February 16, 2021

Sourcing new suppliers in the pandemic era?

Ram Radhakrishnan

Companies throughout the apparel supply chain are facing difficulties stemming from a trifecta of ordeals as they struggle to cope with Chinese New Year, a shipping crunch, and the coronavirus pandemic. Planning around Chinese New Year is an annual undertaking for brands and retailers with production in China. Factories are back to business in early March but the impact of severe delays and quality issues loom afterwards. The pandemic and uneven global economic recovery make this time period trickier than usual, contributing to container shortages and extreme shipping delays. Shipping costs are skyrocketing as companies wait weeks for containers and pay premium rates. Chinese New Year is now and the rest of the world is open for business which poses the question: is now the time to build a new supplier strategy?

Garment manufacturers have been severely impacted by the coronavirus pandemic. Historically, supply chain investment has not been a priority in the apparel business. Until 2005, the Multifiber Arrangement was in place which artificially created apparel manufacturing industries in countries where no strategic advantage existed besides low cost. Capacity was created in low-cost locations and there was little incentive for innovation due to the number of factories and excess capacity. In 2021 the sourcing landscape is changing. Reduced capacity, new sourcing models, technology advancements, and the imperative for sourcing strategies that prioritize resilience and visibility are contributing factors. It is no longer about simply finding a factory in a particular region, but rather locating a compliant factory with the technical expertise to develop and deliver product: pattern making, sample creation, tech packs, raw material sourcing, and quality control. SILQ’s seasoned quality assurance experts serve as local representatives for brands and retailers in Vietnam, China, and India. We engage with global stakeholders, providing services including tech pack tune-ups, coordination of sampling processes, onsite production monitoring, and quality assurance. Global supply chains are evolving and we offer a full-service sourcing solution with geo-specific insights built on a foundation of deep domain expertise, localized knowledge, and technology. 

The coronavirus pandemic has demonstrated the need for diversified sourcing hubs but retailers and brands are also looking to consolidate their vendor bases with a focus on strategic relationships. A recent report suggests that new sourcing hubs for apparel and textiles should be as vertically-integrated as possible. The pandemic encouraged companies to look into near-shoring and on-shoring, though challenges in making this a reality include capacity constraints and raw material limitations. Regulatory shifts impacting supply chains are on the horizon, with the Biden administration expected to focus on environmental, social, and governance (ESG) policies. 

SILQ recognizes the imperative for restructuring apparel supply chains with the disintermediation of middlemen and increasing relevance of technology applications to streamline workflows. SILQ delivers inline solutions online eliminating time-consuming, manual processes and enabling our customers to view supply chain production activities in real time. We are thought partners, technologists, and operators here to support your journey in defining the future of apparel supply chains during these unprecedented times.

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