What fashion can learn from other industries’ supply chains

Sign up to receive the Vogue Business newsletter for the latest luxury news and insights, plus exclusive membership discounts. To become a Vogue Business Member and receive the Sustainability Edit newsletter, click here. As large fashion companies have expanded their supply chains globally to cut costs, those chains have become both tangled and complex. But many industries have complex supply chains; the key difference is that the fashion industry has historically lacked regulation, so there’s been little incentive for companies to invest in the infrastructure to collect information about their complex supply chains. “The fashion industry keeps saying it’s harder to [track the product’s life cycle through the supply chain] in fashion, and I think that’s an excuse,” says sustainability activist and expert Lindsay Dahl, who is currently chief impact officer at supplement company Ritual and previously held positions at Beautycounter and various consumer safety organisations. “The steps from the cotton field to finished products on shelves — these are processes that are just as complicated in other industries. Traceability is insanely hard and no one can get it perfectly right.” Part of fashion’s problem is that brands typically don’t have strong relationships with suppliers. “There is inherent fragility in most fashion supply chains due to the culture of top-down governance, arms-length relationships and underfunding of procurement and sustainability,” says Donna Marshall, professor of supply chain management at University College Dublin. When compared to other industries that typically exhibit stronger traceability practices than fashion, there were a handful of trends: first and foremost, others have more stringent traceability regulations than fashion and, as a result, have been practising traceability for a longer time. Those industries also have reasons for traceability beyond compliance, such as consumer safety and efficacy, both particularly important in the food and automotive industries. “To thrive in the future, in the face of competition, regulation and an increasingly disrupted world, fashion companies have to change their mindset from penalties, risk and compliance to relationships, trust and innovation,” Marshall says. Here, we break down the traceability lessons that fashion can learn from other industries: food, transport, and beauty and wellness. Key takeaways include working collaboratively within the industry, building stronger relationships with suppliers (or applying degrees of vertical integration) and testing products for sustainability and safety metrics earlier in the production process. Food Food has typically seen stronger traceability than fashion because of consumer safety concerns. (It’s important to note that worker safety is still an issue, and labour exploitation across the food industry is on the rise.) “The testing market is pretty mature and well penetrated,” says Jocelyn Wilkinson, partner and associate director at Boston Consulting Group (BCG) where she works across a number of industries (she was previously on Burberry’s sustainability team for 13 years, overseeing both beauty and fashion). “Food brands often have a bigger architecture that sits behind making sure there’s a safety component [being discussed during] research and development and as very early design phases of a new product are coming together. In fashion, they would handle safety considerations after the initial R&D (research and development) is done — the R&D is done for a different reason,” including design and function, rather than safety. The vertical integration of food supply chains is linked to a focus on consumer safety. “If you look at a product that needs to be heated to a very high temperature to pasteurise it, there are very clear safety requirements in place for how that has to be done. In the UK, there are a couple of really big processors in the dairy industry who do that processing and have very close relationships with everyone who buys butter from them or who are owned by them,” says Wilkinson. There’s fragmentation in supply chains in virtually every industry, she continues, but typically, there’s less consolidation in fashion than in an industry like food. “If we’re on a cotton farm, the cotton needs to go to a gin (cotton engine), then a spinner, and most likely all these parts of the supply chain are owned by different people.” Lessons for fashion: Greater degrees of vertical integration can make traceability much easier. Some luxury brands like Prada and LVMH have begun investing in their suppliers, allowing for further control, better margins and increased speed to market. However, acquisitions can be costly, and since luxury fashion brands in particular often work with small, family-owned suppliers for very specific parts, it can be challenging to integrate them into a large multinational brand. If supplier acquisitions aren’t possible, developing stronger relationships with suppliers and maintaining a consistency of supply would still benefit fashion’s supply chain. Additionally, the logic around R&D could be helpful, especially as brands think of how to future-proof their products amid regulations like extended producer responsibility (EPR), which focuses on waste. The real game changer would be if brands were to design according to how safe, readily available and traceable each material is. Transport Automotive manufacturing is one of the