When it comes to the supply chain, it is time to synergize

On the second and final day of the Venice sustainable fashion forum 2024, the focus shifted from sustainability and the environment to the fashion chain's holding capacity. Will Smes in the fashion industry be able to weather a crisis with no signs of recovery, at least until the second half of 2025, when they will face yet another pressing issue: how to finance the investments required for a sustainable transition? The answer is straight.

They will never make it alone, for reasons primarily dimensional. The fashion system will need much more unity, not only between companies upstream and downstream of the chain but also among their associations that have not manifested themselves in Venice, except of course for the organizer of the forum, Smi-Sistema moda Italia. According to Flavio Sciuccati, partner of Teha-The European house Ambrosetti, who organized the forum with Smi and Confindustria Veneto est, the sector needs to be reunited and able to convey its needs and value to the relevant tables.

Furthermore, because the higher up the supply chain, the more margins are compressed, penalizing the investments required to meet European objectives and causing illegal phenomena in districts that have never vanished, the meetings that followed during the two days in Venice demonstrated the need for a more equitable distribution of value. Last but not least, the fashion industry prefers to adhere to the current regulations, beginning with labor laws, and avoid tightening them.

«We are aware that when the crisis is over, very different business models will have been imposed on the market, which interest us as companies and touch us as consumers», Sergio Tamborini, president of Smi, said. Fast fashion companies are the catalyst for the paradigm shift because, as Luca Solca (Bernstein) pointed out in his speech, by offering low prices, they give the public a sense of wealth and provide a reaction to the decline in consumer purchasing power. It is clear that their systems involve externalities such as pollution and the dispersion of microplastics.

The most anticipated speech of the second day was delivered by Peter Pernot-Day, the global head of strategy & corporate affairs for Shein, one of these large corporations. He emphasized how important it is to implement the on-demand model. «With an initial production of only one hundred pieces for each new model, Shein monitors the demand through user feedback and then decides whether to increase the run», said the manager.

Since the current numbers are all on the side of realities like Shein, Primark, Inditex, or H&M, Smi and its president made a targeted decision to include a similar giant in a summit devoted to sustainability and good practices. That cannot be ignored. While these low-cost fashion groups grow, Solca noted that the luxury industry will require more time to recover from the crisis: «The market is betting on the fact that the worst is over, and I expect a recovery in the second part of 2025». From this point on, we must ascertain the number of "victims" that will be on the supply chain's ground. According to Pattern's ceo, Luca Sburlati, the production will be more fragmented and smaller, it will begin to operate just in time, replacing storage, and the businesses will need to reorganize. It will be a very complicated passage, according to the vice president and delegate to the sustainability of Smi, Andrea Crespi, who has highlighted that: «Since volumes generate efficiency, without volume there is no industry. Manufacturing revolutions are costly and do not happen overnight».

However, positive case studies from the management of upstream processes, like those of Prada group, have surfaced. These are explained by sustainability director Chiara Morelli and are based in part on internalization and in part on the consolidated relationship with suppliers, like Diesel, which spoke with sustainability ambassador Andrea Rosso about how one of the label's top priorities is to gradually reduce the gap between the supply chain and the brand. Lastly, partnerships like the one that Tod's group started with Gruppo Mastrotto, a leader tanning company, to rethink the supply model and increase sustainable performance can be applied to shoe components with smaller suppliers, starting with skins. Examples that demonstrate that comparing actors rather than using procedures that are imposed from above is the proper method of achieving goals. (all rights reserved)