Upstream Focus is Sourcing Journal’s series of conversations with suppliers, associations and sourcing professionals to get their insights on the state of sourcing, innovations in manufacturing and how to improve operations. In this Q&A, Vince Beaman, vice president, sourcing and supply chain at apparel design and manufacturing sourcing firm Décor Global, discusses why cost isn’t everything and details the sourcing opportunity in Africa.
Name: Vince Beaman
Title: Vice president, sourcing and supply chain
Company: Décor Global
What’s the number one question you get from your clients now that was never really a consideration before?
Agility has been a topic of conversation in the past, but with all the uncertainty in the industry, it has become the top priority for our clients and for us internally.
How do we simultaneously build in the ability to quickly chase goods in strong performing categories, while also having the ability to quickly stop production if the category underperforms? We are forcing ourselves to evaluate how we manage our supply chain and plan not only for upside, but also for downside to better mitigate future disruptions.
How are you evaluating potential brand and retail clients differently now compared to before the pandemic?
We have been fortunate to work with really great brand and retail clients that supported and partnered with their suppliers during the most challenging times of the pandemic. As we review new business opportunities, a new consideration in our overall evaluation is how we feel the potential client treats their suppliers: What is the industry perception? What have we heard from other suppliers? What have we read in the press?
Generally, discussions during the exploratory phase are around positive business potential or results, but we also want to ask: What happens if the business struggles? The answer to that question can be the difference between us moving forward or moving on.
What should be brands’ and retailers’ top lesson from Covid? How can they address this in their operations?
Agility and flexibility are king. The impacts from disruptions like country shutdowns, container shortages, port delays and distribution bottlenecks can be reduced through more diverse and flexible supply chains.
Pre-Covid, many in the industry were focused on lowest costs and shortest lead times, but then expenses skyrocketed and lead times were delayed four to six weeks or more. All the work done in the previous two to three years was undone in the matter of months, and the industry is still feeling its effects.
Meanwhile, those who saw success during Covid had flexibility built into their models. Staggered production timing and later decision-making allowed for shifting or cancelation of unnecessary inventory with limited expense. Country of production diversification allowed programs to be shifted as country shutdowns occurred and helped mitigate some of the container pricing surges in specific countries. At the end of the day, cost is just a piece of the equation. Having the right product at the right time, even if a little more expensive, helps drive a healthier gross margin.
How are you working with your factories to support quick-turn, small-run orders?
Earlier planning is critical to ensure a smooth production flow, and we work closely with them on collaborative pre-season forecasting and planning. We also take what we call a “smart sourcing” approach and work with [our partner] factories to enhance capabilities and build up multi-category expertise in the same production units to provide more flexibility and the ability to accept any kind of order, regardless of product category.
It is equally important to have meaningful, collaborative conversations with factory management on the overall mindset and change the frame of thinking from “Here’s why we can’t do it” to “Here’s what we need to make it happen.” It’s important to us that all our supply chain partners stay innovative, modernize their machinery and management, and digitize operations to reduce response time, improve efficiency and build in the flexibility needed to support the business.
Which new sourcing regions are you either considering or ramping up today?
As we build up further country-of-production diversification, we feel Africa has the greatest potential upside for the future. There has been a little bit of hesitancy in the market to make this shift, however, the industry has already been established in-region with more investments expected. There is large and open capacity available, a free-trade agreement in place, and lead-times to the East Coast of the United States are comparable to many Asia markets. These conditions provide a massive opportunity to our U.S. partners, especially as capacity is at a premium and costing is continuing to rise in Southeast Asia.
As you’re considering where to source, what are your top considerations today?
Our strategy centers around what we call “end-value sourcing.” For each style or program, what are the key values we are trying to provide or are expected by our clients? Speed, flexibility, costing, capacity and manufacturing expertise are all involved in that end-value equation. For example, a high-fashion item doesn’t require a huge amount of capacity; the primary focus is to get that item in as fast as possible, so speed and expertise are our end values. Alternatively, a core item needs to support the business through profitability and longevity, so our end values center more around costing, capacity and flexibility.
A perfect and universal factory doesn’t exist—if it did, the entire industry would be trying to put all of their business there—but there are many factories that are very good at certain things. Our goal is to best balance those strengths to provide the most value to our clients and meet their business needs.
What keeps you up at night?
As a company that produces for markets around the world, including the U.S., Europe and Asia, the increasing regulation of the industry has become challenging. Not in terms of why the regulations exist, but in terms of staying on top of all the nuances of each regulation, the differences between markets, and all the administrative tasks required to ensure proper data management and provenance. In the last year, we shifted our focus toward digital traceability and gaining supply chain buy-in. We feel it’s our job within the supply chain to lead by example, and our hope is we can encourage and bring our value chain partners along on the journey—everyone from raw material suppliers, to brands and retailers, to third-party authenticators.
What makes you most optimistic?
One positive outcome from Covid has been that the industry reached a point where innovation is mandatory. The last few years have exposed massive stress points for everyone to the level where they can’t be ignored. Consumer expectations and shopping behaviors, regulations and technology have changed—the supply chain needs to change as well. Now is the time to innovate, and many are. Whether it’s new distribution models, new supply chain management systems, social or environmental sourcing strategies, or cross-industry partnerships, the industry seems to have recognized the need for innovation. Retail is evolving for the better, and it’s a very exciting time to be in the business!
What’s in store for Décor Global for the rest of this year and into 2023?
For the past few years, we have been prioritizing and building our ESG strategy. As we look into 2023, we will continue to focus on driving results within those three pillars.
In environmental, we established Scope 1 and 2 science-based emission targets through SBTi in 2022 and are working to map out Scope 3 emission targets in 2023, with a goal to publish them later in the year.
As a signatory and global council member of the Social and Labor Convergence Program (SLCP), we are collaborating with the other stakeholders to improve working conditions in the industry and reduce audit fatigue through standardized audit schemes.
We have worked with Retraced, an innovative traceability platform, to pilot digital traceability for some of our U.S. business. Our goal is to continue expanding this digital traceability capability in 2023 and onwards.