Advances in Transparency Technology Could Revolutionize the Apparel Industry

A joint study by Apparel Magazine and ICIX shows that supply chain transparency technology and consumer demand for socially responsible brands could transform apparel manufacturing.

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Driven by consumer demand, apparel manufacturers and retailers are starting to "build in" corporate social responsibility (CSR), compliance and product safety all along their supply chains, according to a new study by Apparel Magazine and ICIX, a cloud-based supply chain risk management company. Still, there is a lot of room for improvement in supply chain transparency, and 70 percent of Apparel survey respondents say their supply chains are only somewhat transparent, mostly not transparent, or have very little visibility. 

"This is an important, wide-ranging benchmark survey of our substantial audience. It looks at supply chain transparency issues and technology in the apparel industry and relates them to corporate social responsibility (CSR), safety and compliance," says Susan Nichols, publisher of Apparel Magazine. "We found some new trends—such as the push to take CSR into account throughout the apparel supply chain—which places a premium on transparency. Also, more than twice as many respondents said CSR is the main driver of their need for transparency (37 percent) than said either quality (17 percent) or legal compliance (14 percent), which shows that CSR is now an important strategic business objective for many in the industry." 

The new, broad-ranging survey of executives; IT professionals; and managers of quality, compliance and corporate social responsibility found that technological advances in supply chain risk management software are making it easier to achieve the transparency necessary to build trust all along supply chains, and ultimately, in the minds of consumers looking for brands that share their values.

 "The technology is now at a point where it's possible to achieve a very high degree of transparency in apparel design, manufacturing and merchandising," says Matt Smith, founder of ICIX. "And because consumers are so well-informed and demanding things like better CSR, compliance with fair labor standards and product safety, the most competitive companies are re-engineering their processes to build these in, just as quality control started to be 'designed in' to a lot of products in the 1980s. That way, consumers can have the confidence they need to spend their money with brands they can trust." 

The study—conducted over a four-week period in late summer of 2017—was based on 174 respondents engaged in many job classifications of the apparel industry. The largest number of respondents (32 percent) consisted of C-level or executive management, with another 13 percent in product development/design management and 7 percent in IT/systems management. Among its important findings are the following:

  • New technology is just starting to change the industry, and still, only 22 percent of respondents say the technology and systems they currently use are "very effective" at achieving the supply chain transparency necessary to power programs in these areas.
  • About a third (32 percent) of CSR and compliance information is still collected manually, with another 29 percent collected and stored in spreadsheets.
  • Apparel companies are starting to internally share CSR, compliance and product safety data among other departments.
  • Almost 60 percent of apparel professionals say fast-fashion trends have made it "much harder" or "somewhat harder" to comply with product safety, CSR and internal directives.

The study is a comprehensive look at the state of global supply chain compliance and CSR. It emphasizes that transparency technology is making it possible to provide buyers and consumers with the visibility they need to have confidence in their brands.