How do you approach the issue of sourcing, which key concepts do you refer to?
“My approach to the supply chain is not traditional and linear, but circular. I do not believe that customers, or rather final consumers, are only the arrival point of any production process, but that they are also the inspiration for it. Consumers do not just influence the last part of the sourcing process, but also every other single aspect, just as every part of the process affects the entire value chain”.
How can consumers affect the supply chain?
“With their expectations and their wishes. Today, customers are used to comparing themselves with others before making their purchases, ordering a product from their smartphone and expecting fast deliveries in one day. We no longer live in a society willing to schedule ones purchases and wait 2-4 weeks before finding or receiving products. We live in the age of ‘I want it or I need it now’. This affects or should inform production and the supply chain”.
What impact do these concepts have on the industry?
“Over the years, industry, manufacturing and the entire supply chain have been structured in such a way to create a production focused on the idea of producing on a massive scale what they thought consumers wanted. Consumers, therefore, did not necessarily buy what they wanted, but what the companies had foreseen they wanted.
Today, we need to find the courage to really listen to consumers, understand what and how they want to buy and, at that point, structure the entire system so that they can satisfy and meet their needs. I will never stop emphasizing the fact that consumers of today are different from those in the past and, consequently, our way of producing cannot be the same as in the past”.
Where do these considerations lead to?
“Probably to a more intensive and systematic use of those innovations related to the promotion of automation. Automating the production processes will not just allow to speed up the same processes, but also bring production sites closer to sales markets, and therefore speed up deliveries. In fact, it will be possible to gradually give up producing in distant countries that still allow access to low-cost labor, since labor will be increasingly less needed.
The question to ask right now is: can current automation technologies actually be applied to fashion or in particular to the footwear world? That is to say: are they constructively applicable to products which are very different from technological ones, such as a car or a smartphone, to which they have been successfully associated until now? Do the hypothetical smart factories really work to allow a revolutionary leap in the supply chain? Because, despite the fact that the level of technological innovation in the footwear sector is already very high, it may not yet be able to manage personalized orders and allow deliveries from one day to another. We are on the right track, but we are not at the finish line yet.
Also, because it is necessary to consider how the sustainability issue should be related to this theme, which intertwines Sourcing and Innovation. This implies further reflections to be put on the table to understand if and when we will really be able to witness an on-demand supply chain that conquers the market and is also sustainable”.
What other trends are shaking the world of supply?
“Another trend that I see concerns the levelling of relationships between Brands and Manufacturers. Until recently, brands easily commanded their supply chain, which produced exactly what and, in the timeline, they asked for. The upstream sector was aware that without the brands it would have no market outlets.
In some cases, the situation is changing today. Some manufacturers have started to launch their own brands and compete directly on the brand level, thanks to the opportunities opened up by the network and e-commerce.
This involves a revision of the power relations and many brands will have to carefully choose their partners and establish closer and ‘equal’ relationships with them.
A close relationship that will ever more be important also in terms of sustainability given that products will increasingly have to fulfill certain requirements along the entire supply chain”.
Has the pandemic given rise to new issues that the world of sourcing will have to consider?
“One of the most current issues that are impacting the fashion sector is the one related to logistics and containers. When the world stopped a year ago, we witnessed on one side the impossibility of accessing many raw materials necessary for production so as to not be able to respond to market demand and, on the other, a drop in demand that did not absorb the goods of already existing productions. The paradox has produced a situation such as to deeply unbalance the international logistic equilibrium, causing a remarkable escalation in transport costs.
Today it is difficult to solve the situation of ships and containers allocated in a non-functional way with respect to the needs of international trade, and which is paralyzing the market and with skyrocketing transport costs. A situation that must make us reflect on the profound interdependence that exists between countries such as the USA and China, despite being, in recent years, always on the verge of an escalation of the new commercial Cold War.
And precisely the trade war put in place by the past US administration, which could lead to a further slowdown, if not a blockade, must lead us to reflect even more deeply on current business models, their validity and the risks they hide.
As companies have had to make changes to face the pandemic, they must get ready to change in order to deal also with this trade conflict. The flexibility experienced during the pandemic should not completely disappear from the business models of companies because it represents an added value that could be positively applied to various situations, even those that we are not yet able to imagine”.
WHO IS Ellen Schmidt-Devlin
Personally mentored by Bill Bowerman, Dr. Schmidt-Devlin worked for 27 years at Nike. Upon receiving her degree at the Oregon Executive MBA, Schmidt-Devlin co-founded the University of Oregon Sports Product Management (UO SPM) program, the world’s first master’s degree program in this field. She has since gone on to receive her PhD in Designing Sustainable Systems from Case Western Reserve University.