The signals are clear: an economic slowdown is upon us. 2021 and 2022 saw heavy investments in consumer-facing product development like websites, marketing, and 3D technologies to meet consumer demand. Fortunately, many brands and retailers are better off than they were a year ago, with the fashion industry’s revenues growing by 21% between 2020 and 2021. Downturns always follow such expansions, and industry veterans know the drill well: retailers switch to a leaner operating model, and executive teams meet to look for ways to reduce costs.
Yet this coming recession will also reveal two camps of executives: those who hibernate and those who take advantage of the slower consumer demand.
The decade so far has been an unrelenting whirlwind of activity. Much like having a house full of guests, staying ahead of all the household chores like cooking, cleaning, and decluttering is difficult if you are constantly entertaining. Well, the guests are stepping out for a bit — now is the time to clean up. In terms of supply chain management, that means using the extra time to invest in core infrastructure. It means using this slowdown as an opportunity to digitize your operational backend so that you can reduce waste, take advantage of data and analytics, and become more resilient.
The trick, of course, is finding cost-efficient ways to do this.
4 industry trends for 2023
In order to know how to minimize risk while investing in core infrastructure, let’s look at some trends that 2023 has in store for the global supply chain:
1. Global uncertainty
Careful planning is essential to stay ahead of fragility and recessionary risks in the coming year. Risk mitigation strategies must be agile enough to protect against conflicts, new regulations, and other disruptive forces.
There will be increased scrutiny by consumers and regulators over how brands communicate their sustainability credentials. Brands will need to prove that they are making meaningful changes.
3. Resilient, digitized manufacturing
Disruptions have spurred supply chains to evolve, and textile manufacturers will continue using enhanced digitization to create more resilient supply chain models.
4. Organizational restructuring
“Fashion executives need a new vision for what the future organization will require,” writes Business of Fashion, focusing on “elevating teams and critical C-suite roles to execute on priorities like sustainability and digital acceleration.”
Cutting all budgets vs. focusing on core priorities
Rather than slashing all budgets across the board, it is wiser to adopt a zero-based budgeting strategy.
This strategy involves picking two types of projects in your company: mission-critical priorities related to digital and analytics capabilities, and core projects that are less urgent but add long-term value. “Continue only the projects that fall into those two categories; stop all others,” writes McKinsey. “A range of savings levers — such as vendor renegotiations and tactical moves to the cloud — can help dramatically reduce your operating costs.”
Cutting all budgets to weather a slowdown is akin to pulling your money out of the stock market whenever the market dips. It is a fear-based reaction that, while freezing cash reserves in the short-term, puts you at a disadvantage during the next up-cycle. Think about the time and effort you invested over the past 12-18 months to build your teams. The time to reshape your supply chain is not when the market is flooded with capital, and the workforce is overextended; the time for action is the quiet moments in between when employees have extra time and capacity to tackle long-standing problems.
What does digitizing your supply chain look like?
Digitizing your supply chain is not about acquiring plug-and-play software but focusing on people and processes. Here’s what that journey looks like in practice:
1. Make data-driven decision-making the end goal
What specific problems do you need to solve in your supply chain? No matter what your answers are — and you should have those answers before you embark — data-driven decision-making will be critical.
“At the foundation of end-to-end visibility are reliable, predictive real-time data and actionable analytics,” writes Forbes. “An effective digital supply chain platform can streamline data entry across business operations, automatically collecting and updating data points from all parties within the supplier network.”
This leads to automatically triggering preventive actions and allocating more time toward more profitable activities. Make sure to choose a software solution that provides best-in-class data capture and analytics.
2. Implement advanced analytics strategically
Decide where advanced analytics will deliver the largest impact, and build well-defined individual use cases that solve specific business problems. Once you’ve identified these use cases, prioritize them. “Trying to pursue each of the advanced analytics use cases simultaneously is the fastest way to fail,” writes McKinsey. “Ideal analytics road maps balance quick, impactful wins with longer-term, more complex investments.”
Ensure you’re putting the proper ecosystem in place to capture, store, and analyze as much data as possible and relevant. These analytics will help you create an agile operating model that accelerates time to value and enables you to gain independence from the forces of seasonal calendar cycles.
3. Onboard all stakeholders in your supply chain
Take time to map out your supply chain thoroughly. Once you’ve done this, focus on collaborating with supply chain partners to onboard the new solution and train their employees. Your digital supply chain solution should make onboarding as easy as possible to help achieve time to value.
4. Centralize communication
Use this opportunity to root out all inefficient and decentralized modes of communication (email, texts, PDFs, etc.) and consolidate them into a single channel within the platform.
5. Interconnect production pillars with real-time visibility
Four key pillars of supply chain management include quality, compliance, tracking, and documentation management. Traditional supply chain management keeps these pillars siloed at worst and linearly connected at best. A robust digitized solution interconnects these pillars to one another, maintaining data accessible across your production matrix and reaping maximum benefits from analytics.
6. Identify your KPIs
Key performance indicators (KPIs) will be your go-to metrics when benchmarking progress. Crucial metrics include KPIs like Defect Trend, Defect Percentage, and Supplier Performance Ranking.
Retailers switch to a leaner operating model with Inspectorio's integrated supply chain platform
With Inspectorio suite of comprehensive, interconnected cloud-based solutions, retailers can switch to a leaner operating model — supported by real-time visibility, automated supplier assessments, and insightful analytics. The Inspectorio platform includes the Sight quality management system (QMS), Rise compliance management software, Tracking manufacturing production tracking software, and DocuFlow document management software.
Inspectorio helps retailers gain full transparency and control over their production pipeline — from suppliers to vendors. Data is collected in real-time and stored in a central cloud database, enabling retailers to make informed decisions quickly. This leaner operating model increases efficiency and helps better quality control that mitigates risks of product recalls, ensures supplier compliance, and leads to healthier profits.
Our customers have seen tremendous ROI with Inspectorio, including improved efficiency, reduced labor costs, and fewer product defects. Companies using self-inspections have seen an average ROI of 221% within just the first year of use, and suppliers who switched to a digital self-inspection platform saw 40% cost savings.
According to Sara Lim, PPC Officer at Crystal Apparel Limited, "Inspectorio always adapts to its user's needs. It helps me to shorten my working time."
With Inspectorio, retailers can reduce costly miscommunications, improve production accuracy and speed up time to market. Our platform helps provide the necessary tools for increased transparency across the entire supply chain and enables you to gain independence from the forces of seasonal calendar cycles. This streamlined approach ensures that all stakeholders are connected, decisions are made efficiently, and problems are quickly identified and remedied.
Hamza from Stitch 'N' Style (Pvt.) Limited says, “Inspectorio helps us to increase transparency and avoid any miscommunication.”
Digitizing quality operations is a game-changer for manufacturers and retailers. Liberty Mills, a leading textile manufacturing company in Pakistan, switched to Inspectorio for their internal quality operations. Within 6 weeks of adoption, they saw a significant improvement in their quality and compliance operations.
Khizer Jaffri, Deputy Manager at Liberty Mills, says, “Inspectorio is one of the best quality platforms to monitor, analyze, and evaluate quality data, which helped us reduce internal inspection failures by 3% and lead time by 28% in a short span of time.”
Inspectorio’s cloud-based platform allows you to embrace the ever-changing retail landscape, manage production more efficiently, and ensure quality remains at the forefront of your business operations.
Request a demo to see how Inspectorio can improve your retail supply chain operations through actionable insights and data-driven collaboration.