GT Nexus is more than just a cloud-based platform. It is a community of manufacturers, retailers, logistics service providers, carriers, trading partners, and banks who are integrated to and operating on GT Nexus to improve the pace and ease and flexibility of doing business globally. Kurt Cavano, president, GT Nexus converses about the political changes and instant customer gratification influencing the global supply chain dynamics.
What impact will Brexit have on apparel and textile supply chain systems?
The immediate impact of Brexit was in the financial markets where the British pound dropped to its lowest level against the US dollar in decades. The repercussions on the supply chain are only beginning to be felt by global apparel brands and their suppliers. Socio-economic or geo-political changes can have just as much impact on supply chains as a natural disaster or unforeseen disruption. The common denominator is the unknown. Supply chain strategy is now very much based on unknowns rather than certainties. How supply chains react to such disruptors comes down to how nimble and flexible the supply chain executes, and how the network has been built to operate. No supply chain can prepare for every possible disruptor, but how quickly the supply chain adjusts and adapts will separate which supply chains struggle to survive and which actually thrive in moments of chaos.
Which three major political shifts do you think will influence trade and supply chain systems in the next two years?
In addition to Brexit, we are seeing a shift away from free trade and an increasing sentiment around protectionism. In the US presidential election, for example, both major candidates appear to lean away from free trade. Tariffs and red tape can have a significant impact on trade and supply chains. In fact, we recently surveyed 250 US retail executives and 46 per cent expect to be impacted by tariffs and protectionist measures derived from the two presidential candidates' trade positions. And 68 per cent said they lack supply chain flexibility to adapt to in-coming risk.
Which countries do you think have begun sourcing strategically and shunning the old school procurement process within the apparel and textile industry?
Despite some of the stereotypes surrounding the apparel and textile industry, in some ways this industry is on the leading edge of innovation. Companies like Puma and Levi Strauss use their sourcing strategies to support greater missions around sustainability, environmental preservation, and workforce development. This is occurring in sourcing hubs around the globe, from Southeast Asia to Central and South America.
Is 'mass-customization' really possible? What are your thoughts on it? Any brands or retailers already addressing this trend?
Mass customization is very real. As a consumer I'm accustomed to getting exactly what I want, where, when and how I want it. Brands and manufacturers today must be able to support this demand. Companies like Adidas are doing this well, allowing consumers to design custom sneakers online. The orders and specifications are fed to factories, and the same factory lines that mass produce sneakers are producing custom shoes. They are packed and shipped to the consumer direct from the factory, within five or six weeks.
Who are your major clients within the apparel and textile industry?
We work with hundreds of apparel brands and retailers, and thousands of suppliers and manufacturers. That includes Levi Strauss, Ralph Lauren and Columbia Sportswear on the brand side, and names like TAL, MAS and Brandix on the manufacturing side.
Where do you see deployment of cloud platforms for physical and financial supply chain management growing? What is fuelling the growth in these markets?
Demand for cloud supply chain solutions is being driven by two questions asked every day in global commerce: Where's my stuff? Where's my money? Brands want visibility into the movement of goods and inventory. Suppliers want to know when they will be paid and they want visibility into the process so they can plan and run their business. Cloud networks deliver visibility into both the physical and financial supply chains.
With many apparel brands and retailers providing facilities of buying right off the runway and try-and-buy features, what kind of supply chain systems do they need to support and execute this?
Brands and retailers are evolving to offer new services and experiences to consumers. This requires an agile, flexible supply chain on the back-end to support these initiatives. There are so many more seasons, so much demand for customization, and new pressures from disruptors like amazon, that apparel supply chains have to be forward thinking. You have to transform and have a digital transformation strategy.
What are the new innovations and solutions trending at GT Nexus?
We're working on some cool projects around the Internet of Things, or IoT, that extend our network capabilities to capture deeper and more granular data from things like sensors. And of course there are deeper analytics that become prescriptive in nature to help optimize supply chain execution. With the acquisition by Infor we received a huge boost in R&D from their Dynamic Science labs.
How would you describe the physical and financial supply chain scene is geographies like China, Vietnam, Bangladesh, Sri Lanka, and India?
Global supply chains in these regions are typically under-financed. Many of these suppliers are limited in access to capital. They get squeezed on long payment terms and they pay high capital costs locally. We've eliminated this pain for thousands of companies over the last 15 years and we've reached a point where we're delivering capital at the PO or even earlier. But you'd be surprised at how many supply chains are still starved for capital because they haven't evolved or transformed the way they operate and transact.
Published on: 25/10/2016
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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