- Lack of item-level visibility will hamper adoption of technologies driving operational efficiency, and impede progress towards sustainability goals
- Supplier collaboration identified as the most needed step towards better visibility, closely followed by investment in RFID tagging, and traceability software
A quarter of fashion U.S. and U.K. retailers have limited or no visibility’ at the item level in factories and distribution center, one that would be helped by using RFID, according to a recently released report from Avery Dennison (AD).
AD’s Boosting Margins – The Power of Enhanced Fashion Supply Chain Visibility, based on a survey of 250 senior fashion retail supply chain leaders in both countries, found that 50 percent surveyed say their company has ‘visibility into most items’, the supply chain is ‘highly problematic with regular disruptions’ for 30 percent of respondents and 22 percent categorize it as ‘efficient and responsive.’
AD officials summarized this indicates many fashion brands are operating in the dark, leaving themselves open to waste, inefficiency, delayed shipping, lost sales, and shrinkage.
“Trying to operate without clear visibility into your supply chain — essentially operating in a supply chain fog — makes it impossible to track the movement of inventory and deploy data analytics to reduce waste,” says Delia Glover, vice president of product, innovation, and solutions development at Avery Dennison.
RFID Solution
As for answers, the survey 65 percent of respondents see value in increasing collaboration that allow both parties to connect to data sharing and visibility in the sourcing and production process. The same amount think investment in better supply chain visibility tech such as RFID tagging would maximize supply chain improvement, rising to 72 percent of vice presidents, the most senior executives questioned.
“Technologies such as RFID for item tracking help companies create a reliable data foundation,” said Glover. “This will be essential for keeping up with fast-changing sustainability regulations and improving efficiency across the board. Right now though, many fashion brands and retailers are finding it tough and costly to deliver the level of transparency that’s becoming increasingly mission-critical.”
Visibility Issues
The level of visibility depending on the size of the company found 61 percent of the smaller companies feel they have full visibility while only 44 percent of larger companies felt they had a complete view. Full visibility was found to be most challenging for medium-sized retailers with only one-in-ten of the $250-$499 million revenue cohort saying they had achieved this. Only six out of the 250 companies surveyed (which were split into six different revenue categories) had ‘no visibility’.
When decision makers were invited to select challenges they face, due to a lack of item-level visibility in their supply chain, 30 percent cited last-minute changes to garment labelling, rising to 42 percent for firms in the $500 million and $999.99 million revenue size bracket.
Transparency Improvement Needed
Other top challenges cited around 25 percent included difficulty identifying supply chain disruptions in real time, reduced agility in diverting orders to alternative suppliers or destinations, and the inability to meet compliance requirements on materials traceability.
For Glover, the report makes clear that improving supply chain transparency and visibility isn’t just about reducing waste or minimizing profit loss.
“It’s also about building stronger relationships with partners and earning the trust of consumers,” she said. By combining innovative hardware, RFID labels, and software….brands can navigate challenges and set themselves up for lasting success.”