The Easter Big Read
This argument is wide and my worldview is narrow when we consider the collective worldviews of the recipients to this email chain. Perhaps I’m overly resistant to change and stubborn. But if you had to ask people a question about tradeoffs I’d wager that the lower tech society of 2019 wins out over the efficiencies gained from 2021.
As we turn the corner to Q2 I can confidently say that we’re in a better place than 3 months ago. There’s lots more of the cliff face yet to climb and each spike hammered into the wall has struck deep, changing rock formations. Shaping how we summit the mountain ahead.
So slide on those Crampons and get climbing.
The Easter Eggs of 21′
This was the headline announcement of January. No matter your viewpoint, it’s a progressive move. It sent emotions on overdrive and the subsequent announcements of Singapore as the new home for other global sourcing organisations reads like herd mentality. Perhaps they’re related, but any move of such scale for businesses that have since announced or will soon announce their intentions have been many months in the making. Being the first to make headlines has a major ripple benefit for the fashion giant. Get to the headlines before your peers do.
Singapore as a play is an offshore empowered supply chain in closer proximity to countries with less-trade disputes. It’s hedging bets for a continued decoupling of the US & China trade relationship and perhaps it’s a move that can unlock fundamental change.
The reality is, real change is lasting change and in the tit for tat geopolitical environment of the last 3 years leaders and their organisations have been working too hard at keeping up whilst keeping costs down. Long-term planning is a nightmare when your world looks different quarter to quarter. Singapore is stability… for now.
It’s not all sunshine and rainbows, even with a smaller org chart in Singapore there are still desks to be filled. Now that several big fish are moving into a smaller pond their battlefield for talent will heat up, that’s if they take a traditional view to the labels we buy when we look at talent.
Labels like “years of experience” and “current role title” limit possibility rather than the story that you’ve told and that you could tell for the next organisation as well as the change that you’re seeking to be part of making. Taking boxes off of the squares and looking at them as entities without one single shape.
Scarcity creates opportunity, it forces change. The scarcity in Singapore’s sourcing industry-specific talent pool reeks of opportunity. The opportunity to strip dated beliefs that hold us back and keep us in playing musical chairs.
I’m not saying hire a pastry chef into a role of QA, but taking the mindset to looking at the raw ingredients as well as the finished product. Intangible raw ingredients and attitude. Can organisations turn into ovens that bake the dough, pushing out loaves of talent?
Hong Kong’s ripple
One year ago when I wrote our first whitepaper I anticipated a return to the Rugby sevens in October, I was so wrong that I had to write a second whitepaper to drown out an optimist’s fallen vision.
The shift of these sourcing organisations out of Hong Kong into Singapore doesn’t bode well. But in a time where everyone tries their hand at microeconomics we also need to wear the realist’s hat. Asking, what’s actually changed versus what could change.
Our city’s future is uncertain, shifting out of Hong Kong and setting up in Singapore takes a combination of talent and $$$. For many a brand sourcing organisation the allocation of capital is better served with the more pressing needs of the business. Global trade conflicts have Hong Kong close to the centre, it’s not too farfetched to foresee more apparel & footwear offices lift off out of the city. However, the wait and watch tactic has its benefits. It’s also not too extreme to believe that the two battling economic superpowers could turnaround their relationship and Hong Kong could see a resurgence.
No matter which angle you view the world from doom and gloom talk is hogging the mic. A shipping & logistics executive in the US put it simply to me the other morning;
“Retailers are going to continue to see strong sales through the end of 2021. The haves have been shopping while the have-nots have been sidelined due to quarantine rules so expect the have-nots to start spending with gusto after coming back to work in the service sector.” – Ken Duncan – Managing Director of Commercial Operations at Port of Long Beach
If consumption rises alongside lessening hospitalizations we’ll see this confidence reflected here in Hong Kong in the form of more order volumes and the supply chain offices could be feeling the heat of the so-called roaring 20s. Whilst a lack of access to China has been a blow for Hong Kong and its supply chain leaders any opening up of the gates could bring a flurry of activity seeing a resurgence in China’s supply chain.
The World’s Cot-ton to Xinjiang
A continuing loss of market access to China will be a massive blow to foreign brands that have been looking to the one-party state as a key revenue contributor. Geopolitics is sucking western brands into a whirlpool with a spin that’s only increasing in velocity. In a battle of “who’ll be the last man standing” the PRC has shown it can go the distance whilst incurring great costs in order to reach an outcome. Retail industry lobbyists face being pulled in two directions, taking action for the sake of humanity whilst risking retail’s continued descendence or through arguing that the decimation of such a large industry representing one of the biggest employment sectors is in its own right a humanitarian crisis.
Brand Nationalism in China is on the rise and the forced absenteeism of foreign brands on major e-commerce platforms could be the very knell of the death bell for international brands investing heavily in their China business. Right now China is the biggest carrot for the Donkey that is Apparel & Footwear and the coach driver that is global politics is dangling it further out of reach.
Covid was a macro black swan event, the materials crisis stemming from global pushback against China’s treatment of Uyghurs is an industry black swan. Like cloud computing, Traceability is going from a nice to have to a need to have, playing catch up when the dial is constantly turning is causing major stresses for global sourcing organisations and their manufacturing partners.
The headache that is this crisis has a clear silver lining. With the big whelp to the backside getting behind traceability is no longer optional and brands have an opportunity if they look at traceability as more than a reaction to current events. Building this in a supply chain capability that will enhance global sourcing’s ability to integrate across the chain because of greater accessibility to a wider range of data points. There’s a dual goal at play here, one is to cover our a**es from a future belting, two is to look at the future of traceability and its impact to whatever supply chain 5.0 might be.
