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The Pandemic Demands of the Supply Chain

The Pandemic Demands of the Supply Chain

27 May 2020
Author: Jasmine Waters

One of the many concerns that has been at the forefront of the fashion industry handling the current pandemic is that of the supply chain. Particularly for companies the operate across an international stage, the question remains as to what should be done for the best – at a stage where we’re still pretty unsure of most things. What can now be done for the best, and why is it so important to take action?

What is likely to happen with supply chains?

Factory production in China is starting to return to normal levels but for many other countries, the long-term picture is not so clear. It’s a natural human instinct for us to step back and wait to see how a situation unfolds, but in this instance, brands and agents must prepare for business recovery as soon as possible. There is likely to be a “bullwhip effect” one the worst of the crisis has passed, meaning those that have decided to dramatically their inventory will find themselves in need of taking new stock – which may prove to be quite difficult. What’s important to remember is that suppliers themselves will be overwhelmed with a probable order backlog as well as a surge of new ones. Those that hesitate to get their orders in are likely to make up the back of the queue.

What can be done to prepare?

As we spend an increasing amount of time in isolated circumstances, the clearer it becomes that we may not be able to handle the knock-on effect as we perhaps handled the financial crash of 2008. At the moment, there is no structural crisis (assuming economic progress is made within the next few months), whereas in 2008, the banks were already on their knees. It’s also extremely unusual that the virus outbreak is affecting both supply and demand in equal measure – factory workers unable to do their jobs while stores face mass closures.

Continuing to communicate with key team members remain the priority of ensuring a brand is in good shape for survival, keeping tabs on which orders are on time, and where possible cutbacks could be made – if any. Taking accurate inventory of all stock will help to achieve this, identifying what can be used and orders for needed materials can be placed as soon as possible, rather than waiting a few weeks. Factories themselves may be at risk of overpromising and underdelivering, so building in delivery delays and logistics disruptions to your overall strategy may prove to be vital.

Ensuring that the partnership between retailers and suppliers remain aligned and intact, chain leaders who act and plan for now will ultimately be the better prepared to recover from the fallout.

Image source: https://www.pexels.com/@kseniachernaya

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