How digital fashion, AI can transform fashion supply chains in 2024

A panel discussion at the Digital Fashion Summit reveals how AI and digitalisation can reshape traditional fashion supply chains and offer a pathway to sustainability and accountability in 2024.

Isatou Ndure November 23 2023

Fashion supply chains have long been rooted in traditional models that have not kept pace with rapidly evolving consumer demands and sustainability concerns.

In a recent panel discussion at the Digital Fashion Summit hosted by New Codes on the transformation of fashion supply chains through digitalisation and AI, experts shed light on the challenges and opportunities facing the industry.

The conversations highlighted the urgent need for change in an antiquated and fragmented supply chain, discussing how innovations in digital fashion, AI, and predictive analytics can reshape the way we approach sustainability, prototyping, and demand-led models.

The challenge of outdated supply chains and overproduction

Zofia Zweiglinka, a fashion reporter at Glossy magazine highlighted the sustainability and supply chain challenges plaguing the fashion industry. She pointed out issues like overproduction, waste, the fragmented nature of the current supply chain and the difficulties faced by brands in predicting consumer demand.

Sasha Mcfarlane, the executive director of Future Proof Fashion, which is a fashion consultancy company, delved into the historical context of fashion supply chains and noted that these chains have remained unchanged for over 50 years, with brands relying on traditional methods and slow reactive strategies. The industry chased lower costs, leading to production in emerging markets like China, further extending lead times and increasing waste.

Mcfarlane emphasised the need to adopt AI to make supply chains more efficient, just as the aviation and healthcare industries have embraced the technology for efficiency and safety.

However, there has been significant resistance to implementing AI in the fashion supply chain, despite the industry's substantial environmental impact.

"The theme of the day is AI; AI needs to be a key component of what the future of fashion supply chains looks like," said Mcfarlane.

AI as the key to transformation

Mcfarlane stressed that AI should be used not only for predicting consumer demand but also for optimising supply chain processes, enhancing sustainability, and reducing waste. AI can assist brands in making more informed decisions based on consumer behaviour and preferences.

It can also help in identifying the optimal locations for new stores, and distribution centres, enhancing agility and efficiency within the supply chain.

Scott Walton the head of global business development at digital fashion manufacturer, Kornit Digital, discussed how AI and technology have the potential to revolutionise fashion supply chains. Walton said brands should evaluate the risk and adopt technology to predict trends and make data-driven decisions. AI can help assess the risk associated with different products, facilitating better decisions in production and stocking.

He drew parallels with fast fashion company Shein, which uses data scraping and algorithms to predict and react to trends quickly.

Shein has digitalised both the front end and back end of its supply chain, allowing for on-demand production, reducing waste, and better adapting to consumer demand.

Walton added that Shein's business model is not just about offering cheap products but also about delivering the right product at the right time. It is even exploring the tokenisation of products, adding value over the lifetime of a product through digital content.

While speaking of Shein he said: “I am in no way glorifying them, but I think there's a lot we can learn from the way they have digitalised through Application Programming Interfaces (APIs) through their supply chain from end to end.”

Ahmed Zaidi, the CEO and co-founder of AI platform Hyran Technologies brought up the potential to reconstruct supply chains to be more equitable and efficient, allowing smaller creators to participate in the industry. He believes technology can democratise production and reduce the industry's over-reliance on a few major players.

He's an advocate for a holistic approach to AI, spanning design, manufacturing, delivery, and consumer interaction and said AI can optimise each stage of the supply chain if used effectively.

Addressing the industry's responsibility

The discussion also focused on the need for brands to take responsibility for their supply chains and the treatment of workers, which is timely given the recent minimum wage disputes in Bangladesh.

Zaidi underlined the need for systemic changes in how fashion brands design, manufacture, and deliver products and the importance of addressing the risk and cost aspects of supply chain decisions.

He also identified a fundamental problem in the industry’s approach to AI. He suggests there is an eagerness to implement technology, however there is a lack of infrastructure to support it effectively. He thinks companies should start considering manufacturability in AI-driven design, pointing out that not all AI-generated designs are feasible for production.

Zaidi noted the fashion industry must transition from a cost-based decision-making process to a risk-based approach. By using AI to model probability and assess risk, brands can make more informed decisions that lead to greater sustainability and equitable practices.

The role of legislation and accountability

The discussion also touched on the legislative aspect of fashion supply chains. Alan Hunter, a partner at law firm Lewis Silkin gave his thoughts on the limited supply chain legislation in the UK but noted that other regions, including the EU and the US, are developing legislation that will affect international businesses.

“Supply chains are global in nature, it is going to take a lot for boards and C suites to really challenge the way in which they're operating,” he said.

Hunter called for more harmonisation in global supply chain regulations and explained that enforcement depends on local laws and consumer protection agencies.

The future of fashion supply chains

The panel underscored the urgent need for the fashion industry to adopt AI and other emerging technologies to transform supply chains. AI-driven solutions offer a path to sustainability, efficiency, and accountability. While challenges exist, the industry is at a critical juncture, and forward-thinking brands are already exploring these opportunities.

The panellists believe the fashion industry must keep pace with technology and consumer expectations to ensure a more sustainable and efficient future for supply chains. With the challenges posed by overproduction, waste, and the industry's impact on the environment and workers, embracing technology-driven solutions can pave the way for a more responsible and agile fashion industry.

However, for real change to happen, brands, regulators, and consumers must work together to drive progress and accountability.

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