2024: Fashion industry’s Path to Resilience2024: 

The tumultuous journey of the fashion industry in 2023 has unveiled a landscape fraught with challenges – climate disasters, economic uncertainties, geopolitical unrest, high inflation and tough monetary policies have collectively disrupted the fashion supply chain and subdued customer confidence. The repercussions have been profound – leading to a revaluation of strategies and a clarion call for unified action between manufacturers and brands that has never before, been quite so loud.

The Imperative for Collaboration and Resilient Partnerships

According to the McKinsey Sate of Fashion Report 2024,  the unprecedented upheavals during the last year have certainly underscored the pressing need for greater collaborative efforts. The bullwhip effect evidenced in 2023 magnified significant demand fluctuations which led to reduced production capacities, factory closures and layoffs. However, whilst this potentially necessary adaptive measure might have helped to keep businesses afloat, it also poses a potential challenge in the year ahead as manufacturers will need to potentially scale up quickly to meet a predicted resurge in demand later this year. 

To cope with fluctuating demands better, the McKinsey report suggests that brands could greatly help make their supply chains – especially preferred suppliers – become more resilient to future risk by actively encouraging more transparency and communication, pursuing longer term contracts to improve cashflow and investing in digital technologies to facilitate reciprocal joint demand forecasting practices. In fact, according to another recent McKinsey survey, 70 per cent of chief procurement officers believe that improving demand transparency with suppliers through systems and processes will be a critical component to successfully navigating market turmoil in the future.

I expect there will be increased interest from both retailers and manufacturers alike in aligning new robust technologies that enable real-time demand forecasting and efficient capacity planning processes in the bid to mitigate risk so they can better navigate any potential future disruptions.  

Generative AI – Beyond Creativity

The advent of Generative AI undoubtedly stands as a transformative force poised to revolutionise the industry. Indeed, according to McKinsey’s latest report, it is perhaps not surprising that 73 per cent of its fashion executive survey respondents said that generative AI will be a priority for their businesses in 2024 – especially with regards creative projects, such as product design. Nonetheless, with a myriad of challenges ahead and a greater need for data transparency and data sharing between all fashion players, I expect it won’t be long before we see the widespread adoption of Generative AI across many other operational aspects of the value chain. Its integration will consequently extend beyond design to facilitate greater collaboration and transparency, optimize sustainability drives, facilitate more efficient resource allocation and successfully evidence compliance requirements, in the years to come.

Source: fibre2fashion

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