Supply chain optimization strategies

For 30-plus years, enterprise software specialist Eric Linxwiler has kept a hawk eye on the fashion industry’s volatile design cycles and consumer demand. He’s not tracking the latest styles that’s making news on the runways in Paris and Milan. He is creating supply chain optimization strategies to efficiently and cost effectively ship the hottest casual to couture merchandise to retailers and buyers worldwide.

It’s a delicate dance with intricate moves and there is no room for mistakes or delays. But he’s not just focused on apparel and traditional logistics. Linxwiler, senior vice president of retail solutions for Hong Kong -based TradeBeyond, a data-driven software firm that works with top-tier retailers and brands to help them offer goods that are sourced and produced responsibility and sustainably for industries and countries that are tightening global regulations and holding suppliers to higher standards.

Reputations, ESG and Disruptions

Today, corporate reputations are on the line every time a package is sold and opened, he told American Journal of Transportation in an exclusive interview. And with ESG (environmental, social and governance) plus transparency as hot boardroom and news media issues, suppliers and shippers can ill afford any disruption, he said.

But that’s exactly what is happening now. “And you’re going to continue to see disruption” he predicts. “An apparel company supply chain vice president told me ‘we used to talk about supply chain disruption every six months or once a year. Now we talk about it weekly.”

Traditionally, companies in the fashion industries who “want to be on trend have been slow to react when it comes to moving merchandise,” asserts Linxwiler, “However, today they are forced to be comfortable making agile, faster, on-the-fly decisions, thanks to sweeping changes in technology.”

The disruptions we are seeing in shipping—attacks on vessels in the Red Sea and possible port congestion that could rival the chaos experienced during the Covid pandemic—are being joined by a new one, reports the TradeBeyond executive. “Product quality is the current timely supply chain topic. There is a higher vocal demand from consumers that what they are purchasing should be built to last.”

This emphasis, which can quickly impact a product’s reputation in the marketplace, is driven—but not limited to—the buying power and preferences of the Generation Z consumer, he contends. “They are more and more concerned about the environment. They are demanding that what they have is something they can keep or if it is returned and recycled, it will serve that next need better than it served them.” Plus, the environmentally sensitive consumer is far more likely to return merchandise that violates, say, “green” standards in the manufacturing process, he adds.

Linxwiler emphasizes that the current and seemingly ongoing disruption in ocean shipping not only adds to a vessel’s extended transit time, “the increased traffic in shipping lanes has a negative impact on the ocean, pollution and the atmosphere.” And countries and regulators worldwide are paying exceptional attention to these environmental threats, he added.

Egregious social problems beyond workflow management strategies should and are being addressed in the 2024 global supply chain. Linxwiler maintains. At the top of the list is labor trafficking, he said. “Forced labor is a topic that really pulls at my heartstrings, and it just does not get enough attention. Then you have underappreciated and underpaid labor in many parts of the world that is negatively contributing to disrupted workflows.”

Consumer Expectations

Other pressures plaguing and disrupting the supply chain today are the enormous consumer expectations that shipments should be delivered on the doorstep or loading dock the next day, or even the same day they are ordered—at little or preferably no cost to the customer. “Consumers not only want it (the shipment), but they want it now,” stresses Linxwiler. “Producers—and marketers—have no one to blame except themselves.”

As he puts it, “we have enabled and created a way of thinking as a producer—whether it is a consumable or an energy such as oil and gas or simply merchandise---‘you want it? We can get it there and we will do it free.”

Looking ahead, Linxwiler sees the current trend toward immediate delivery relaxing somewhat. More people are saying, he said, “it’s OK if you put all the shipments in one box and deliver it a second or third day.”

TradeBeyond produces a quarterly—going to six times yearly—Retail Sourcing Report—with research and analysis on sourcing and buying decisions. The Q1 issue surveyed supply chain managers and found that 90 percent are moving sharply ahead in “digital operations” in the next three years. Some 46 percent say that artificial intelligence (AI), cognitive computing and cloud operations will be their greatest areas of investment,” Linxwiler said. The same report warned of continuing downturn in global manufacturing through at least the first quarter of 2024 amid slumping demand, especially in Europe.