most highly regulated industries, again because of its safety standards. If a single part is determined faulty or doesn’t reach strict specifications, it will be recalled, which is considerably costly for manufacturers. Each vehicle can have up to 30,000 parts — far more than a fashion or beauty product — so the industry has had to develop advanced software to process all the data and help manufacturers keep records of parts. Often, barcodes or digital identification tags are used to track back to the original supplier. Since a faulty part can have a huge impact on manufacturing time, advanced automotive manufacturers have implemented real-time visibility of their supply chains, using GPS or radio-frequency identification (RFID) to trace components. Marshall points to Toyota as a positive example, particularly, she says, as the brand “works with suppliers on product and strategy development, has cost and benefit sharing schemes with suppliers and views suppliers, especially lower-tier suppliers, as experts and partners”. Toyota was ranked highest by suppliers in the 2024 North American Automotive OEM-Supplier Working Relations Index study. “Although fashion brands have implemented multiple techniques from automotive supply chains, such as lean and just-in-time (a manufacturing method that tries to match production with demand and focuses on efficiency), particularly focused on low inventory, what most failed to adopt were key cultural techniques,” says Marshall. Strong relationships have benefitted Toyota. Throughout 2023 and 2024, Toyota’s traceability system allowed it to swiftly recall Prius hybrid vehicles based on specific production batches with safety issues. “Traceability is seen as a key tool for ensuring quality, for collaboration and for mapping the supply chain and was easier to implement due to the supplier community Toyota had built,” she adds. Supplier relationships are the most important aspect here: the aerospace industry — which has similar regulations and safety concerns — has typically witnessed weaker traceability because of “a cost-focused strategy and arms-length supplier relationships”, according to Marshall. Lessons for fashion: In addition to implementing more advanced traceability systems (including real-time traceability, which few fashion brands have access to), fashion would benefit from seeing its suppliers as collaborators, rather than having a top-down structure. As legislation bubbles and brands become more reliant on suppliers to provide information in order for them to comply, switching to a collaborative mindset might become just as urgent for fashion as it has been for the automotive industry. Beauty and wellness A lot of the beauty and wellness industry’s challenges are similar to those of fashion, as the beauty industry also has complex and fragmented supply chains with many different suppliers. There are also risks associated with raw ingredients sourcing. Dahl adds that beauty brands tend to “cherry-pick hero ingredients that have a traceability story that sounds romantic”, as opposed to being particularly specific about how those ingredients are sourced and processed. To the beauty industry’s benefit, the high volume of products means brands might have “a significant play in the market, so they can define standards in a less fragmented way” compared to fashion, says Wilkinson. Generally, the biggest beauty brands are newer than the biggest fashion brands, which makes it easier to become a disruptor and change how things are done. The beauty industry has developed a cross-industry coalition, the Traceability Alliance for Sustainable Cosmetics (TRASCE), which includes 15 founding members such as Esteé Lauder Companies, L’Oréal Group, Chanel, Clarins, Dior and Shiseido. TRASCE members are using a singular platform, Transparency-One, to simplify the process for suppliers in terms of sharing data, and ensuring it’s analysed in a common manner. “As more suppliers join the network and share information, the beauty industry will gain a clearer picture of our supply chains,” says Meghan Ryan, executive director of responsible sourcing at Esteé Lauder Companies on behalf of TRASCE. “This collective effort is both a factor of simplification and a tool for accelerating the transition. This joint dynamic is undoubtedly more powerful than an accumulation of individual initiatives.” Supplements, typically, have faced weaker traceability. Ritual was the first in the industry to share product-level traceability information with consumers, according to Dahl. The brand works with suppliers to back up clinical evidence, human trials and find higher quality raw materials for products. Dahl says fashion should test in the same way as beauty and wellness. “When you’re designing a product, whether that’s a T-shirt, a supplement or a beauty product, you should know enough about the risks in your supply chain when you’re designing it to be able to identify problematic ingredients or treatments or worker-safety issues,” she says. For instance, whether a material is treated with forever chemicals (PFAS) or is created from materials that shed microplastics. Lessons for fashion: The early testing phase of beauty and wellness should be implemented into fashion, experts say. In addition, a cross-industry approach is rarer in fashion, which will become essential to driving real systemic change. Comments, questions or feedback? Email us at feedback@voguebusiness.com.

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