Amidst geopolitical tensions and the quest for supply chain resilience, apparel industry leaders advocate for a strategic shift in sourcing practices.
Strategic Sourcing Amidst Geopolitical Tensions
The American Apparel & Footwear Association’s recent summit highlighted a pressing issue for fashion executives: the need for strategic diversification in sourcing. With U.S.-China relations growing increasingly strained, industry leaders are seeking alternatives to mitigate risk and maintain supply chain fluidity.
The Push for Sourcing Agility
The COVID-19 pandemic has underscored the vulnerability of over-reliance on a single source. Michael Yee, CEO of MGF Sourcing, emphasized the shift away from China, driven by geopolitical risks. Despite China’s continued dominance in manufacturing, the industry is actively reducing dependence due to trade uncertainties and potential conflicts, such as the speculated tensions between Taiwan and China.
Adapting to a Volatile Global Landscape
Experts at the summit, like Emily Harding from the Center for Strategic & International Studies, downplayed the likelihood of direct military confrontations impacting trade. However, the necessity for agile sourcing strategies remains paramount. Lester Munson of BGR Group stressed the importance of maintaining flexibility in response to rapid global changes.
Short-Term Planning for Long-Term Success
The pandemic has challenged traditional long-term planning, as Luis Velazquez of Fabletics pointed out. The new normal is volatility, and companies must adapt by accelerating decision-making processes. The disruption experienced in Vietnam during 2021 is a stark reminder of the need for swift adaptability in sourcing.
Exploring New Production Hubs
As the industry moves production away from China, nations like Vietnam, Indonesia, and Sri Lanka are gaining attention. However, the potential of nearshoring to Latin and Central America is hindered by the current lack of infrastructure to support apparel needs. Companies are advised to diversify by identifying alternative producers for their key products to safeguard against unexpected supply chain disruptions.
