COVID-19 has taken the world, and more specifically the fashion industry, by storm. Brands and design houses have been forced to shutter doors and postpone shows, major events such as the MetGala and CFDA Awards have been postponed indefinitely, and retail shops around the globe have had to close their storefronts under mandated order.
But no other aspect of the fashion industry has seen the same level of impact as the supply chain. Fashion brands experienced delays as Chinese manufacturers quarantined at home during the height of the pandemic in their country. Garment workers in Bangladesh lost $3 Billion worth of orders from cancellations or postponements after the closures in their country. Companies are scrambling to find a way to minimize their losses, but these losses may be inevitable as supply chains have grown more complicated than in 2002, at the height of the SARS pandemic.
Digital supply chains offer a way for fashion businesses to navigate the more complex ecosystems of today’s multinational supply chains and help them mitigate future damages caused by shocks to that ecosystem.
Creating more transparency
Digital supply chains help fashion houses understand the full impact of something like the coronavirus by creating a digital platform where brands can connect to sourcing, production, and logistics all through a single, connected enterprise. This enables them to see the full scope of problems and do the crisis management needed when all of these systems connect.
This transparency goes beyond helping the industry better prepare for crisis though. The collaboration made possible by a digital supply chain helps fashion brands stay more organized, and increases their productivity. This is especially helpful during a pandemic, when they need to manage their workflow and keep track of what factories are shut down and when they will reopen. Third party platforms that work with a digital supply chain can do all of this logistical work for them, so that they don’t need to suffer losses when trying to keep up with the demands of their workflow.
Managing a diverse supply chain
Right now, fashion labels without a diversified supply chain are being hit the hardest by COVID-19. When managing their own supply chain, these businesses have often worked directly with one or a few manufacturers, but when those manufacturers experience unforeseen disruptions, these labels may scramble trying to find and vet new factories to manufacture their products. Finding manufacturers is hard enough, but oftentimes a relationship will need to be established with these manufacturers beforehand, which could make it impossible for the brand to produce new items for a temporary amount of time, and lead to temporary closures. Not to mention, working with new manufacturers for the first could be a gamble as there’s no way of knowing what sort of quality to expect from their shops.
When working with a digital platform that manages their supply chain for them, fashion brands and designers don’t need to worry as much about establishing these relationships on their own, and focusing too much on the specific manufacturers. There will be a diverse network of manufacturers they have access to instead.