The ongoing trade war between the U.S. and China has been an unwelcome distraction for some in the apparel industry and a reason for real concern for others. Either way, the impact cannot be ignored. If nothing else, the situation has been a learning experience for the industry, albeit a costly one.
The geopolitical turmoil has illustrated that the unforeseen can crop up at any time, making supply chain agility a key differentiator in the current landscape.
“Agility comes down to two main things: the ability to anticipate and the ability to act fast,” said Tobias Grabler, COO of Topo Solutions, which offers a digital quality management software and compliance solution. “Once a disadvantageous situation is reality, it is about how fast you can switch from your old production setup to a less costly one, without jeopardizing your product quality and compliance that can harm your brand image.”
Part of preparation is having access to information.
For brands hoping to exit China for countries with lower tariff rates, placing more goods with existing sourcing partners would be the logical first step. That is unless those production facilities were already struggling.
That’s the kind of insight Topo’s benchmarking tool provides. This apples-to-apples look at how well each partner is performing gives brands the necessary insights to compare quality, compliance and pricing information, Grabler said. “Having data-based visibility into your entire supplier portfolio and also on an aggregated country level helps organizations to develop timely sourcing strategies and contingency plans,” he said.
For brands that haven’t digitized their supplier information, the process of evaluating new supply chain options would require them to sift through a mountain of emails, spreadsheets and Word documents culled from a variety of different teams throughout the organization. Just imagine the disruption that would ensue with every tariff-related tweet.
“This tedious procedure is not only very time consuming but also error-prone. Individual team members might calculate differently from others using a different base, scale, time frames or formulas, which makes the comparison of data among departments very difficult,” Grabler said. “Companies usually lose several weeks and countless working hours in compiling such reports.”
And in fashion, days mean dollars.
Not only can Topo’s platform help mitigate the impact of external issues like the trade war, it can help companies stay on top of day-to-day performance, allowing brands to become more efficient.
One example of how data and transparency can enable smarter decision making is in evaluating factory partners. While those that consistently uphold quality standards could be moved to self-inspections, those with areas of concern could be provided with additional training to help root out issues. And in cases in which the data shows a factory is underperforming, the brand can determine if it’s time to sever the relationship.
“We are looking at savings of up to 30 percent for quality inspections and lab testing—not even taking into consideration the reduction of cost of poor quality down the line—and up to 70 percent savings for auditing costs,” he said.
As brands bring new suppliers online, reaching optimal efficiency as quickly as possible will be the focus. And that starts with evaluating potential factories before making a commitment. Topo’s solution provides brands with a comfort level, ensuring that the move has been de-risked as much as possible.
“Before you place an order you can perform pre-assessments or pre-audits according to your specific requirements,” Grabler said, adding the evaluation can be granular down to air and water testing. “With Topo, you can collect the necessary information about the production facility including certificates in a structured way.”
And once your goods are in place, the system’s real-time monitoring allows brands to receive live pictures and videos as production is taking place. With remote access, brands can ensure quality, safety and sustainability standards are upheld, the latter of which has become a serious concern.
“The mindset of managers, workers, politicians, investors and, probably most powerful, the mindset of consumers is shifting to being more conscious about it,” Grabler said. “Topo is built to help brands, retailers, sourcing agents and factories to fully integrate sustainable practices into their operations, resulting in products that are both well made and manufactured in a sustainable way.”
Visit Topo.cc to learn more about the company’s digital supply chain solutions.