Q&A with Peter Warner: The Future of Apparel Sourcing and Manufacturing

August 18, 2020

In our recent webinar on August 4th, we heard from industry experts about the conditions facing the fashion industry due to Covid-19. We brought together Vivek Ramachandran, CEO of Serai, Peter Warner, Global Sourcing (Ex-Nike, Gap, Kohl's) and Advisor at Allbirds and Stanley Szeto, Executive Chairman at Lever Style. To watch the full webinar and read the event summary, check out our blog post here!

Following the webinar, we interviewed Peter Warner to answer some of your burning questions we couldn’t get to during the event:

Q: How long do you think it will take for designers/ brands to manufacture at the capacity they were before the pandemic?

Answer: That’s a great question. A lot of people have been wondering that as it’s been several months now. Many brands and retailers reacted so quickly and so severely that it had such a negative effect on the supply chain that we’re actually seeing an overcorrection in some cases. I’m already starting to hear from manufacturers in some of the locations where a lot of the sourcing is done, especially in China, Vietnam and places like that, that some of the better factories are starting to get orders again.

People are still going to be cautious as they go into the last quarter of 2020, but as we get into 2021 people are going to start to look at what the end of the year looks like. Typically in the apparel industry you’re working about a year out, every product is a little different. We’re looking at August/September production right now, so a lot of this will get better as people become more confident.

A lot of it plays into how we get the virus, the vaccines and the treatments under control. If that goes well, which it looks like it may in the first part of the year, then you may see people being more aggressive with their purchases and getting their designers and their brands to start planning for the future.

Q: How can we create a balance between a 'price war' and payment guarantee?

Answer: That’s another great question. It’s a dilemma, especially given what we went through in the pandemic and how brands and retailers had to react to their businesses and try to correct things. Certainly, everyone is going to try and guarantee things through price. I’m of the theory that you can’t do that. We’re going to get to a point of supply and demand and there is going to be a lot of extra capacity out there in the next 12 months, which we were talking about in the prior question.

A lot of it comes down to trust and whether or not brands and the factories that they are working with trust each other.

Pricing, from what I have seen and what I have witnessed from some of the clients I am working with, is very fair. If people see that it’s a good order they will step up. But payment terms and all those things need to be negotiated as well.

The pain inflicted on the supply chain was unjust and swift. And it may take a while for trust to come back in where a rhythm of old systems, terms and relationships worked. New cost and payment mechanisms will be needed and possibly be created.

Q: In regard to digital merchandising, how do you see the in-house exports houses in Asia connecting to European designers when travelling is not an option?

Answer: This is the thing that was so unforeseen. There are some amazing tools out there, the digital tools, the PLM tools, the various forms of Art and CAD work. There are some really solid software systems out there that people were using where you had a system where people could see each other, travel, converse and trade information.

What’s blown up from the pandemic is the ability to actually see those individuals and pass the information in a very cohesive way.

I think that’s going to be a bit choppy for a while. As I mentioned in the webinar, there are a lot of smart people within these software companies looking at the way they do things and at how their software is used. It needs to become much more of an open style of sharing information. So we may have to see that and that may take some time to do.

There is going to have to be a pivot in the way digital tools are used, but also the pandemic is going to force designers and merchants and the people they work with in the supply chain to trust these things a lot more and then ask each other which ones are the best ones to use.

I’m encouraged by this, it’s actually going to propel the industry towards a future, which is needed, which is really the industry 4.0 that a lot of people have been talking about.

Q: What digital tools do you expect will help manufacturers streamline their businesses in the months and years to come?

Answer: I think the digital tools now are going to be ones that manufacturers have more of a say in. Prior to this, I was guilty of being the one pushing the factories to use digital tools that were a benefit to me as a buyer and a person looking for sourcing. Now it has become a two-way street.

It needs to be a shared system of digital tools that allows communication, trade, and decision-making to happen in a very cohesive way.

I think manufacturers need to be able to step up and say this is working or this isn’t working.

I mentioned this at the webinar, you’re going to find like-for-like brands and manufacturers finding each other and realising that if they use the same systems and they share honest feedback on how to use these tools in the right way it’s going to make their business come back a lot faster.

There is a lot of work to be done on these digital tools, but I’m encouraged by what is there and if the right thinking is happening, then I think we’ll see the evolution happen pretty quickly.

Q: Any specific types?

Answer: 3D modelling, 3D design, anything that can mitigate the sampling process or allow innovation and newness - trend and colour and things like that that are essential to the fashion industry.

I still think it comes down to making something physical that people can see and touch, but if you can cross over those hurdles and get to those decisions faster through digital tools, I’m all for it.

We are going to witness a period for the next few years where travel is going to be a little reluctant and people are not going to jump on a plane. People coming back from very tough times at a retail level are going to have budgets that are limited. So everybody is going to have to work smarter and through these digital tools, that is a big possibility.

It will also flow to other areas, not just in the design side of things. People need to remember that designing and developing something is only one step of the whole cycle. Then you’re commercialising it, producing it, producing it in bulk, then you’re shipping it. There are all kinds of things with quality, testing, with being able to see things, and to add programmes or do additional developments. It’s going to spill out to other aspects of the operations side of the business. It isn’t as sexy, but still an important part of the cycle.

Q: What do you think about the future of Quality Management? Will it remain mostly manual like it was pre-COVID, or can we expect it to become largely digitised?

Answer: I think it’s going to become largely digitised.

It’s been too manual for too long, and there has been a lot of mistrust in it.

The pressure on manufacturers and suppliers and facilities to ensure that things are done the right way is all very valid. And the industry has had its problems. But the digital aspects of this and being able to see something that’s in a cloud-based system, that’s digital, that you can have trust in, is very much a possibility.

If Tesla can do it with their cars, and airlines can do it with their planes, why not us in the industry? I said this in the webinar, I personally do not think that the apparel industry is going to migrate dramatically from one country or region to another. The infrastructure and the needs behind the industry will require it to stay where it is for the most part. Obviously there is going to be some trade issues and some things that impact that. So the ability to manage quality, to see things, to monitor things, is going to be essential. Once people put up the right thinking behind it, then managing quality, managing work in progress, and having trust that things are done right is very doable.

There are several software companies and organisations that are in the midst of doing those things, so Serai can be a big help in exposing those to the industry from a greater good standpoint.