A Critical Point for Supply Chain Reinvention: How Artisan Sourcing and Collaborations Can Lead to Supply Chain Resilience
Suppliers, brands, corporations, and consumers have all been struck by calamity and we must use this moment to be creative, flexible, and adaptable, together. Julia Gardner, the Director of Corporate Partnerships at Nest shared how we can do it on CFDA Industry Insights.
A recent McKinsey/Sourcing Journal survey shows that supply chain disruptions and the drop in demand have led to steep cuts in sourcing volumes. Many of the challenges and solutions identified are especially relevant to working with artisan businesses. While factories around the world may be closed and wholesale orders may be canceled, numerous businesses in our network are engaged in craft production from their homes and are open for business. Collaborative projects between brands and artisan suppliers can help mitigate crises for brands and provide artisan businesses with much needed economic support. The time is now to rethink partners, consider the inclusion of handcraft, and build resilience at both ends of the supply chain.
The handcraft and homeworker economy is the second-largest employer in the developing world, valued at $526.5 Billion according to market research company Research & Markets. It is estimated that the home-based labor component of the artisan sector alone employs more than 300 million artisans. These artisan businesses are already activating in support of their brand partners and there are a number of ways that these relationships can be mutually reinforcing for both fashion businesses and craft suppliers.
As many brands experience slowed sales and shuttered storefronts, there is a plague of excess inventory. Artisan businesses are uniquely skilled at operating on thin margins and pivoting when required. Giving excess inventory or material from canceled orders to artisan businesses for repurposing diverts finished product from landfills and gives new life to the material and products. This kind of collaboration is a win-win-win. It solves a physical storage problem and prevents destruction in a landfill, provides income and new line production opportunities to artisan businesses, and ignites storytelling opportunities of social impact and ingenuity. Consider unique and timely opportunities — could excess inventory be used to make masks or other forms PPE? Could it be upcycled into accessories for the next season?
Countries around the world are now exploring reopening and artisans can be helpful as planning partners in understanding conditions on the ground and advising the brand of current changes to production capacity. Producing on-demand or bespoke work is a sustainable pivot for many brands that have seen the effects of too much inventory and one that encourages artisans and brands to work together on creating products that meet the reality of changes to production conditions and capacity. While lockdowns have halted many other kinds of production, artisan businesses using home-based production have a unique strategic advantage. This decentralized structure, historically considered problematic because of a lack of transparency, can be relied upon to create inventory as long as there are materials. If you need to evaluate new suppliers, some of the artisans in Nest’s Guild are providing virtual facility tours that can help give you access to the people and processes involved in the production. If additional transparency or new sourcing options are required, organizations like Nest can provide insights to help build strong and smooth relationships between brands and artisan businesses even providing certified accountability and transparency with Nest’s Seal of Ethical Handcraft.
For brands that are looking for new products to add to their assortment, many artisans are open for business! Some are using this time to create new products and collaborate on future collections, samples, or products to be ready when the markets reopen. One example of this is the pivot to the production of PPE. As many brands are looking to source facemasks for sale, consider sourcing yours from a small business that needs the support. Take the time to co-create something unique and then tell the story about your collaboration on social media, as we’re seeing, posts about face masks are well-received.
Nest supports those at the bottom of the supply chain by increasing the demand for responsible and time-honored handcraft, generating greater economic opportunity to support livelihoods, and promoting worker wellbeing. Nest’s key constituency is a national and international network of artisan businesses and makers reaching 989 businesses and over 221,131 workers whose social missions undergird their commitment to craft, tradition, and the handmade. These are businesses that operate on slim margins outside of the four-walled factory and often out of sight of the brands that source their product. These businesses are by nature nimble and creative, with deeply rooted ties to the cultures in which they originate. We’ve seen our artisan business leaders take the time to lead training and discussions where they have invited their clients to join virtually in their homes and workshops and learn about artisan craft techniques. In the event that your brand is looking for other forms of engagement for your consumers, artisan businesses are offering creative content for partners–this could take the form of at-home/DIY kits, Instagram craft or production tutorials, and workshops with your team or your customers.
Brands are already supporting artisan businesses through some of Nest’s COVID-19 Response efforts such as the PPE Purchasing Initiative in which brands provide financial support for businesses to produce and donate PPE to their communities in need.
A symbiotic relationship between brands and artisans can creatively solve a number of brand problems while increasing opportunities for growth for the small businesses brands source from. Taking the time to increase communication and collaboration now, can pay dividends for all parties in the long run.
Tags: COVID-19, Nest Guild, PPE