Digitalisation Will Be Essential in Getting Sustainable Supply Chains Back on Track After COVID-19. Here’s Why.

02/09/2020 | by Flora Davidson

Flora Davidson co-founded SupplyCompass as a sustainable production software for the fashion industry. In the wake of Covid-19, she explains how a lack of proper technology brought many manufacturers and suppliers to a standstill during the pandemic, and why a shift to digitalisation is needed now more than ever within the fashion supply chain.

At the start of this year, things seemed brighter than ever in the fashion industry. Sustainability was top of the agenda for many businesses, and it seemed like 2020 was going to be the year for meaningful change. Then, COVID-19 hit.

The outbreak has had devastating effects on the fashion industry and has been even harsher on manufacturers and suppliers around the world. Within a very short period, everything came to a screeching halt. Unlike the fast-global transition of working from home that we witnessed for many office-based businesses, factories didn’t have this this luxury. In factories, it’s people, making physical products, with machines, all reliant upon a well-functioning logistics network.

For the most part, lockdown has meant that no work could be done, beyond sending emails. No costings, no sampling, no production. For most of Supply Compass’ factories, their work was literally locked-down in the office within the factory, on a desktop or printed in a file they couldn’t access. Many factories have not invested yet in cloud-based software, simply because they haven’t needed to.

The Supply Compass team spoke to all our core partners almost daily in the initial months of the outbreak, as things were changing by the hour. As brands cancelled completed orders that were packed and ready to be picked up to ship to their warehouses, no one was able to predict when consumer confidence would return, let alone what brands would be designing and how much they’d be ordering. We heard anecdotal stories of what was happening and listened to our factories’ fears and concerns. The resounding feeling was one of uncertainty of the unknown. How long would it last? What would it look like when ‘normal’ returned? Would ‘normal’ return?

There was a fear over which businesses they’d lose and who would stick by them – with good long-standing relationships proving a fall back for manufacturers and suppliers in the height of the pandemic. “Our biggest customer has been with us for over 20 years and we have employees who have been with us for over 30 years,” explains Aditya, Head of Business Development at a SupplyCompass partner factory in India. “Long-term partnerships like these aren’t talked about enough in the typical sustainability realm but will be key in surviving through these tough times.”

Many owners also continued to pay their workforce in full during this period – with no production, no sales, and no orders. “We have provided salaries in full for this month, despite having zero production and zero sales for 15 days,” Aditya continued. “We have over 700 people on our rolls and every single one of them has been paid. That being said, we have already told our staff and workers that we don’t know how long we can sustain paying.”

Yet in a similar way to how business recommenced in the UK towards the end of June, factories across India cautiously reopened with scaled back operations depending on the region and the local COVID-19 rates. Since reopening, most factories have seen a drop in order volumes, as brands proceeded cautiously, with smaller orders for fear of being unable to sell – e-comm-first and direct-to-consumer brands selling casual basics, loungewear, athleisure, and homeware were among some of the exceptions. The good news is that sustainability still seems near the top of the agenda, with a surge in demand for organic cotton, hemp, recycled polyester, leather alternatives among our partner factories. But the question remains as to how this can translate into ‘sustainability’ in terms of brands’ relationships to their manufacturers and suppliers as well?

With reduced orders from existing clients, most of the factories we spoke to knew that when (or if) they reopened, one of the greatest challenges would be securing new business. Traditional methods of finding clients involves teams flying around the world to visit brands or pay to be part of trade shows. This has been the case for decades. Very few factories have good websites or have invested in marketing, because the reality is the good ones haven’t really needed to. Yet the need to connect through digital marketplaces or ecosystems is now greater than ever, and the reality is we may never fly around the world to the extent we used to.

Many manufacturers also needed to find new suppliers in the wake of old ones failing to reopen in time or having since closed their doors for good. The pandemic really exposed the true complexity and global nature of fashion supply chains. Even if a product was made ‘locally’, the trims or yarn may be sourced from the other side of the world. With lockdown being so unpredictable – coupled with the opacity of many supply chains – no one knew where the next delay was coming from. As factories reopen and assess their own supply networks, the next 12 months will likely see new relationships sought out across the value chain.

With new relationships to build on both the supplier and brand level, factories can no longer risk being disconnected and offline in the event of a new lockdown. This pandemic has really highlighted a shift to digital technology that is critically needed with fashion supply chains, not just inside factories but within fashion brands too.

“An event like this is unprecedented and there’s very little we could have done to be prepared for it,” explains Aditya. “In terms of adapting, both our supply and demand have been blocked. Factories are shut, and so are our customers, and there is very little work that can be done by us remotely. In terms of how I wish we could have adapted, it would be more digitisation.”

Like the rest of the world, video calls have taken centre stage between brands and factories – an innovation that I hope will be here to stay. With our brands and factories, we now conduct video calls as part of the process at key points in sampling and production. If you can give feedback on a product whilst it’s still in the factory, you can shave weeks of time off back and forth with couriers and reduce the amount of rejected samples. It will be interesting to see how video conferencing software will play a more important role in brand and factory relations, particularly the sampling and approvals process.

A majority of fashion supply chains have, until now, relied on outdated systems and processes. It seems likely that we will see an acceleration in the adoption of cloud-based software that aid cross team and supply chain collaboration, control, visibility, and easier ways of managing and sharing product and material data such as through digital or 3D rendered libraries. We are noticing new models of selling, such as ‘pre-order’ and 3D sampling, and have seen an appetite from factories to experiment with new, more agile ways of working.

These businesses who try to return to ‘business as normal’ may get left behind. Now there is an opportunity to reinvent, to experiment with new tools and build new connections. Because there is no more ‘normal’, the future is ours for the shaping.