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The Operational & Business Benefits of Verified, Visible Supply Chains

Over the past year and a half, Covid-19 has thrown numerous curveballs at fashion supply chains.

Most recently, companies have had to contend with logistical upheaval tied to a lack of labor, closed ports, and a short supply of containers and equipment. As shipping times and costs rise, companies are also facing longer lead times and lowered inventory. At the same time, materials like recycled polyester and cotton are becoming more expensive and difficult to procure.

To navigate a situation that changes on a seemingly daily basis, companies need to better know their supply chain, including details about vendors, factories and input origins. Physical raw material-level traceability can help provide this visibility, enabling companies to follow and verify inputs as they move through each production phase. For instance, Applied DNA Sciences’ molecular tags are placed on raw materials and can then be scientifically tested to prove that a specific garment or shoe has been made with the claimed input.

“There will be visibility of the products and scientific proof that the product is genuine, made within your supply chain, and consistent with the claims made by your brand,” said Wayne Buchen, vice president strategic sales, Applied DNA Sciences.

Supply chain oversight seems to be on many companies’ top priorities and rightfully so. In a recent survey of supply chain executives by consulting company EY, respondents named end-to-end visibility as the number one ingredient for success. But at the same time, most are falling short of this goal, with only 6 percent saying they are “very confident” they have full visibility.

In EY’s study, supply chain visibility was most commonly sought as a risk prevention and cost reduction strategy. Looking beyond Covid-19, apparel is particularly susceptible to disruptions, such as pandemics or climate-related events like flooding or heat stress. An analysis from consultancy McKinsey & Company found that fashion is the industry with the second highest exposure to potential shocks.

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For apparel brands, the strategic benefits of being able to trace product journeys include seeing where they might have bottlenecks or vulnerabilities hiding in their supply chains. For instance, this could uncover an excess need for particular subcontractors, or show the potential for more vertical integration. “The streamlining of the value chain will reduce lead times, inventories and the product development process,” said Buchen.

As part of their push for transparency and a single source of truth, many firms are adopting platforms such as enterprise resource planning (ERP) systems. Others are turning to blockchain for data storage. But the value of these tools is only as good as the integrity of the data entered. With both blockchain and ERP, information can be entered by any party with access, making the data less secure.

In contrast, products tagged by Applied DNA can be tested to scientifically validate data. The company’s CertainT portal can be plugged into a firm’s existing ERP system via an API to upload authentication certificates and other testing data.

Aside from making supply chains run more cost effectively and smoothly, traceability also helps guard against sustainability-related risks. Since the pandemic, being transparent about environmental and social responsibility is more important than ever.

“Covid-19 has changed the way the world looks at supply chain traceability and how to prove—not just meet—sustainability goals,” said MeiLin Wan, vice president, textiles at Applied DNA Sciences. “While brands are ultimately responsible for being more transparent and accountable for their claims, it’s also about knowing your supply chain and working together. It’s about trust.” Amid lockdowns, consumers had more time to research companies’ targets and progress, and they are weighing sustainability into their purchasing choices.

In addition to consumer pressure, market forces and regulations also necessitate that brands know their supply chain past tier 2, or the fabric vendor. For chemical safety, these include everything from the REACH restricted substance list in Europe to California’s Prop 65. Brands importing into the United States also need visibility to comply with Customs and Border Patrol crackdowns on cotton from China’s Xinjiang Uighur Autonomous Region. Companies’ sourcing strategies often focus on fabrics, but taking a “fiber-first” approach can provide more awareness and assurances of upstream operations.

Along with sustainability, companies need to stand by their product quality claims. Having visibility ensures that the right inputs were used, guarding a brand’s reputation.
“Ultimately, the proof is in the pudding,” said Wan. “If you produce a high-quality product, and have tighter controls and traceability in your supply chain, it can help to improve the way you make and authenticate your products. Trust is built through consistency in quality, and what makes consumers love products is that they perform as they are intended.”

Click here to learn more about Applied DNA Sciences.