Importance of Supply Chain Digitization and Transparency

Supply chain digitization

One of the biggest industries in the world, fashion supports millions of jobs through a global supply network. It is a complicated system that affects individuals all over the world. Customers are expecting more transparency from the companies they buy from as they become more environmentally conscious. In expressing and upholding these principles, supply chain management (SCM) is crucial.

The clothing supply chain is a vast, dynamic structure with thousands of stakeholders. Managing these stakeholders and ensuring quality and efficiency at all manufacturing stages can be a challenging task.

The demand from consumers, rising expenses, and a shift away from local resources have all contributed to the fashion industry's shift toward more complex processes. For fashion businesses to minimize waste while maintaining happy customers, many factors must be taken into account.

The good news is that technology and design can collaborate to meet consumer demand. 

Fashion companies can frequently update their procedures while ensuring the efficiency, safety, and transparency of their supply chains thanks to technological supply chain solutions. This is a significant trend, as 50% of major international corporations plan to use AI, advanced analytics, and the Internet of Things (IoT) in their supply chain processes.

The clothing business Patagonia is a well-known innovator. Its Footprint Chronicles drill down into specifics regarding the operations and personnel of vendors and map a subset of the raw materials, mills, and factories that produce Patagonia goods.

One of us, Leonardo, founded and is the CEO of Sourcemap, a business that works with VF Corporation and some of its brands to disclose supply chain information all the way down to raw material suppliers.

Additionally, food businesses are becoming cutting-edge innovators. For instance, the seafood products from Red's Best are fully traceable to the fishing vessel through QR codes on the company's packaging, and the cereal products from One Degree Organic Foods are fully traceable from field to spoon. 

Early adopters like Nike map their factories and give insights into specific ones, and the UK retail giant Marks & Spencer offers an interactive map of its clothing and food manufacturers.

Supply Chain Transparency:

The benefits of increased supply chain transparency vary depending on the business model and industry, but most businesses can profit from them. Compliance with more onerous regulations is perhaps the most obvious advantage. 

Transparent supply chains also lower reputational risk for the company and improve its image as a reliable business. Bringing in and keeping workers who are eager to work for ethical businesses is a third advantage. Due in part to their reputations as ethical businesses, Patagonia and Nike receive extremely high application rates and very low employee attrition.

Additionally, there are significant organizational advantages. Companies can find areas for improvement, such as unnecessary middlemen, and enhance long-term planning by collecting more detailed data on supply chain performance.

The development of a mindset of continuous improvement both within the company and across value chains is necessary for supply chain transparency. It's unlikely that the desire for transparency will decrease. It might not currently be part of anyone's job description, but it shortly will.

Supply Chain Digitization:

In today's fiercely competitive retail environment, digitization is a competitive advantage, particularly since 65% of quality control leaders still heavily depend on antiquated tools like spreadsheets and emails to manage their QC functions. 

Eliminating paper and pencil speeds up decision-making increases visibility, fosters productive collaboration, and equips companies to react more quickly to unforeseen disruptions, changes in customer behavior, or significant global events. 

Businesses are digitizing their supply chain processes in a variety of methods, as follows:
  • Utilizing mobile applications, quality managers can instantly exchange measurements, defects, and images from inspections for real-time monitoring.
  • RFID systems record and automatically transmit production data, such as information about quality, line efficiency, and factory downtime
  • AI-powered models that predict retail sales in a region or during a particular season, then modify production and inventory as necessary 
  • In order to instantly prescribe corrective actions, advanced data analytics are used to spot supply chain trends and alert factors like underperforming suppliers or recurrent quality problems. 

Today's apparel supply networks are still largely fragmented, depending on antiquated technology and manual procedures on a daily basis. But the technology train is rapidly reshaping global supply chains, and brands that can get on board will benefit in a variety of ways while those who can't run the risk of falling behind. 

These technological developments will aid businesses in tearing down the siloes that are hindering their internal operations and keeping customers in the dark about the manufacturing processes used in the goods they purchase. 

Brands need dependable supply chain partners who are aware of how technology can revolutionize the apparel industry if they are to accomplish this successfully.

Related Article: Solutions to the Top 4 Biggest Fashion Supply Chain Problems

  • The benefits and challenges of digitalization in supply chain management - International Journal of Production Research.
  • Digitalizing the supply chain - McKinsey & Company,
  • Supply chain digitalization: Disruptive technologies, key use cases, and strategic insights - Deloitte,
  • Why digitalization is the key to supply chain success - Supply Chain Digital,
  • Digitalization in the supply chain - SAP

About the Author: Sweta Singh is currently pursuing Masters in Fashion Technology from NIFT, New Delhi, with an experience of 7 months in SGS India Pvt. Ltd. as Asst. Quality Coordinator. She has done her B. Tech in Apparel Production and Management from the Government College of Engineering and Textile Technology, Serampore.

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