Putting the Supply Chain Under the Microscope

With demand for transparency on the rise amidst a pandemic that has drastically impacted the fashion supply chain, businesses should begin to look at their supply chain under a microscope. For many years, a majority of fashion labels rely on production from a number of factories in a number of countries. As COVID-19 has made this jumble of a production scheme virtually impossible to sustain, companies will need to rethink the way they’ve integrated their supply chain. Additionally, the current political climate and boom of activism within the fashion industry is putting pressure on companies to be more transparent. Vertical integration and blockchain technology may be the way of the future in solving these issues.

INDITEX-owned brands, famously Zara, is the industry leader in capitalizing on a vertically integrated supply chain. In-house design, production, and distribution allow Zara to produce at a timeline of just 2 weeks from design to retail. The genius in owning all aspects of the supply chain is that there is seamless communication throughout the entire process, as well as a much shorter lead time and lower costs. Though Zara has been under fire for its violation of labor regulations, they’ve capitalized on the idea of owning every step of the process.

Adopting this technique could be a game changer for companies, as they are able to streamline production and meet consumer demand quickly. However, we all know that fast fashion comes at a cost. Just because vertical integration means quick-to-market doesn’t mean it has to be. Ethical companies who implement this strategy and claim to own the entire process through and through must prove their business practices. How can this be done? It’s simple: blockchain technology. Through the use of public digital ledgers, customers will be able to authenticate every level of the supply chain. This will reveal things like where a product is actually produced and manufactured, and will undoubtedly aid in exposing the ravaging online
counterfeit market.

As we enter a phase in society that demands absolute transparency, customers will seek to brands that are forthcoming with their practices and are proud to use decentralized applications like blockchain to authenticate them.