The future of digital supply chains

Fung Group is the world’s largest supply chain group: an $18.8bn revenue giant that sits in the centre of the global apparel industry. If you live in the US or Europe, chances are you are wearing something that has been across their supply chaiun. I recently spoke to Fung Group's Executive Vice President, Pamela Mar, in order to understand how global supply chains are faring amidst the pandemic.

Here are some highlights from our conversation – you can listen to it in full here. 

Do you think that something like the Covid-19 pandemic is a fundamental game-changer to the way we think about supply chains, or do you think it accelerates ideas that were already being developed within your professional domain prior to the pandemic?

Pamela Mar: “I would like to think that it's going to be a game-changer because it should force us to reconsider: a) our relationship with suppliers, b) the global supply chain and how it operates, and c) the importance of safety and sustainability and flexibility in the supply chains that we use to produce things that we use every day. I think some of those lessons are becoming very clear.

After the supply chain finishes dealing with all of the operational issues, how do you get people back to work safely? How do you restart the global economy? How do you kickstart demand in amongst populations which have been locked down for two months? Then we could actually get back to those questions about how do we ensure that the growth of supply chains, in a way that is actually beneficial for people and the Earth.”

Have you got good positive on the ground experience where local workers have welcomed the arrival of the new technologies? What your experience of that automation robotization process has been on the ground in apparel factories worldwide?

Pamela Mar: “What we're seeing is that certain parts of the process are being automated automated cutting, automated pocket making, automated button, and so on. All of that improves the quality and it's allowed the factories to be more productive.

It hasn’t had a lot of impact on labour because it allows a factory to improve quality, reduce rework and then produce more.

Now, for things like laser printing or laser cutting, that might have a bigger impact on labour. As the workers themselves start to learn more about digital tools and become more well equipped to operate the machine, then actually that's a process of economic upgrading and there's nothing sustainable about keeping someone in the same menial job for a long time.”

When you look out at the sort of spectrum of technologies that are coming, which are the ones that are going to have really significant impacts?

Pamela Mar: “The front end process is actually very highly digital using technologies to track point of sale, drones to deliver things. But if the back-end cannot connect to that because the back-end isn't digital enough, then that's going to be a problem. So our priority has been to digitize more parts of the back end process including reading capacity, including gather data on the status of production including looking at workers' skill levels. I think the other one is going to be blockchain because of the need for traceability, especially now with a pandemic. You actually really do want to know where the good came from in a way that's secure."

Listen to our full discussion here.