The Covid-19 pandemic exposed many holes in the supply chain, particularly rooted in China, where so much of the apparel industry is reliant on not only the operations of the factories themselves but also the raw materials used to develop and manufacture the garments. At the same time, the fluctuation in supply and demand to start the pandemic alongside the increasing concerns for the global environment also created another challenge: fulfilling growing demand for sustainable and alternative fibers that protect and provide health benefits.
In a panel at the Sourcing Journal Sourcing Summit last month, both Florian Heubrandner, vice president, global business management textiles at Lenzing and Gary Adams, president and CEO of the National Cotton Council of America, described the demand for raw materials as a “hard stop” in March.
“If we looked at some of the textile manufacturers and the yarn spinners, either they were forced to close or the companies they were selling to were shut down for a time, so in addition to the consumer spending taking a big hit, we saw the cotton consumption by the U.S. textile industry in April and May being off from 80 to 90 percent,” Adams said. “It has recovered somewhat, but it’s a slow recovery and I‘d say we’re consuming in the range of maybe 60 to 70 percent of what we were pre-Covid levels, so the drag on demand is still there.”
But Heubrander noted that throughout the pandemic, as demand increases again, brands are starting to share concerns as to whether they are really getting the branded fiber they’ve been paying for, leading transparency to become a main determinant of fiber selection. He highlighted Lenzing’s launch of a blockchain-based technology with TextileGenesis, which enables the textile producer to share a digital twin that travels with every piece of fiber produced.
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“This whole interruption will hopefully drive the adoption of these traceability technologies in our industry,” Heubrandner.
The diversification of raw materials also is going to come down to whether the actors in the supply chain are willing to be innovative in the wake of the pandemic. One such company, manufacturing firm Hong Kong-based Luen Thai Holdings Limited, is beginning a process to colorize its fabrics without water, without the requirement of any minimum order quantities regardless of the fabric, whether its cotton, synthetic or woven-knit.
To accomplish this, Luen Thai and an unnamed partner are building facilities in Cambodia, Vietnam, China and the Philippines to deliver materials to home factories and their customers’ factories, according to CEO Raymond Tan. The manufacturer also has developed a nanofiber coating for antiviral and breathable, waterproof garments.
As overall materials demand slowly creeps back up, businesses within the supply chain now have the question of where they want to be sourcing their materials from to ensure they don’t struggle to meet demands. But some within the apparel industry made it a point to start diversifying well before the pandemic began.
In fact, Tan said that firm was likely more prepared for the pandemic because it has more than 20 production facilities across more than 10 markets in Southeast Asia enabling it to operate and source its materials vertically and locally.
“I don’t believe the solution lies with China plus-one or -two, I believe the solution lies with a China and non-China supply chain for the international market,” Tan said.
John Varvatos Enterprises had started diversifying alongside the start of the tariff war between the U.S. and China, with the fashion company traditionally being more European-centric in sourcing its collection products and more Asian-centric and Asia-centric for its Star USA and leather products, according to Luisa Herrera-Garcia, the brand’s senior vice president of production.
But as the tariffs continued to escalate, John Varvatos sought out new markets such as India and Peru and has since established sourcing partners in the past two years.
“Everyone thinks diversification can happen overnight,” Herrera-Garcia said. “You really have to take time to study who your partners are going to be. What are their codes of conduct? Then it’s communicating with them little by little to ensure it’s the right partnership.”
David Parkes, founder and CEO of performance textile manufacturer Concept III, said compliance is always going to come up when having the diversification conversation, particularly among outdoor brands.
“While certainly, everyone is looking for a shift, and I see some movement through India, the question of compliance is such an overriding issue that my customers aren’t going to move quickly without making sure that the supply chain meets strict requirements. It’s happening, but with some caution,” said Parkes.
All of the sessions from this year’s virtual Sourcing Journal Summit, R/Evolution, are available on demand. Follow this link for more information.