Trends for 2023
The pandemic has continued to affect every part of the #supplychain in 2022 for Apparel and Footwear. As we close out the year and look forward to 2023, we’ve collected the insights from our Zefyr Consulting leadership team. We asked everyone for a key takeaway from 2022 and one key consideration for 2023.
We look forward to revisiting these trends in the coming months and supporting our clients and the industry in taking on these challenges and opportunities for innovation.
Bob Jones - Global Manufacturing and E2E Supply Chain Expert
Reflections on 2022:
Supply chain resiliency: Managing supply chain resiliency was the number one company focus in 2022 which should lead to future focus on how valuable supply chain is in creating value and profitability for companies. Planning and Inventory management was also a critical focus and investment as companies move forward to align market execution with inventory strategy and execution.
Outlook for 2023:
Workforce recruitment, engagement & culture: The need to keep employees connected and engaged is more important now than ever before. The future leaders of tomorrow are asking for a broader engagement model from their companies and support to manage their busy lives. This combined with a Global Workforce shortage will remain in 2023 and those companies that have a strategy to recruit, engage and build their culture to support their people will be able to have the best talent and ability for future growth.
Dave Kelley - Manufacturing, Materials, Logistics Expert
Reflections on 2022:
Different thinking for unprecedented times: “What got you here won’t get you there.” What we saw in 2022 was unprecedented - simultaneously, entire countries shut down, weeks-long backlogs at ports, trucking/container/rail shortages, and consumer demand through the roof with a glut of the wrong inventory at the wrong time.
We tend to rely on tribal wisdom and our value is in our experience with industry as it has run in the past. But times like these require different thinking and the exact opposite of relying on the past. The groups that survived well in our industry did so by innovating and staying ahead of the pack.
Outlook for 2023:
Risk mitigation: Risk mitigation will be the most important effort any single company can both execute for themselves and provide to their supply chain partners. Whether it is source diversification (including nearshoring where appropriate) or supply chain traceability or other forms of mitigation, I see continued investment in those areas that provide the old standards of quality, delivery, cost, sustainability and add in the considerable benefit of risk reduction.
Rajat Gupta - Manufacturing and Materials Operations in Asia
Reflections on 2022:
Factory diversification: The challenges faced by the industry in 2022 have pushed companies to reassess their supply chain strategies and consider new approaches such as diversification of the supply base, nearshoring, and vertical sourcing. As the reality of these challenges becomes more apparent, it is clear that the industry cannot continue operating in the same way, with long lead times and shipping materials from one country to another. Instead, companies must adapt to shorter and shorter lead times, in-country vertical solutions, and factories that can produce small volumes while maintaining high efficiency.
Outlook for 2023:
Re-evaluate geographical spread and value-added services: In 2023, with continued inflationary pressure and recession fears, brands will be cautious about expanding their supplier base. Suppliers must reevaluate their manufacturing geographical spread, strategize, and start planning for the future. The US-China trade tensions and rising costs in China are putting pressure on the industry to scale up materials and apparel/footwear manufacturing in other Asian countries, such as Indonesia, Vietnam, Bangladesh, and India. To stay competitive, suppliers must focus on providing value-add services to brands, rather than just focusing on production capacity. This can include design, product development, material innovation and automate processes. Production capacity will no longer be enough; manufacturers must start thinking beyond that.
Annette Herboth - Material Operations, Supply Chain, and Sustainability
Reflections on 2022:
Permacrisis: Collins dictionary word of the year: an extended period of instability and insecurity, especially one resulting from a series of catastrophic events. Reactions to this constant state of upheaval have been reflected in our clients' priorities for stability: focus on business & operational fundamentals, supply chain resiliency, sustainable product and material solutions, long-term growth strategies.
Outlook for 2023:
Supply Chain transparency and traceability: While the need for operational stability will be a top priority for 2023, there is a growing urgency to know your supply chain and be able to prove chain of custody. There is a lot of work happening in this space to create audit protocols, documentation tools, and data storage/integration systems. Raw material suppliers who are at the forefront of developing internal processes and tools to meet Brand expectations and governmental regulations will be seen as leaders with more market access.
Lee Myers - Brand and Product Development, Sourcing
Reflections on 2022:
The importance of relationships: With all the issues in supply chain in 2022 - lack of factory capacities, rising cost of materials, increased traffic at Ports, and greater demand for transparency of the provenance of production - building a close, trusting and collaborative relationship with your supply chain network allows you to overcome these obstacles and meet your deliverables.
Outlook for 2023:
The importance of transparency within the supply chain: Human rights, transparency and greenwashing are being addressed globally with the introduction of Acts and Laws. The Fashioning Accountability and Building Real Institutional Change (FABRIC) Act in the U.S., which looks to hold companies accountable for wages across the supply chain; the Uyghur Forced Labor Prevention Act and the E.U. directive on Corporate Sustainability Due Diligence which will speed up the green transition and protect human rights. Coupled with the consumer’s increasing demands to know and understand where product is produced; working conditions and how workers are treated; along with the provenance of materials, from farm to closet, brands, suppliers and retailers will be compelled to address their compliance. The ability to show and prove these things is growing in importance and is becoming a necessity for authenticity and trust.
Agree with these trends? Disagree? Need support? Let us know what you think!