The Future of Supply Chains: Embracing Modern Traceability in the Textile Industry

In today's fast-changing global market, supply chains in various industries are experiencing major restructuring. The textile industry, in particular, faces significant challenges that require a shift towards more resilient and efficient supply chain models. Confronted by the difficulty of gathering information across the entire value chain, improved traceability has become a crucial concern for businesses. As environmental and social concerns grow, the ability to improve visibility and track every step of a product's journey from raw material to finished good is now essential.

Challenges in the Textile Supply Chain

The textile industry is notorious for its fragmented and opaque supply chains. This lack of visibility can lead to several dysfunctions:

• Uncertainty of Origins: Often, the origins of raw materials, like cotton, are unknown, raising concerns about unethical practices such as child labor or environmental degradation.
• Stock Management Issues: Poor coordination among supply chain partners leads to inefficiencies and increased costs.
• Environmental Impact: Modifications and waste generation due to a lack of precise tracking contribute to significant environmental harm.
• Counterfeit Products: The proliferation of counterfeit goods undermines brand integrity and consumer trust.

The consequences of these dysfunctions can be severe, as highlighted by the Rana Plaza tragedy (2013). They also hinder the development of more ethical and sustainable models. For instance, without reliable traceability beyond direct suppliers, how can we verify that cotton is genuinely organic and free from child labor? How can we ensure that recycled plastic in sustainable clothing isn't sourced from fraudulent factories that manufacture plastic bottles solely for "recycling"? How can we uphold promises made to consumers? These real-world examples underscore the critical need for comprehensive visibility across the industry.

Leveraging Technology for Modern Traceability

Technological advancements offer promising solutions to traceability challenges in the textile industry. They enable access to previously inaccessible data, in-depth and realistic supply chain analysis, proof of claims, and risk identification. Blockchain, Big Data and Machine Learning are particularly transformative...

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In the Spotlight: Missed the live PwC webinar on EU Deforestation compliance? The replay is now available!

Catch up as Matthieu Hug shares Tilkal's expertise in the second installment of this PwC Belgium webinar series.

The session delves into the practical implementation of the EU Deforestation regulation, focusing on:

? Strategic and operational considerations, and the challenges in designing your EU Deforestation compliance roadmap

? Selecting and integrating the right technology to enable and monitor compliance effectively

? Meeting traceability requirements and overcoming interoperability challenges within and beyond your organization

Don’t miss this opportunity to gain crucial insights and ensure your company is prepared and compliant. Watch the replay now!

Policy Watch

• Are you ready for the updated EU Breakfast Directives?

The EU has introduced stricter rules on packaging under the updated Breakfast Directives, focusing on products like honey, fruit juices and jams. These regulations are particularly significant for the honey industry, where batch blending is prevalent and tracing products back to their origins can be challenging. Producers are now required to disclose the country of origin for honey, with specifics on percentages if sourced from multiple countries. This update addresses concerns over close to half of tested honey being suspected of fraud in their “From the Hives” action published in 2023, a threefold increase since the EU's last study published in 2017. Read more.

• CSRD: EFRAG publishes three Implementation Guidance (IG) documents for the ESRS

EFRAG publishes three Implementation Guidance (IG) documents for the ESRS, addressing materiality assessment (IG 1), value chain (IG 2), and ESRS datapoints (IG 3). These non-authoritative guides aim to assist companies in complying with the CSRD by clarifying reporting requirements and answering common concerns. EFRAG also released feedback statements for each IG document to reflect public consultation input and summarize key comments. Read more.

• Senate Inquiry finds BMW, Jaguar Land Rover and Volkswagen Imported Cars Tied to Forced Labor in China

A congressional investigation found that BMW, Jaguar Land Rover, and Volkswagen sourced parts from a Chinese supplier implicated in forced labor programs in Xinjiang.

“Automakers faced an “enormous” task in trying to trace their full supply chains, partly because they are heavily dependent on the cooperation of direct suppliers, which does not always happen”. Read more.

Want more? Here is the top 3 of our most-read blog articles this month

1) Digital Product Passports: a lever for transparency and sustainability

2) How is Danone using blockchain to drive transparency and traceability in a global supply chain?

3) Valrhona: traceability to support responsible cocoa sourcing

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