Due to the seasonal nature of the fashion industry, many issues have emerged since the onset of the COVID-19 pandemic. Supply chain challenges stand at the core of it – from sourcing and manufacturing, to lacklustre delivery to its end consumers. Read on to find out why this is so, and how fashion businesses can spearhead a logistics transformation to scale ahead.
The global pandemic is not just a healthcare crisis, but also an economic and logistics one. While social distancing, vaccinations and shutdowns take centre stage on trending topics around the world, many companies are left to battle silently in the background. One of the most impacted industries is the fashion industry. According to Statista, between April and June 2020, production in Europe’s clothing sector fell a dramatic 37.4% and retail sales dropped even further.
Logistics risk factors in the fashion industry
At first glance, it might be easy to blame it on the COVID-19 outbreak, which the world is still reeling from. However, take a closer look and you’ll find weak links between important touch points within the fashion world. The Fashion Unleashed: The Agile Fashion Supply Chain report revealed major risks within the supply chain that could cripple the industry if not resolved. These included margin erosion, sudden demand change and physical product flow disruption. With COVID-19 driving negative economic outcomes, weakening retail demand and disrupting global logistics activities many years later, it comes as no surprise that these business risks are finally coming to fruition.
Knowing this, businesses of the post-coronavirus world can take measures to improve their logistics capabilities to overcome some of these issues.
1. Demand volatility
With fashion trends changing all the time, making a forecast is a broad stroke at best. For example, a fashion apparel company may stock during a viral fashion craze, only to have the trend die down at the end of the week leaving cartons of unsold inventory to deal with – perhaps selling at below cost price.
As we’ve seen, sudden government actions such as implementing lockdowns can eradicate demand overnight if a shop does not operate an e-commerce store and has to close.
The logistics solution to this problem is to reinforce your supply chain strategy with measures that can react to such extreme changes to consumer demand. Such measures include making e-commerce your main outreach channel and providing solutions to your customers’ pain points such as slow deliveries.
2. Production volatility
Production volatility is nothing new. Throughout history, manufacturers have been put out of work by unexpected events such as natural disasters. For fashion businesses who rely heavily on stocks actively coming in from producers, such issues can lead to an ineffective inventory turnover. What this means for them is unhappy customers who are used to expecting goods instantaneously in this digitally connected world.
For fashion retailers, it may be wise to have multiple suppliers of the same product or materials – such as fabrics – to outrun shortage problems. Choose the right logistics partner and have an express delivery option on hand to ensure that materials are delivered quickly and without further disruption.
3. Transportation challenges
The 2021 Suez Canal incident makes for a great case study on the impact of logistics problems in global supply chains. What started as a seemingly insignificant stall of a cargo ship turned into a global shipping jam which cost millions of dollars for businesses around the world. For the fast-moving fashion industry, a hiccup like this – or even a fraction of it – can result in a chain effect on inventory shortages or even missing out on a fashion trend altogether.
Instead of relying on one distribution network, it is important to work with various distribution and logistics experts to set up multiple delivery routes.
Building a sustainable fashion supply chain process
Whether you have opted to deliver a personalised experience to your customers, or prefer the mass production method, devising an optimised supply chain support network should be your priority. Fashion logistics may be subject to many uncontrollable factors, but there are plenty of solutions out there for the fashion industry to leverage upon to scale up.
Avoid falling out of fashion by ramping up your logistics efficiency with DHL Express today.
