 5️⃣ **Enabling efficiency and collaboration through digital solutions**: Digital tools and technologies are revolutionizing the supply chain, driving efficiency, transparency, and enhanced collaboration. By embracing these themes, brands can navigate the complexities of today's apparel market and secure a competitive edge. 🌟 #ApparelIndustry #SupplyChain #Sustainability #DigitalTransformation #Efficiency #McKinseyInsights

Compared with industries such as consumer packaged goods, where disruptions are usually felt within days or weeks, demand signals in apparel may not reach tier-two and -three suppliers for months. At the peak of consumer demand during pandemic lockdowns, suppliers struggled to add capacity fast enough. When consumer demand dropped over the past year, retailers and wholesalers found themselves with massive excess inventory, while suppliers faced order cancellations and struggled to deal with low utilization. McKinsey’s latest State of Fashion report suggests the industry could endure the peak impact of ongoing demand shifts this year. This delay heightens the risk of potential supply shortages and disruptions when demand rebounds. https://lnkd.in/ez-RSuD7

For the 7th time since 2011, we have conducted our comprehensive survey involving leading chief procurement officers (CPOs) from the fashion industry, assessed sourcing behaviors, and synthesized our own observations from organizations we work with, to distill the key themes shaping the fashion value chain.   In this year’s report, we identified five major themes shaping sourcing in the industry, including efficiency, supply chain resilience, sustainability, leveraging technology, and building closer supplier relationships. The report also lays out actionable strategies to improve sourcing operations towards cost reduction, sustainability, and digitization.   You can read the full report here: https://lnkd.in/g5kPC_kD

Headache for Apparel Brands: 30% Return Rate! Unexpected returns can cripple profitability, especially when returned items are damaged and can't be restocked. Here's where refurbishment comes in as a hero! Swiftly restoring returned clothes minimizes inventory gaps and keeps those sales flowing. ️ But it's not just about efficiency. Fast turnaround times for refurbishment also mean a better customer experience. Nobody wants to wait ages for their new favorite outfit! The bottom line? Integrating refurbishment into the supply chain is key for apparel brands to optimize stock turnover, minimize losses, and keep customers happy. ✅ What are your thoughts on the role of refurbishment in managing apparel returns? Have you seen any innovative approaches to this challenge? #fashion #retailefficiency #customerservice

One of the common concerns for apparel brands is the unexpected surge in return rates, which can sometimes reach as high as 30%. Upon receiving returns, the apparel items are often found in a crumpled or damaged state, rendering them unfit for restocking. Swift refurbishment becomes crucial for replenishing stock efficiently. Moreover as a consumer, how you receive your favorite clothing, forms a big part of the experience your brand is delivering. The faster the turnaround time, the higher the throughput, leading to reduced inventory holding costs. Failure to address this revenue leak can result in significant losses for brands. Therefore, having refurbishment capabilities integrated within the supply chain is essential for optimizing stock turnover and minimizing financial impact.

Our latest apparel CPO survey highlights five themes shaping the industry. Brands embracing selected best practices can turn their supplier base into a competitive advantage.

Why do apparel companies embrace supplier scorecards? The answer to that question is that brands want to make sure they demonstrate their sustainability approach and for suppliers it is simply just in order to get orders. However, when every brand creates their own supplier's scorecard this becomes a Lone Island. You get an army of people at the supplier end just filing data and collecting them for each customer without a clear idea of why and what to really do with it to improve their own sustainable approach as a win-win result. Supply Chain Dive raised a valid point about the supplier scorecard landscape - with each brand having their own development process, each organisation will present their data in a slightly different way, resulting in minor variations in action, response, and language. This leads to a muddled understanding of supplier trends, and takes a considerable amount of time, effort, and manpower to translate all of these findings into useful sector insights. There has to be a way to simplify the process. If the fashion & apparel industry could agree on key values and elements, creating some kind of standard scorecard mutually agreed upon by all related parties this would be a positive step in driving more transparency, modernity, and eco-friendly initiatives in the sector. Who would like to share their experience with this matter? What other small improvements do you think the industry can make? #Fashion #Apparel #SupplyChain #Operations #Transparency