Preparing for the Next Disruption LA U R E N PA R K E R
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he effects of the Covid-19 pandemic had major repercussions across fashion supply chains, retail operations and consumer behavior. Even as the industry still attempts to get back on its feet, it’s time to assess the lessons learned and start mapping out a strategy for the next crisis—no matter where it comes from. Here, industry experts from the American Apparel & Footwear Association and Bain & Company look back—and ahead—to provide actionable advice on how fashion can insulate against the next shock.
WHAT WE LEARNED… STEVE LAMAR, PRESIDENT AND CEO, AMERICAN APPAREL & FOOTWEAR ASSOCIATION (AAFA) At the AAFA Executive Summit in March 2021, Li & Fung’s Spencer Fung noted that the Chinese word for crisis has two roots— one for danger and one for opportunity. The pandemic required two simultaneous, and interlocking, responses—protecting your enterprise against that danger and identifying and seizing the accompanying opportunity. AAFA members were able to survive, and indeed thrive, during the crisis by doing the following: Be strategically tactical: Much has been written about the importance of flexible sup-
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ply chains and the resiliency of the industry. Whether it involved the pivot to production and distribution of life-saving PPE items or management of endless and massive inventory challenges, agility has been key. Even as we near the exit from the pandemic, it is entirely unclear what the new normal will look like. Companies like to identify and settle into long-term strategies, but 2021, so far, is not the year to do that. (Over)communicate often: Coupled with nimbleness has been the need to frequently communicate with your supply chain partners, your employees, your consumers and your stakeholders. The unprecedented nature of this novel virus, and the lack of a coordinated response to it, meant that reliable, fact-based and actionable information has been in high demand for much of the year. Early, constant and clear partner communication helped solve other problems, such as integration of new technologies, facilitating payments, making timely shipments and addressing remote compliance concerns. Pick your partners well: A lesson learned simultaneously through Covid-19 supply chain breakdowns and the forced labor crisis in Xinjiang is the importance of transparency and traceability. Like picking our pandemic cohorts carefully, we need to be especially vigilant to know who our supply chain partners are, and who they’ve been doing business with. This becomes increasingly important as supply chains go through some
