Industry Leaders
Four Questions to Han Bekke: “Technology is great, but…
“Technology is great, but…it is only through the actions of the people in our industry that we can put it to use,” stated Han Bekke in an interview with Needle’s Eye Senior International Correspondent Yvonne Heinen-Foudeh to address burning questions for the global apparel sector.
The reigning IAF (International Apparel Federation) president—who did not hesitate for a second to get together for the virtual talk (although he was on a private trip to Italy)—commented on his position from Rome, the Eternal City.
Yvonne Heinen-Foudeh (YH-F): We live in a period of uncertainties – the consumer market has been shaken like never before and the global supply chain has never seemed so unstable. From your perspective, what share of the fashion industry’s current challenges originated with the pandemic, and what percentage were pre-existing problems that the industry now had to confront quickly?
Han Bekke (HB): Difficult to put this in percentages, but for me, it is clear that Covid-19 caused an unprecedented crisis and that still has a great impact on our economy and society. Also, our textile-apparel supply chain was highly affected and is slightly recovering since the pandemic is still not beaten with new variations like the Delta. Health and safety are rightly top priorities, but on the other hand, the economy should come back to life.
My other observation is that before Covid-19 our sector was already suffering, hardly healed from the earlier financial crisis from 2008 onwards. It was already clear that our supply chain needed a re-set, something that is now accelerated by the crisis we are trying to get out of. In my view, the buyer-supplier relationship should be re-balanced. We should create a ‘pull’ market rather than keeping the ‘push’ market we are in now with heavy pressure on prices. We should investigate changes in the ordered rhythm, re-consider our sourcing strategies, consider how smart factories could improve productivity and cost-competitiveness, develop an omnichannel distribution plan including e-commerce based on data and finally increase our contribution to a cleaner and more sustainable planet. Speed to market is key but it should go along with shared risk and value among players in the supply chain. On our way to achieve all this, we need better collaboration in our supply chain, more than ever.
YH-F: The guiding principle of ecological, economic, and social sustainability increasingly determines policy – nationally, certainly at the EU level with the “Green Deal” in place and globally. Necessary developments that also and above all affect apparel. The processes of adapting entrepreneurial action to the needs of the planet—of the people who produce fashion and of those who consume it—are complex and demanding. Transparency, traceability, and cooperation along the global supply chain are key demands and require the implementation of effective technology tools on the way to sustainable development. In this most demanding scenario, where does IAF see its roles and tasks now and in the future?
HB: For many years IAF has persuaded its membership of national apparel and textile organizations to inform their member companies of the growing pressure on our supply chain to become more sustainable and less polluting. Pressure comes from Non-Governmental Organizations’ (NGOs’) public opinions, but recently also from governments preparing and implementing laws i.e., on traceability and circularity and/or combining both with trade arrangements.
Transparency has become a huge issue. Tier 1 suppliers will face pressure, but also are presented with opportunities, to play an important role in acquiring more transparency upstream for their clients. Alongside the physical and financial stream in the supply chain, the data stream will be key.
The industry must accelerate its efforts to increase the transparency of its supply chains. There must be an extensive and trustworthy back and forth flow of information alongside the flows of physical goods and money. IAF will focus its efforts on strengthening the collaboration on a global level between the apparel and textiles industries and bringing best practices together.
The essence of the greening of the industry is a supply chain-wide, collaborative approach. Pledges to reduce CO2 emissions are important but not sufficient. The costs and the rewards of transformation need to be shared better in the supply chain. IAF will focus on bringing the manufacturers’ voices more clearly into the global industrial infrastructure that is being built to reduce apparel’s global environmental footprint.
I have noticed that consumers more and more want to know how clothing products are made, where and under what circumstances. At the same time, they are becoming more conscious of the climate effects of clothing production in their buying pattern. From fast fashion to slow fashion. They move to more expensive, higher quality products with a longer lifecycle and/or to second-hand clothing. On the other side of the spectrum, we still see consumers buying more and more on the internet where speed to market is key. I want it and I want it now!
In both cases, I believe producing closer to the market could be beneficial to our sustainability performance. The trend of re-shoring or near-shoring will gather speed.
YH-F: The transition that is now imminent requires skillful change-management, agile leadership, the ability to excite teams about new techniques, and to recruit employees with the required capabilities. In-depth knowledge of the technological possibilities—yet another demand from augmented reality for a completely new ordering and shopping experience—the digital twin is an essential module for intelligent manufacturing, further applications of artificial intelligence, data-based algorithms with predictive models, deep learning, and human-machine interfaces in the sense of Industry 4.0. Where can the journey for companies, for their customers, go in the long term? Do you expect completely new players to increasingly enter the global fashion business? Are the classic apparel companies up to all this?
HB: The apparel industry has been caught for years in a downward spiral of price pressure. A transition, bold changes, are needed to break out of this spiral. Continuous downward spirals of price are indeed a dead end, just adding to overstock, environmental degradation, and pressure on our people. It’s now about reducing the high costs of the industry’s low-cost addiction by investing in more effective supply chains that reduce uncertainty, produce what people want, and don’t produce what people don’t want.
