Blog: Leonie BarrieLatest supply chain leaders?

Leonie Barrie | 5 June 2017

Swedish fast-fashion retailer H&M, Zara brand owner Inditex, and sportswear giant Nike are not only among the world's leading brands, they also have some of the best supply chains too, according to a new review. The latest 'Supply Chain Top 25 for 2017' ranking from technology research firm Gartner puts Inditex at number three, while H&M and Nike make the number five and number eight slots respectively.

While all retailers appear at risk of losing some market share to online giant Amazon, analysts suggest some are more immune than others. A recent report identifies a number of "super stocks" that are "more un-Amazonable" – including luxury goods firms and deep-discount companies.

Digitalisation was a buzz-word at the recent Texprocess apparel technology trade show in Frankfurt, Germany, with new tools allowing data to flow seamlessly from digital design and development all the way through the supply chain to help garment manufacturers cut costs, improve quality,increase productivity, speed time-to-market, reduce waste and stay competitive.

Separately, the stark message from a recent US technology conference was that manufacturers need to embrace digitalisation and completely change the way they sell and produce products if they are to survive.

Visibility of the entire supply chain is the building block to both short and long-term progress in sustainability and ethical trade, according to Tara Luckman, fabric and sustainability manager at online apparel retailer Asos. "All roads lead to transparency. If our practices in the fashion industry are not good enough to tell our customers about, then they're just not good enough."

And Marks & Spencer is teaming up with Oxfam to gain a deeper understanding of the link between sourcing practices and human rights impacts in India – and will also disclose raw material supplier details as part of a new Plan A 2025 eco and ethical programme.

Cambodia's garment industry could be ramping up its use of subcontractors as new figures show exports continued to grow at a solid pace in 2016 but the number of factories and workers declined.

And the World Bank has committed US$100m financing to help Bangladesh diversify its exports in labour and skill-intensive industries beyond the garment sector and create more and better jobs.

Despite earlier threats of chaos, something resembling sanity seemed to hit most of the world's major trading nations during May. In the US, Trump's team made some sensible announcements; and claims of the EU’s imminent collapse now look unlikely.

But just when things appeared to be getting better for Central America, the proposed US Border Adjustment Tax and possible changes to the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) are unnerving maquilas.

Despite growth in cotton stocks and production outside of China, the world's largest user of the fibre, international cotton prices remain high – and forecasts have been raised for 2017-18.

May proved to be another difficult month for the handful of US apparel retailers still reporting their monthly comparable sales figures, with all but one recording a decline.

And retailers should continue to invest in plus-size clothing, as research finds that one in every five pounds spent in the UK on womenswear this year will be spent on plus-size garments.

Meanwhile, in other news, luxury lifestyle brand Michael Kors is to close up to 125 stores after plunging to a Q4 loss; The Zero Discharge of Hazardous Chemicals (ZDHC) foundation has launched the Chemical Module of its ZDHC Gateway online portal; the CEO of Levi Strauss has joined the chorus of disapproval at the US withdrawal from the Paris Climate Accord; and new US legislation proposes adding some footwear to the Generalized System of Preferences (GSP) programme.

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