How many merchandisers does it take to screw in a lightbulb?
Materials leaders that can not only twist the bulb into place, but switch on the power will see their demand grow and outstrip supply. The global spotlight for materials is fairly new and much like everything right now the role is staring into a dark tunnel with freight trains running in both directions. As time in the spotlight continues to grow look for brands to take a proactive approach towards transparency. The materials role doesn’t increase its influence in global sourcing alone, but across the wider realms of the retail and customer sides of the business. As the attention rises so does the workload and ultimately the need for enhanced intangibles. Stakeholder management isn’t a skill it’s a result and an action. There exists a large chasm between management and mismanagement and the optimum stakeholder management outcomes will be from materials talent that is assertive.
Organisational heads will be tasked with championing the rise of material’s influence within their four walls ensuring that change succeeds and that a war of attrition is avoided. In order for materials leaders to effect real change they’ll require access unlike ever before, functional heads will resist like anyone would when they’ve been forced to share their supper. Global Supply Chain leaders overseeing multi-function organisations have many transformations on the go and their role is as master project manager, supporting workstream change agents through any resistance and subconscious sabotage.
MUST pay attention
The collapse of MUST garment sent shockwaves through the industry, leaving both heartache and opportunity. One of the more robust and well-run manufacturers wasn’t able to hold on to the overcrowded life raft leaving many in need and showcasing the fragility of our upstream supply chain. The intangible impacts are impossible to measure and far rippling, whenever a giant falls an entire industry takes notice.
The large supplier had a strong base of customers some healthy and some deep in the red. Suppliers like MUST are hard to replace, they championed development in emerging offshore locations and their departure both hastens as well as halts wider industry progress. Brands need manufacturers and suppliers capable of moving into new frontiers, forced into value-creation by shrinking margins. The 40 Million pieces produced annually will be picked up, but it’s a rich history and continued contributions to an industry that gets lost in the dust. The sudden absence of a large blue-chip supplier like MUST is an industry-wide blow that hits brands harder than they know it.
A Shippy Situation
The best picture of 2021 has already been snapped and we’re only rounding the corner of Q1. Evergreen’s liner blocking up the Suez Canal foreshadows another challenging year for global shipping. With sea freight rates at record highs and retailers forced further into the corner by liners and 3PLs the term collaborative commerce will take a more literal definition around the flow of products. Supply Chain and Logistics Managers are facing the biggest tests of their careers. Last year saw a massive spike in new DTC brands, the real tests come after when novelty has worn off international supply chains for young brands are treacherous waters that can stunt growth and sink ships.
The network effect of leaders and change-makers is faster becoming a key requirement in a disconnected world. Without a plane to fly, a train to take and a factory visit it is relationships resting on strong and empathetically reciprocal foundations that’ll trump who gets the nod and who doesn’t. Supply Chains are inter-organisational and moving other external busineses to match your cadence when you can’t get face time requires bonds forged beyond simple orders placed.
Relationship lengths tend to be a good indicator of reciprocity, but its “moments of truth as well as stress tests/crises shared that are the makings of great partnerships, resilience co-piloted. These relationships have been fundamental to the continuity of the supply chain world whilst accessibility has been ground to a halt.
When we’re acquiring talent we’re acquiring reputational value as well, a reputation that extends beyond the employees they can potentially attract. More consolidation of brands = more supplier consolidation, smaller ponds and more big fish. With such rapid rates of change its become essential to have vendor mobility, getting lines on a factory floor at full capacity isn’t a magic trick, its true partnership in practice.
One supply chain leader last year reflected to me that there’re two types of sourcing leaders, there’re the finance types and then there’re the relationship types. Both have their place, but relationship makers aren’t going out of stock. Not anytime soon.
A Rolodex stacked with cards is a funny thing. More than the ink, paper, phone number or the email address it holds the opportunity. Shared opportunity. Because every card exchanged is a hand-shaken (or an elbow bump). It’s worth far more than a digital signature.
Working with Spire Executive means increasing the level of knowing. Hiring is like buying art in the sense that the real value and the potential value is in the real thing. We make sure that people don’t buy fake Mona Lisa’s.
The Overhead Reshuffle
The talent reshuffle is ongoing and we’re seeing less checking of the checker as production countries pick up more of the load helping brands build more reactive supply chains. Talent pools in Bangladesh, Vietnam, Sri Lanka and other neighboring offshore hubs are primed to handle the hard graft as Hong Kong’s control tower sourcing organisations thin out closer to the base of the pyramid. It took a pandemic to get here, but the need to get overheads down has put retail supply chains closer towards the 4.0 look than the good times in the industry ever did.
We’ve grown comfortable with remote management and as the pyramid spreads out across geographies we can expect to see continued investment in offshore country leadership hiring. Expatriate leaders have been sharing knowledge, experience and values with country production talent for decades and in cadence the globalised world has made many individuals into better bridges, as a result leadership and more importantly the bridging ability of talent in the region is at a better level than it has ever been.
What’s up Doc
I’ve for a long time been called old-fashioned, someone somewhere once said so and it then became the narrative that I tell myself. All you need to do is scroll through my Spotify and you’ll see a playlist of pre-millennia lyrical genius.
Old fashioned is nostalgia, I miss the pre-pandemic period like many of us do. Diving deeper, it’s not the travel nor the accessibility to activities that have since been restrained that I miss, at the root it’s the experiences and memories that these activities create. I hope we take the best gains from this pandemic whilst blending them into values and beliefs that really matter.
Happy Easter and as always,
Keep it radical.