During the three-year pandemic, the terms “disruption”, “resilience” and “digitalization” turned from optional practices into do-or-die measures.
With supply chain disruptions, inflationary, geopolitical and climate challenges set to continue into 2024, how have businesses in the region coped and built up buffers to cushion the blows from so many directions?
During the COVID-19 pandemic, how did industries dealing in non-emergency goods such as fashion and textiles weather business and market disruptions with digital technology?
A good candidate to share insights on the topic of digitally-enhanced resilience is Gareth Brooks, Managing Director, VF Asia Sourcing Limited, which counts brands such as Timberland, The North Face and Vans in its portfolio. The firm’s global supply chain produces, sources, and moves over 200m units of apparel, footwear and equipment. Its teams based in the Singapore office oversee 70% of this global production effort, end-to-end.
DigiconAsia: How is the APAC/Asia region doing in regard to leveraging digital technology to buffer the setbacks and disruptions?
Gareth Brooks (GB): As the challenges continue, we expect businesses in the region to double down on fortifying their supply chain resilience through deploying AI and smart, integrated cloud-based platforms and solutions, combining hardware and software to reduce reliance on inflexible legacy infrastructure.
It will be important to strengthen supply chains so that they continue to run smoothly — a process that must not stop — because disruption can and will happen: so we must always be ready to adapt. In my organization’s case, the supply chain is designed to be hyper-local and hyper-digital, which means greater speed and agility in making, sourcing, and moving products around the world. Key aspects that we have learned to achieve this are:
- Adopting “local for local” manufacturing: Supply chain stability is easier to achieve when goods are kept in their region of origin, and while regional operations can still experience challenges, alleviating shipping logistic stress gets products to customers faster. For example, of the 14% of my organization’s total units manufactured in China to satisfy global needs, the United States only imports around 3%.
- Innovating to reap efficiencies: Leveraging digital technology such as data analytics and AI will improve demand forecasting, inventory management and production planning to allow organizations in APAC/Asia to respond effectively to changing market conditions. We take this one step further by investing in digital technology to produce fewer but more effective samples in the form of 3D product renderings. This expedites the supply and demand process by taking away the need to ship prototypes between factories and offices, which helps address consumer demand quickly, all while reducing waste.
- Ramping up warehouse efficiency: Warehouse automatic/robotics at fulfillment centers can increase worker efficiency and help shipping centers adjust to the increase of product demand online.
DigiconAsia: How was the global fashion supply chain in APAC affected during the 2022 to 2023 pandemic period?
GB: The pandemic has had a profound impact on the fashion supply chain in the region, a crucial manufacturing hub for the industry. Lockdowns, factory closures, and workforce shortages disrupted manufacturing, resulting in production delays. Simultaneously, global transportation and logistics experienced challenges like container shortages and port closures, leading to supply chain delays. Inventory issues, including excess stock and restocking delays, further complicated matters for fashion brands and retailers.
This accelerated digital transformation, making e-commerce essential for reaching consumers. In the case of my organization, VF Corporation, we worked with partners like Alibaba’s Tmall Innovation Center to design products that appealed to the target consumer through the use of big data to drive consumer understanding and insights.
By setting up open sales channels that achieved all-round integration, our brands were able to leverage digitalization to optimize and create a personalized consumer experience that synergizes well with traditional channels.
During the pandemic, the pressure to innovate and manage labor/worker-safety issues and sustainability practices took a toll, with many entities adopting supply chain strategies to enhance resilience. The pandemic also brought to light the importance of ethical and sustainable sourcing and production practices.
DigiconAsia: How did regional hubs like Singapore bring a semblance of resilience when countries were locked down at various levels of strictness? By now, is the fashion industry now much more resilient — ready to handle the next pandemic (as predicted by the WHO) of a similar or more severe nature?
GB: Singapore played a crucial role in mitigating supply chain challenges, which is also why we made the collective decision to move our regional supply hub to the city state. In addition to an efficient logistics infrastructure encompassing streamlined customs procedures and advanced warehousing and distribution that ensured the smooth movement of goods, we were also able to tap into an excellent pool of local talent to fluidly adapt to market disruptions and shifts.
By now, the pandemic and the lessons we learned have spurred lasting changes in the fashion industry, including the practice of diversifying supply chains, enhancing digital capabilities, improving inventory management, and prioritizing sustainability and resilience. These changes reflect a shift towards more adaptable, sustainable, and technologically advanced supply chains.
DigiconAsia: How can digital technologies and digital diplomacy be balanced in such a way that the most basic trades can continue even in the midst of geopolitical disruptions and conflicts?
GB: An over-reliance on any one country or entity as a manufacturing and supply chain hub is a risk regardless of the geopolitical dynamics of the day. Supply chains should be anchored on resilience and diversification and designed to be as impervious as possible to any type of disruption.
Businesses with an extensive supply chain should spread production operations across different countries or regions to reduce single-source dependence. Robust risk management and contingency planning can address disruptions stemming from any unforeseen factors.
In addition to deploying blockchain technology to enhance supply chain transparency — effectively reducing disputes and building trust — companies can also leverage multilateral trade agreements to foster cooperation. For example, working closely with public sector partners in Singapore has allowed VF Corporation to enhance resilience further through strategic partnerships. Public-private collaborations facilitate better weathering of geopolitical challenges, ensuring the continuous flow of essential goods.
DigiconAsia thanks Gareth Brooks for sharing his industry and professional digital transformation insights