Before the pandemic swept across the globe, an ongoing trade war was already motivating brands to rethink setting up all of their manufacturing in China or any other single location. When the pandemic struck, brands that had diversified their manufacturing portfolio were able to avoid some of the harsher impacts.
But diversifying isn’t easy, and for those who can’t diversify, whether it’s because the cost is too high or their product relies on a very specific region, there are other ways to safeguard the supply chain. During the most recent Glossy+ Talk this week, Yossi Nasser, CEO of intimates manufacturer Gelmart International, spoke with Glossy about some of the ways brands can make their supply chain more resilient and what they should avoid in the manufacturing process.
China’s dominance will end
China has made up a massive portion of the global fashion manufacturing industry in the last 20 years, but its dominance is fading. According to Nasser, it will remain a key part of the manufacturing world but it’s likely that brands will continue to investigate new regions of the world and that reliance on a full investment in China will dwindle.
But Nasser was quick to say that brands won’t just find another part of the world to pour all their investment into.
“There is no next China,” he said. “People often ask that, but the manufacturing phenomenon you saw in China 20 or 25 years ago just won’t happen again. It will spread out to places in Southeast Asia and Africa probably.”
Instead, brands will likely spread out their supply chain across a number of places like Bangladesh, the Philippines and Vietnam, each of which has their own strengths and weaknesses.
Vetting the right partners
With many of fashion’s supply chains thrown into chaos earlier this year and brands scrambling to find new partners and build new relationships, Nasser had advice on how to find the right partner.
“A big thing is data,” he said. “You want to come into negotiations knowing what you need to be made, and you to find out whether the manufacturer you’re talking to has the investment in the right machinery and the right capacity to do that. And on our side, when we’re talking to founders or retailers, we’re looking for passion and trying to find people who are on the same wavelength as us.”
Nasser said that the more time you can spend getting to know the people behind a manufacturer, the better sense you can get of whether they’re a good fit. But you shouldn’t just take them at their word. If possible, visiting their facilities, talking to people on the floor and asking questions will help brands discern fact and fiction.
Nasser said that a retail partner he was negotiating with recently came to the factory, and Gelmart’s team showed him around the facility and explained to him the options behind every single variable in the product he wanted made. That level of knowledge and transparency is what brands and retailers should look for in a partner.
Diversification comes with risks
While diversification across many regions has many obvious benefits, it also comes with drawbacks.
Having parts of the supply chain spread out across the world is logistically complex. Each of those countries has their own laws and regulations on how manufacturing works, and it can be difficult to reconcile them. Nasser suggested having an internal set of rules as a baseline. In countries where the rules are stricter, follow the laws; in countries where the rules are more lax, follow the internal rules.
But diversification also means additional waste. Shipping raw material from one country to be processed in another, assembled in another and packaged somewhere else adds up to a lot of extra shipping costs, as well as a lot of extra time spent waiting for products to arrive and be processed.
Not only that, but the pandemic has made the process of sampling and product development a lot more complex, requiring samples to be mailed back and forth for approval rather than viewed in person.
Nasser said that, hopefully, automation will help offset some of the increase in waste of a diversified product chain.