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Apparel manufacturers will tap more local opportunities post COVID-19

Apparel manufacturers will tap more local opportunities post COVID 19In the next 12 months, COVID-19 will overhaul the complete design, development, sourcing and manufacturing of clothes. As Jag Gill, CEO of Sundar, notes in an article in WWD, the pandemic will localize apparel manufacturing with large entities taking over Tier II and III suppliers. The diversity of supplier chain partners of brands and retailers will also change in coming months and years.

Supply chain to be carefully scrutinized

Gill points out another important change will be upstream consolidation by manufacturers which will enable them to become a strategic partner to international retailers and brands. These brands and retailers will de-risk product development with every step of the supply chain under scrutiny — from yarn spinning, weaving to dying to cut and sew. Retailers having liquidity will focus on investing into their core vendors and manufacturers or get into joint-ventures.

Inventory management will move from ‘just-in-time’ to ‘just-in-case.’ Companies with limited product offerings will have a greater control over the supplyApparel manufacturers will tap more local opportunities post COVID chain output. Real-time visibility into the availability of raw materials, finished goods, work in progress, etc. will expose capacity constraints of the Tier I, II and III suppliers.

Focus to shift away from China

Gill argues the pandemic will also accelerate trade tensions between China and the rest of the world. The Japanese government has already announced over $2 billion aid to shift production out of China. Countries like Turkey, Jordan and India may bag larger orders as they carefully transit from post-pandemic to productivity. Investments into stringent employee health monitoring will become imperative as besides maximizing output, companies will also invest in screening their workers’ health.

Another change will come in the form of near-shoring, views McKinsey. New manufacturing hubs will encourage brands to design smaller capsule collections.

Sustainability to be the new way of life

Coronavirus is forcing consumers to adopt a more sustainable way of life. Hence, they will now make their choices based on the values of sustainability and transparency. However, not many apparel manufacturers have the resources to invest in transparent supply chains and responsible sourcing programs in a meaningful way. Hence, retailers and manufacturers will have to reinvent their supply chain as a cheaper, faster, better model driven by innovation and easy to adopt tech and transparency tools.

Fashion with function to rule

The needs of consumers will shift from conspicuous consumption to cautious conservatism as working from home will become new normal and video conferencing replace in-person meetings and business travel.

Fashion with function will rule consumers’ choice of apparel and accessories as they will emphasize on their garment’s ability to protect them not just from disease but also from cold and even from food stains. Consumers will value apparels that are not just durable but never go out of focus. They will look at nonessential apparels only as investment pieces to be worn on specific occasions.