The article is available HERE (need Just-Style subscription)
Key findings
First, more US apparel companies prioritize consolidating their existing sourcing base than diversification during the pandemic. Nearly half of the top 30 US apparel companies we examined explicitly say they either sourced from fewer countries or worked with fewer vendors in 2020 than 2017-2019 before the pandemic. In comparison, only about one-third of respondents say they were sourcing from more countries in 2020 than two years.
Second, the desire to form a closer relationship with key vendors and ensure social and environmental compliance are the two primary factors behind US apparel companies’ consolidation strategy. In a time of uncertainty like the pandemic, apparel companies are leaning more heavily on suppliers that have proven reliable, capable, and flexible. Working closely with the suppliers and building an efficient and trust-based supply chain also play a central role in US fashion companies’ COVID-mitigation strategies. Meanwhile, with social and environmental compliance becoming increasingly crucial in apparel sourcing today, companies are cutting ties with vendors that are not adhering to government mandates and proprietary codes of conduct. Notably, US apparel companies’ higher expectations for sustainability as well as social and environmental compliance may have resulted in a smaller pool of qualified suppliers.
Third, the desire to steer away from China and reduce sourcing risks are the two main drivers behind US fashion companies’ recent sourcing diversification strategy. US apparel companies mostly moved their sourcing orders from China to China’s competitors in Asia instead of expanding “near-sourcing. On the other hand, it is not uncommon to see US apparel companies keep a relatively diverse sourcing base to control various sourcing risks in the current business setting.
Fourth, the content analysis further reveals that US fashion brands and retailers commit to sourcing and supply chain innovation in response to COVID-19 and the new business environment. Some specific sourcing strategies are noteworthy:
- Work with “super vendors,” i.e., vertically integrated suppliers that can execute multiple steps in the supply chain or those with production facilities in numerous countries.
- Optimize supply chain process to improve speed to market.
- Adjust fabric and textile raw material sourcing base, although the specific strategies vary from company to company.
By Emma Davis and Dr. Sheng Lu
FASH455 Global Apparel & Textile Trade and Sourcing 
COVID-19 has forced the apparel retailers to restructure their sourcing methods. From the beginning of last year, a major exporter for the US was China, Vietnam, and Bangladesh. China was the first to shut down their factories due to the lockdown which hurt many retail businesses. China’s garment production was down 7.7% from the previous year, totaling 22.3B pieces in 2020. China has remained a leader in sourcing apparel due to low cost and high productivity rates. Although, due to the pandemic, I think many retailers realized the importance of diversifying if this ever happened again. It’s harder said than done, it’s a highly competitive market but to keep the supply chain going, I think it would be smart to look into other countries factories.
Here’s another helpful article about COVID’s impact on sourcing written by Dr. Lu:
https://www.just-style.com/features/sourcings-new-order-covids-impact-on-worlds-top-three-apparel-exporters/
I believe that for a while, the sourcing strategies of the US will take a more conservative route. When the pandemic hit, nobody saw it coming, so the US was not thinking about the consequences of having a un-consolidated sourcing strategy. Once seeing how this strategy created difficulties when sourcing during the pandemic, companies took a step back and thought about how to ensure more preparedness if difficulties like this arose again. Having a close relationship with key vendors is a great way to get peace of mind since they will be working so closely together, taking out some of the uncertainty.
you made an interesting point, but why do you think having a close relationship with the vendors will ” taking out some of the uncertainty.”? what kind of uncertainty do you refer to?
The points made in this article are very beneficial to be able to understand how industries such as the apparel or textile industry reacts when faced with tragedy and uncertainty. United States apparel companies were smart in the way they controlled their sourcing strategies. The United States consolidated their existing sourcing base in order to ensure that they can rely on suppliers that are capable, flexible, and trustworthy. This is a very smart move on behalf of the United States and this tactic should be kept in mind moving forward. The future is filled with uncertainty so by forming reliable relationships and having sourcing bases to rely on, this removes many impactful sourcing risks and allows for apparel companies to be able to survive during a worldwide event.
The US shifting their T&A sourcing by reshoring has been a common thread since COVID-19. The article makes a great point that part of the shift is to ensure factory and supply chain compliance. It is easier for a brand to watch over if the factories are closer. Not only that but the sustainability aspect that has been growing in the fashion industry is also important to be able to source from. I see this as the future because of the unstable environment that is the supply chain right now, brands need to know that they have vendors that they can trust and that can them their products on time.
At first, you mentioned about the growing importance of ensuring compliance in sourcing during the covid. Then, at the end, you said about “product being on time.” Why are these two aspects related? Overall, how do you see fashion companies’ sourcing strategies shifting? Anything can be connected with what we learned in the lecture videos?
After the outbreak of the epidemic, the United States is committed to developing and consolidating its textile manufacturing industry. The United States says it will reduce imports of apparel products from China. With the maturation of textile manufacturing, the employment rate of textile manufacturing in the United States is declining year by year. The COVID-19 outbreak caused more people to lose their jobs, so the outbreak helped the United States develop its own textile industry at a faster pace. Many American companies that need to import apparel are also appropriately optimizing their own industrial chain, looking for suitable suppliers.
COVID-19 has proven the necessity for reliable and trustworthy sources. In an effort to gain just that the U.S. has created close relationships with key vendors. This creates a more secure business environment because the U.S. is then more easily able to track down orders and have the confidence knowing they are doing business with a trustworthy partner.