California Apparel News

The COVID-19 pandemic turned the fashion business upside down and is putting supply chains through a giant stress test, said Neil Soni, vice president of business development and strategy for Omnichain, a Los Angeles–headquartered supply-chain company.

“I think that there is a silver lining to this,” Soni said. “It will stress-test your current operations. The hidden inefficiencies within your operations have inevitably and rapidly surfaced.”

With challenges and bottlenecks coming into full view, supply-chain executives will be compelled to fix the business’s logistical problems and brainstorm ways to serve a fashion business that is rapidly changing, Soni and other supply-chain executives said.

Omnichain has been seeking to change supply chains by advocating the adoption of supportive intelligent technology such as distributed ledgers or blockchain. This technology, which includes artificial intelligence, will improve efficiencies and help make locating goods spread across the globe easier, Soni said. Omnichain also unveiled an update of its platform’s user interface, which makes the platform more user friendly, he said.

“No one can predict a pandemic. But AI can rapidly spot unanticipated changes in trends or a disruption in demand flow,” Soni said. “AI can help shift organizational strategies.”

AI and machine learning can help with issues that were building before the pandemic. Tariff wars with China made headlines before the COVID-19 pandemic. Many companies have started looking for places outside of China to make their goods since the U.S.-China trade war started in 2018. Since supply chains are planting flags in more-distant places, supply-chain companies need to build even more sophisticated systems, said Robert Krieger, president of the freight forwarder Krieger Worldwide.

“There has never been a more critical time for a company to take control of its supply chain,” Krieger said. His company recently unveiled a proprietary system that he says offers superior tracking.

“We have built a robust web-based purchase-order-management system that fully integrates with our clients’ enterprise resource-planning systems. It gives importers visibility and control of their global supply chains, even in places as far away as Bangladesh,” Krieger said. He said that his company’s purchase-order management system allows for a wide range of people involved in a venture, from customers to chief financial officers, to track goods.

Logistics companies may be one of the beneficiaries in the anticipated changes for retail. For example, digital retail and e-commerce are forecasted to enjoy more growth in an era during which physical contact is discouraged, Omnichain’s Soni said.

“If organizations are going to develop more e-commerce, they’re going to put more resources in their own logistics,” Soni said. “Organizations may begin asking strategic questions to help them transition, such as how can they procure a fleet to make more deliveries? What will they allocate to fulfill more logistical requirements?”

Supply-chain practices such as drop shipping will see a growth spurt, said Leandrew Robinson, co-founder and chief executive officer of Hingeto, a business-to-business marketplace headquartered in the San Francisco Bay Area. Drop shipping is a supply-chain management system that affords freedom for retailers to forego keeping goods in stock. Instead, a retailer takes an order and transfers order fulfillment to the manufacturer. The brand ships an item to the customer. It will be up to logistics companies to make sure that products are delivered properly.

A heavier reliance on drop shipping could change the way retail is organized. Retailers won’t have to stock as much inventory. “Drop shipping will turn a traditional retailer into a marketplace like Amazon,” Robinson predicted.

Despite the global economy being turned upside down by the pandemic, businesses around the world have continued to use supply chain–influenced initiatives to improve the economy.

The Milan-headquartered company Virgo recently unveiled a platform that uses blockchain and other technologies to help manufacturers certify their goods. Virgo also said that its platform can be integrated with ERP systems to help track an entire lifecycle of a product.