Feedback Here

fbook  tweeter  linkin YouTube
Global contents also translated in Chinese

McKinsey report finds apparel industry needs to revamp sourcing strategies

McKinsey report finds apparel industry needs to revamp sourcing strategies

 

A recent global survey by McKinsey & Company of apparel chief procurement officers (CPOs) highlights five key themes shaping the industry's approach to sourcing. The findings indicate a significant shift towards prioritizing efficiency, supply chain resilience, and sustainability, with a growing emphasis on collaboration with suppliers.

Key challenges

Demand volatility: Fluctuations in consumer demand and the bullwhip effect disrupt the supply chain, leading to shortages and overstocking. 

Geopolitical tensions: Rising geopolitical instability is prompting brands to diversify their sourcing footprint to mitigate risk.

Sustainability regulations: Increasing regulations require brands to ensure ethical and environmentally friendly sourcing practices.

Competition: Fast-fashion giants like Shein are disrupting the market with rapid innovation and lower costs.

Five themes shaping apparel sourcing

Efficiency amidst volatility: Brands are prioritizing efficiency across the sourcing process to combat volatility and rising costs.

Rebalancing footprint: Brands are looking to diversify their sourcing bases to mitigate risk and improve speed and agility. Nearshoring is gaining traction, but challenges remain.

Strategic supplier relationships: Brands are forging deeper, long-term partnerships with suppliers to improve planning, resilience, and efficiency.

Sustainability: Sustainability is a growing priority, with brands working with suppliers to meet environmental and social responsibility goals. Data transparency is crucial for effective sustainability efforts.

Digitalization: Brands are embracing digital tools like 3D modelling and data analytics to improve decision-making, transparency, and efficiency.

To move ahead brands need to adopt certain strategies. To begin with they need to utilize data-driven strategies to establish sustainable sourcing goals that deliver economic value. Collaborate with suppliers for value-backed sourcing, material innovation, and cost optimization. Engage in transparent price discussions with suppliers using cost analysis tools. And build strong, mutually beneficial relationships with suppliers through value-sharing models and joint planning.

As the apparel industry transforms brands along with suppliers need to adopt new strategies, prioritize collaboration, and leverage digital solutions to build a more resilient and sustainable future.

 

 
LATEST TOP NEWS
 


 
MOST POPULAR NEWS
 
VF Logo