New Normal: Challenges of Maintaining Sustainable Supply Chains
by Akhil | May 22, 2020
On May 11, we kicked off our New Normal webinar series with some of the leaders in the ecofashion space to explore how brands have reacted to the current crisis, how they navigate in our current volatile and uncertain world and the role of sustainability going forward. This is the third of the series. You can read about the 2nd one here.
For our third installment of The New Normal webinar series on May 13th, we were joined by a panel well-versed in the complexities of ecofashion supply chains for a discussion on The Challenges of Maintaining Sustainable Supply Chains.
Our panel included Prama Bhardwaj from Mantis World, Liesl Truscott from Textile Exchange, Vik Giri from Gallant International and Tricia Carey from the Lenzing Group. This diverse group gave us an in-depth perspective on supply chains in the face of COVID-19 and the struggles that can arise when prioritizing sustainability, moderated by none other than Stephanie Benedetto, co-founder of Queen of Raw and an accomplished fashion tech and sustainability entrepreneur.
Our panelists started by providing us with a brief overview of what they see on the ground with supply chains at the moment and how they’re persevering in light of the current business landscape. It was clear that although each situation is unique, their experiences touched on key themes which included: how essential cost savings are to survival right now; the importance of maintaining strong supplier relationships; and focusing on innovation and the power of technology to see ecofashion through this crisis in the long term.
The impacts have been felt by every player, spanning the length of the supply chain. With the focus really on cost savings during this crisis there have been a lot of fast fashion brands abruptly cancelling large orders as their brick and mortar stores remain shuttered. Vik opened our eyes to the impact that these cancellations are having, not just on factories but on the farmers growing fibers. “Because of the decreased demand of organic cotton in the market, the price has come down about 20%. The farmers who grow very little, make on average about $1200 a year, growing organic cotton from their small farms of about 100-200 acres. They are now forced to sell at a very low price because they cannot hold the inventory and need to feed their families.”
It’s putting a strain on everyone involved, including workers. Vik continued, “India is in total lockdown and workers can’t go to work. The migrant workers are stranded with little to no support from the government and in some cases factories have paid nothing to support them, and then there are some that have paid 15-25% of salaries for those who are in fast fashion”.
And Vik wasn’t alone in his observations, Prama agreed that the effects have been felt throughout the entire supply chain, disproportionately at certain stages, “In fashion supply chains, the margins are not equally shared between each actor. The people at the bottom and at the most risk are those with the lowest margins and are seemingly required to shoulder the burden”. She is pointed out that this is a clear demonstration of how broken the fast fashion system is. In order to see a shift, Prama believes that “Sacrifices need to be shared and whose baby is sustainability? It’s all of ours. We all live on this planet and everybody needs to put in their share too”.
However there’s definitely a brighter side to the situation that Liesl pointed out. Although she isn’t within the supply in the same capacity, she sees this as an opportunity to improve the system. “We’re all in this together, we’re all on one planet, we’re all potentially part of the same supply chain. Where do you start to draw a line between what’s my business and my need to be concerned and how much is it about this joint opportunity or challenge or something we have to deal with together?”. And despite the prevalence of order cancellations, some brands are making an effort to work together to support their supply chain partners. Liesl mentioned she had talked to some brands who were doing what they could, in some instances saying “Maybe I can’t buy all your product right now but maybe I can help to finance the purchase of your organic seeds so that you can continue to plant them. Maybe I can contribute to that sense of security and therefore hopefully there is a sense of resilience in that community.” With this in mind, Liesl really fleshed out what a post-COVID supply chain could look like with a supportive approach from brands and she highlighted “It will be those companies that they remember after all of this is over.”
And for Tricia, one of the players at the beginning of the supply chain, there has been a new set of challenges. “We’re going to face more challenges around quick response time and around minimums as we get through this. The old calendar and the way we have been working, it’s not going to work anymore”. However, Tricia is confident that Lenzing will adapt and be able to continue to provide sustainable raw materials for brands “We have 7 manufacturing facilities globally and we can be very flexible within different supply chains because of that.” And that flexibility is enabled by a lot of new technology that Lenzing is introducing despite the current pause. The brand has been working on implementing blockchain technology into their supply chain as well as a new addition to the lyocell process, which comes with enhanced traceability capabilities by adding a solvent to the blend that contains fiber identification technology.
No stranger to the role that technology plays within the fashion supply chain, Stephanie was quick to highlight how important it will be for brands moving forward. “There are opportunities also with technology that we really can bring value and take the time now to start to look at, innovate on and develop. We do a lot with blockchain and machine learning as well. I think it’s critical for supply chains and for transparency and access to information, not just from a sustainable story-telling perspective but to be able to do business better, to be more efficient, to understand what’s going on in real-time and how to react to a future period of disruption which unfortunately there inevitably will be”.
As time passes, the industry remains at a standstill, but one thing is for certain, solutions are becoming apparent of how to navigate the new normal while prioritizing sustainability. At the foundation, supporting supply chain partners and communities will be key which has the potential to lead to a heightened sense of resiliency and flexibility. Stephanie put it perfectly as she wrapped up the panel: “Of course, we all know the fact of how polluting fashion is to the environment and the world, but that also means that it has the power to solve these challenges and these world crises especially when you come together”. And with consumer’s seeking more mindful purchases, those brands who are doing their part to support their supply chain partners who are disproportionately impacted and to drive change will be the ones remembered, and the ones that thrive in the coming years.
This panel was so insightful and jam packed with incredible insights that this summary just skims the surface. If you want to hear more from Stephanie, Prama, Vik, Liesl and Tricia on the topic of Managing Sustainable Supply Chains check out the full recording of the panel here. We highly recommend it!
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