It has now been more than 9 months since Covid-19 hit the US. It’s affected a wide range of things from the way we live to the way we do business. Nearly every industry has been impacted, and the fashion industry is no exception. 2020 is the year that has changed everything, and the fashion industry suffered its worst year on record. A report by McKinsey & Company and the publication Business of Fashion describes the Coronavirus pandemic as something that “has disrupted financial markets, upended supply chains, and crushed consumer demand across the global economy.”
COVID-19’s impact on fashion industry operations
The Coronavirus pandemic has brought to light how outdated fashion supply chains have become. Sourcing Journal referenced an article outlining the need for more resilient supply chains that states, “Unfortunately, many [companies] are facing a supply crisis that stems from weaknesses in their sourcing strategies that could have been corrected years ago”. This year, Asian apparel manufacturers lost billions of dollars’ worth of orders in cancellations by fashion retailers trying to curb their losses. Manufacturers around the world were hit with cancelled orders and retailers unable to pay their debts.
According to McKinsey Global Fashion Index analysis, fashion companies will sustain a 90 percent decline in economic profit in 2020, after a 4 percent rise in 2019. The BofF estimates that global fashion sales will decline by between 0 and 5 percent in 2021 compared to 2019. While this does not seem like good news, it is a hit the fashion industry can recover from.
With these massive losses in sales and wasted product being sent to landfills (at rates higher than ever), the fashion industry is feeling the pressure to implement more sustainable practices. Manny Chirico, Chairman and CEO of PVH Corp. stated, “The COVID-19 pandemic has severely affected every aspect of the apparel value chain. While our immediate focus is navigating the crisis and its human and business impacts, we must actively look for ways to capture opportunities that can accelerate our efforts to create a more sustainable future”.
Over the past year, consumer behavior has changed dramatically. People began working from home, sheltering from the virus, and their needs (and therefore spending habits) changed. Not only did their buying habits change, but also how they shopped. Digital consumption has continued its dominance and growth as brick and mortar stores continue to shutter. A company’s online presence has become key to surviving the effects of this pandemic, and companies must develop more engaging and social experiences to encourage consumers to connect with speed and sustainably in mind. As the Business of Fashion states, “the pandemic will accelerate trends that were in motion prior to the crisis, as shopping shifts to digital and consumers continue to champion fairness and social justice.” According to Cotton Incorporated’s 2020 Spring U.S. Coronavirus Response Survey, the majority of consumers (65 percent) have become more concerned about sustainability and environmental issues since the COVID-19 pandemic began.
So how can companies strengthen their supply chains while prioritizing sustainability and profit simultaneously?
How Exenta software can modernize your supply chain for a digitally focused year
Software technology implemented throughout the supply chain provides the perfect blend of technology and human labor by increasing productivity, decreasing waste, and therefore increasing profits.
Information gathered and recorded manually does not provide manufacturers with insights needed to make adjustments mid-shift or mid-production order. Shop Floor Control MES software tracks the progress of production throughout sewing operation, giving supervisors, managers and workers real-time information and notifications regarding WIP, including many aspects of workforce management such as employee productivity, labor costs, and pay rates. When Shop Floor Control MES is used, employees can scan barcodes on pieces or garments rather than writing everything down in a notebook or using gum sheets. This results in an immediate efficiency improvement, along with enhanced decision-making capabilities. Shop Floor Control MES enables sewing operations to experience productivity gains from 11% to more than 40%. Extra productivity translates easily into higher profitability. In a large corporation producing 100 million pieces per year, even the minimum 11% productivity gain would result in 11 million extra sewn products to sell each year—without any additional labor required. This increase in efficiency directly correlates to a decrease in material waste and environmental impact. A more efficient shopfloor results in reduced waste during the manufacturing and production process.
In today’s primarily digital marketplace, fashion brands need to be able to evolve with consumer demands. Exenta offers the only complete supply chain management (SCM) technology suite designed for the apparel and soft goods industry. Real-time visibility across your supply chain helps you continuously optimize operational decisions while balancing competing demands for cost, speed, and quality.
Technology is key to driving the visibility, speed and accuracy required to adapt to evolving customer demands and a changing competitive landscape. Better supply chain management helps get products to customers faster which boost profitability. Vendors taking advantage of a cohesive end-to-end Supply Chain Management technology platform will be able to bring a higher quality product to market faster than ever before, with less waste and fewer returns.
See how Exenta’s cutting edge technology can streamline your supply chain and prepare your company for 2021. For more information, request a demo here.