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OEGSTGEEST, NETHERLANDS – Roughly 6 per cent of fashion is being ‘discarded’ due to stock inefficiencies and inventory black holes. This is the finding of a new study which suggests 2 per cent of fashion is damaged or perished while an additional 4 per cent which is overproduced. Asked what is happening to discarded stock, the report’s authors told Apparel Insider: “We did not ask what happens to discarded inventory so cannot draw conclusions. We just know it’s wasted inventory – bad for business and planet.”

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The data has published in a new global report by Avery Dennison, a leader in materials science and digital identifications solutions. The Missing Billions: The Real Cost of Supply Chain Waste looked at the state of global supply chains and the issue of waste across the US, UK, France, China and Japan.

The report analysed 65 global apparel firms including manufacturers, wholesale and distribution firms, and retailers. It found the biggest contributor to supply chain waste is faults with packaging with respondents rating this as 5.3 out of 7 in terms of severity of concern. This was closely followed by inefficient transport and delivery and damage to products when handled (both concerns rated 4.9 out of 7).

Demand volatility is listed as the biggest disruption to supply chain operations by nearly a third (29 per cent) of respondents. Transport issues also feature highly with the ‘increased cost of transportation’ stated by 15 per cent and an equal number citing ‘availability of transportation and logistics capacity’.

89 per cent of respondents said they are coming under pressure to become sustainable and estimate that 27 per cent on average of their total company sustainability impact comes from their supply chain activities. But despite this awareness of the problem, they are not investing the budget required to fix it, the report claims, arguing that just 4 per cent of technology budgets are specifically dedicated to supply chain sustainability improvement.

Use of RFID technology to help with supply chain tracking is used by 44 per cent of apparel companies surveyed in the report but all respondents stated they will use the technology within the next five years. Other technologies that can help with broader efficiency are also major investment targets. The use of robots or cobots will see a 12x rise in the next three years from 6 per cent today to 75 per cent by 2025, the report claims.

The researchers also surveyed 7,500 shoppers globally to understand shifts in consumers’ spending. Cost is a high priority for consumers globally when it comes to buying products. However, quality is ranked equally alongside cost as the number one concern at 22 per cent.

UK consumers are the most cost-conscious with 28 per cent listing it as the top priority followed closely by France and Japan, both at 25 per cent. China is a significant outlier with just 6 per cent of shoppers surveyed stating cost as their number one concern.

The data also reveals some concerning trends around sustainability with just 16 per cent of shoppers putting sustainability in their top three deciding factors and only 12 per cent prioritizing the ethical sourcing of their products. However, the research also points to a shift in the desire for durable products with ‘durability’ ranked by 1 in 2 global consumers (48 per cent) as a top five concern, suggesting there is an opportunity for business to shape the future of sustainability by putting a greater focus on product durability and in enabling the circular economy.

Shoppers also signaled the importance of transparency with 43% agreeing that when buying clothing, “transparency about a product’s journey to the consumer is important to me”.  However, despite good intentions, most consumers know very little about what it takes for a product to end up in their hands. The research found that over half of global consumers (54%) mistakenly believe fast fashion is made entirely by machines.

Francisco Melo, senior vice president and general manager at Avery Dennison Smartrac said: “The current supply chain disruption is leading to a waste crisis in the apparel industry and elsewhere. Having visibility is key to optimizing supply chains for efficiency and sustainability, as well as helping to build trust and transparency with consumers. Digital identification solutions play a vital role in supply chain planning strategy and it is encouraging to see that companies are committed to further drive this change through the increased use of RFID technology in the coming years.”

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