Supply chain disruption major impact of COVID-19: US study

06 Aug '20

2 min read

Pic: Shutterstock

COVID-19 disruptions in sourcing and the uncertainty the industry is facing weighed on respondents in the seventh annual Fashion Industry Benchmarking Study released by the United States Fashion Industry Association (USFIA) recently. All respondents reported supply chain disruption as the most significant impact of COVID-19 on their business operations.

These disruptions are not concentrated in one area of the supply chain. Many respondents saw disruptions with garment factories that make their products struggling with a labor shortage, contracted garment factories short of textile raw materials or facing a substantial cost increase in shipping and logistics, and barriers to conducting regular factory audits because of COVID-19, USFIA said in a press release.

Sourcing executives show the lowest level of confidence in the five-year outlook since the inception of this report.

A year ago, 64 per cent of survey respondents were ‘optimistic’ or ‘somewhat optimistic’ about the outlook for the next five years. This year, that number dropped to 57 per cent. And almost a third of the respondents said they are ‘somewhat pessimistic’ or ‘pessimistic’.

Despite all the COVID-19 related disruptions, sourcing executives are continuing the trend seen in past years. As production moves out of China, the main beneficiaries are Asian suppliers. This year there is some evidence that reshoring for Made-in-USA production may increase in the next two years.

All respondents represented companies with headquarters or major management offices in the United States.

Fibre2Fashion News Desk (DS)

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