Recently much has been discussed about the capacity crisis: fuel supply shortages and empty supermarket shelves in the UK – disruptions caused by the shortage of European drivers in the UK and the COVID-19 pandemic. This situation did not save many industries and fashion retailers are also struggling with the relentless disruption in the supply chains, which might escalate as the holiday season is approaching. From cotton prices fluctuation to Brexit, here are the challenges in the fashion industry’s supply chain.
Slowing fast-fashion down
In the countdown to the holiday season, retailers and brands are being pressured by the booming consumer demand, which has pressured logistics capacity. The driver shortage has also strained the deliveries time. The fast-fashion business model aims to bring new products to the stores every three weeks, the supply chain bottlenecks, higher freight and labour costs are slowing fast-fashion retailers down. Another pain in the business model is that the products are time-sensitive, difficult to sell out-of-season. Thus, the delays could make the consumers lose interest in the product or leave empty shelves.
Brexit’s impact on the supply chain
Brexit makes the situation in the UK more complex. Custom delays and more paperwork for EU drivers continue to add extra time and costs to the supply chains, which can jeopardize the holidays’ fulfilment orders and reduce competitive advantage in the sector.
Cotton prices and manufacturing disruptions
It is not just supply chain issues as other higher costs are disrupting fashion operations. According to the A Index, raw cotton prices have increased 18% to the 2020 average in August. Recent COVID-19 outbreaks have also shut down manufacturing in countries like Vietnam, Indonesia, and Malaysia, where fast-fashion brands outsource their production.
Navigating the disruption
Production managers and supply chain leaders could strive for accurate forecasting and expanding lead times to mitigate the impact of delays. Combining adjustments in production timelines with accurate forecasting and consumer analysis can help brands and retailers balance out the effects of the crisis.
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