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How can sustainability improve supply chain issues?

By Kristopher Fraser

Jul 1, 2022

Business

Foto: Nappy / Pexels
The fashion industry's supply chain still has yet to recover from COVID-19 lockdowns. Supply chain issues are one of the biggest topics in fashion right now, along with how rising inflation costs will affect retail. Sustainability has the potential to solve some of these ongoing issues.

Sustainability could be the saving grace of supply chain issues

Currently, fashion has more unused goods than ever before. At the PI Apparel conference, an event for product development leaders in retail, Stephanie Benedetto, CEO and co-founder of Queen of Raw, said the fashion industry has over 280 billion dollars of unused fabric and unused finished goods sitting in warehouses and collecting dust that will only live to see the inside of a landfill or burned. Canceled orders, closed stores, and missed seasons and collections have thrown fashion's supply chain out of whack.

All this waste causes the fashion industry financial, environmental, and reputational harm. This waste is not only hurting profits, but it’s also destroying drinking water. Textile production is the number three polluter in the world right now, behind oil and agriculture. If we continue with the current pace of textile production, the World Wildlife Fund estimate by 2025 2/3’s of the entire world’s population will face shortages of fresh water.

Companies looking to rectify their supply chain issues. The longer a company can keep materials, raw materials, and finished goods in a supply chain, the more economically viable it is. The key to this is circularity. Unused stuff has value. It can be sent to another planned department or division for use. If a company isn’t going to reuse something, there is the option to resell it. This adds to a company’s revenue, and then unused goods are no longer taking up valuable warehouse space. If products are proprietary and past their shelf life, there’s also the option to recycle or donate them.

All these ideas can save businesses a ton of money and drive their bottom line. Reselling appears the most popular option among businesses because that immediately adds to their revenue. Companies want to recoup their inventory losses.

Benedetto is also a large advocate for companies buying unused stuff from other companies. “You need what you need when you need it at a discount located where you’re actually producing stuff,” she said. “The COVID-19 pandemic was an opportunity to give businesses the chance to sell more unused stuff than ever. Fortune 500 companies were turning around and buying unused products and deadstock because their supply chains were disrupted, and they needed to fill orders. These companies managed to increase their markups, offered great opportunistic pricing, and improved their speed to market because they weren’t waiting for newly manufactured products.”

These sustainable stories are also great for marketing. Today’s customers are becoming increasingly aware of the environmental impact of fashion, and they shop more consciously. At the end of the day, companies are about saving and making money. If sustainability is bringing in more customers and helping the bottom line, it only makes sense to take a sustainable approach to your supply chain.

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SUSTAINABILITY