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Sourcing Journal Podcast: Episode 4 Lifting the Fog

The apparel industry has become more aware of the need for responsible business practices and how processes affect the planet and its people. But as companies move toward more sustainable practices, more and more are recognizing that to reach their goals they need great visibility into the supply chain. That’s where traceability comes in. And beyond these social and environmental benefits, traceability also can have an economic impact on businesses as they attempt to track and verify premium inputs; eliminate waste, overruns and out of stocks; and deliver on consumer expectations.

This week, we’re discussing the importance of traceability in the supply chain, how brands and retailers are going about it today and how it interrelates to other key industry initiatives like sustainability.

Click here to listen to the full episode.

Below are excerpts from our discussion with four industry professionals who have seen the benefits of traceability in their organizations.

MeiLin Wan, vice president of textile sales at Applied DNA Sciences, on the demand driving traceability:

“When you have poor traceability, what it does is it opens up companies to the possibility of issues like slave labor, product contamination and pollution—all types of things that can now create difficulty in communicating to the end consumer. It goes way beyond visibility in the supply chain it helps them manage risk more effectively, and it really does have a direct impact on consumer trust and firm sustainability. If you don’t make information more public about your supply chain, the chances are the end consumer will do it for you.”

Jonathan Aitken, director of RFID and digital partnerships at Avery Dennison, on the opportunity greater visibility into the supply chain can provide:

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“When I was at Lululemon, I ran their RFID program and we implemented RFID in every store in North America and across Asia. One of things we were able to do from that is once we increased our inventory accuracy, we were able to decrease labor costs as well as increase revenue. In addition, we were able to turn on new features like ship from store, which was very transparent to the end customer but what that does is it takes you from having one or two or three warehouses to having hundreds so every Lululemon store becomes a mini warehouse.”

Julie Vargas, director of digital solutions at Avery Dennison, on the tangible benefits associated with investing in traceability:

“Its important to remember that the supply chain as a whole, when enabled by this type of data, can really be transformed so if you have accurate inventory, you know what’s selling through and feel confident in what you have where, you can eliminate things like overproduction. Where this gets really exciting is back into the food space. Think about being able to see expiration dates quicker [or[ moving things from back of house to front of house before they get put on markdown in the apparel space, all leading to an average of 2 to 5 percent margin lift across the industry.”

Nina Shariati, project manager for technology and Higg Index at fast-fashion retailer H&M, on why transparency needs to be an industry-wide effort.

“We added a transparency layer to our conscious collection…We got feedback that consumers said this is great but how can I compare what you’re doing with other brands, which raises the issue that it’s not enough that H&M is being transparent or a handful of brands are being transparent. You need transparency across the industry for it to help the consumers with their choices…When it comes to scaling it up and making sure other brands follow, a handful of brands can take the lead and show the way but eventually you also need that push action as well to make sure the full industry is moving.”

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This podcast episode is made possible by Cotton Incorporated, a not-for-profit company funded by U.S. cotton producers and importers, and whose mission is to increase the demand and profitability of cotton. Discover What Cotton Can Do.