Challenges in the Textile and Garment Industry – Improving Visibility and Traceability
Humans need food, shelter, and warmth to survive. Textiles fit into all of these categories and affect our lives in many ways. The warmth that is provided by clothing, has evolved from a basic necessity in day-to-day life into a fashion, an expression of self-identity, and a status symbol. The global textile market size was valued at USD 993.6 billion in 2021 and is anticipated to grow at a compound annual growth rate of 4.0% from 2022 to 2030.
The textile industry has been a significant part of the global economy and will continue to grow in the coming years. The industry is one of the largest contributors to the global GDP, and it also has a major impact on the employment market. In addition, the increasing disposable income of consumers is anticipated to boost the demand for clothing and accessories in several regions over the next few years.
The textile industry is mainly driven by its affordability and availability, along with the huge customer base across the globe. With the surge of fast fashion, we are fully aware that the textile and garment industry is like any other industry, they create environmental impacts. It takes around 7,500 liters of water to make a single pair of jeans, the same amount of water the average person drinks over a period of 7 years. The environmental cost of producing garments is significant, but much of the goods are deposited into a landfill within 12 months. Globally, fashion creates 40 million tons of textile waste annually; with only less than 1% of cotton materials being recycled in 2020 – according to the Ellen MacArthur Foundation.
As we know, the textile and garment industries are widely believed to be the second most polluting industry in the world. These industries also absorb large numbers of the workforce in developing countries. However, safety and ethical work practices have become big concerns. The Rana Plaza factory building incident in Bangladesh – the worst ever industrial incident to hit the garment industry – awoke the world to the poor labor conditions faced by workers in the ready-made garment sector. We don’t want history to repeat itself. Hence, we must make a continuous and conscious effort to create a more sustainable garment industry.
So, how do we contribute to sustainability in the textile industry? The burning question we all have in mind.
First, we must understand the challenges in the textile and garment industry. The textile supply chain generates carbon footprints. The supply chain refers to each step of the fabric manufacturing process, from sourcing raw materials (fiber, yarn) to a finished garment piece sold by a fashion brand; to the final distribution to the customers. The complexity of the process and the difficulty of raw materials to be grown, processed, sewn, finished, and sold in one location – make the supply chain in the textile industry even more difficult to trace.
The increasing importance of ESG (Environmental, Social, and Governance) in all lines of industries have also pushed the need for people to know how textiles are being manufactured. Consumers are now becoming increasingly aware of the environmental impact, and they would like to find out how yarn, fabric, garments, and other textile products are being processed. More and more questions such as how much carbon footprint is produced, the existence of animal cruelty, and whether the workers receive fair pay and a safe working environment are being raised, especially with the era of information technology. The current and upcoming generations are becoming more conscious of ethical consumption, which propels manufacturers to implement all the sustainability checklists. This is why we need more traceability and transparency in the process in the textile industry.
As shown by the common textile supply chain graphic above, we see fabric and garment manufacturers have to go through an overly complicated sourcing process that involves multiple steps and a longer sourcing time.
Most companies in the apparel industry work with a limited number of suppliers. For instance, companies A and B are both in the textile industry. Company A is a small fabric manufacturer in Vietnam, and B is a fashion brand company in the USA. On one hand, company A has difficulty marketing their products to be part of B’s chain supply. On the other, company B usually does not have large choices of suppliers due to these fabric manufacturers’ online presence being largely none to be found, let alone the manufacturers that do not speak English. This leads to the difficulty in sourcing sustainable products for big fashion brand companies.
Even in the digital era, information asymmetry still exists. Sellers have limited knowledge of their potential customers and buyers have limited awareness of local sellers. This negatively affects the efficiency of transactions and causes a lot of loss to both parties that could be avoided if they had more information or better access to it.
In addition, producers are not always able to get as close to their customers as they would like because they cannot control the supply chain. Eliminating middlemen allows production companies and farmers closer contact with consumers, which can lead to higher profits and lower prices for consumers.
So, how can we streamline the textile process?
Digital transformation is needed here. Companies should reevaluate their sourcing strategies and build greater flexibility into their supply chains. Brands or buyers should work with suppliers to scale up nearshoring and make the cross-border supply possible to avoid material supply bottlenecks.
Streamlining the process means producers including farmers and fabric suppliers would get higher remuneration, and consumers would get the finished products at more competitive prices with the elimination of exploitation by middlemen. Consumers can also benefit by getting closer to their favorite companies, which can lead to increased loyalty and sales.
The advent of a pandemic has drastically affected many industries. The textile and garment industry must embrace digital transformation across the B2B and B2C sectors. Digitizing the supply chain streamlines the lengthy sourcing process and also brings out visibility and traceability of the materials. Not only is the production completely digitized to make it more efficient, transparent, mobilized, and cost-effective; but digitizing the sourcing process is also necessary for a sustainable supply chain in the textile and garment industry.
What if there’s a digitized B2B hub where all suppliers and buyers are in one place? Would that be a good solution?
We at Mecurus strive to provide an end-to-end solution by connecting buyers and suppliers on one platform. Mecurus enables buyers to source their needs of fabrics and create anything they like from trusted and verified fabric suppliers with materials visibility and traceability; at the same time, we enable suppliers to expand their market reach.
For a better supply solution, find out more here.