I believe that the digitalization of the industry is a great opportunity for the industry. This is not just because it enables speed and flexibility, its implementation also enforces required process change, within brands, retailers, apparel, and textile manufacturers, and certainly among these supply chain partners. For example, in a digitized design and development process, suppliers, even second and third-tier suppliers can be involved from the outset, improving flexibility. But this requires drastic changes to the traditional design and development process. And it requires much more collaborative, less adversarial supply chain relations. The rewards of the digitalization of the industry are great and cannot be seen in isolation from the tough but powerful process changes that need to be made.
Transition is enabled by the available technology and pushed by the Covid-19 crisis. Transition requires full industry collaboration. Retail is involved, but I believe they are more and more the key to a successful transition that can be found upstream in our industry, with garment manufacturers and fabric suppliers. Technology is great, but it is only through the actions of the people in our industry that we can put it to use. The large players must make major steps, but part of the secret behind the change lies with the countless number of smaller companies.
The restructuring will be hard, but at the same time, it is what will make the coming years so important. IAF is proud to be able to contribute, in our own way through our convening power, our global voice, and our projects, to this restructuring. Past the shuttered stores we can now clearly see the first promising signs of a stronger, smarter, and more sustainable industry, more driven by digitization and data, respectful of core skills and new skills, and with a more collaborative and fair supply chain relations.
Yes, this all could lead to new players in the field. I am very optimistic about what the different fashion and textile universities around the world deliver: a new young generation with a refreshing view on new business models, sustainability, and circular design. They create in some cases start-ups which we should embrace as inspiration for a new view on our supply chain.
YH-F: Would you like to state any additional comments?
HB: I am particularly worried about the fact that in the short term our supply chain is lacking liquidity. But this should never lead to one-sided cancellation of orders and one-sided changes in payment conditions from 30 to 60 or from 60 to 90 even 120 days. IAF, from the beginning of the Covid crisis, has taken a firm stand on this and has via the press send out an appeal to companies in our supply chain to show solidarity and to cooperate, rather than putting the problems on the table elsewhere upstream or downstream.
This attitude, despite all kinds of sustainability pacts and agendas that have been or will be signed by companies, is linked to the focus on where I can produce the cheapest. This, in my view, is a dead end. It is time for a change! –NE–
HB: The apparel industry has been caught for years in a downward spiral of price pressure. A transition, bold changes, are needed to break out of this spiral. Continuous downward spirals of price are indeed a dead end, just adding to overstock, environmental degradation, and pressure on our people. It’s now about reducing the high costs of the industry’s low-cost addiction by investing in more effective supply chains that reduce uncertainty, produce what people want, and don’t produce what people don’t want.
I believe that the digitalization of the industry is a great opportunity for the industry. This is not just because it enables speed and flexibility, its implementation also enforces required process change, within brands, retailers, apparel, and textile manufacturers, and certainly among these supply chain partners. For example, in a digitized design and development process, suppliers, even second and third-tier suppliers can be involved from the outset, improving flexibility. But this requires drastic changes to the traditional design and development process. And it requires much more collaborative, less adversarial supply chain relations. The rewards of the digitalization of the industry are great and cannot be seen in isolation from the tough but powerful process changes that need to be made.
Transition is enabled by the available technology and pushed by the Covid-19 crisis. Transition requires full industry collaboration. Retail is involved, but I believe they are more and more the key to a successful transition that can be found upstream in our industry, with garment manufacturers and fabric suppliers. Technology is great, but it is only through the actions of the people in our industry that we can put it to use. The large players must make major steps, but part of the secret behind the change lies with the countless number of smaller companies.
The restructuring will be hard, but at the same time, it is what will make the coming years so important. IAF is proud to be able to contribute, in our own way through our convening power, our global voice, and our projects, to this restructuring. Past the shuttered stores we can now clearly see the first promising signs of a stronger, smarter, and more sustainable industry, more driven by digitization and data, respectful of core skills and new skills, and with a more collaborative and fair supply chain relations.
Yes, this all could lead to new players in the field. I am very optimistic about what the different fashion and textile universities around the world deliver: a new young generation with a refreshing view on new business models, sustainability, and circular design. They create in some cases start-ups which we should embrace as inspiration for a new view on our supply chain.
YH-F: Would you like to state any additional comments?
HB: I am particularly worried about the fact that in the short term our supply chain is lacking liquidity. But this should never lead to one-sided cancellation of orders and one-sided changes in payment conditions from 30 to 60 or from 60 to 90 even 120 days. IAF, from the beginning of the Covid crisis, has taken a firm stand on this and has via the press send out an appeal to companies in our supply chain to show solidarity and to cooperate, rather than putting the problems on the table elsewhere upstream or downstream.
This attitude, despite all kinds of sustainability pacts and agendas that have been or will be signed by companies, is linked to the focus on where I can produce the cheapest. This, in my view, is a dead end. It is time for a change! –NE–