The International Apparel Federation (IAF) is the world’s leading federation for apparel manufacturers, (SME) brands, their associations, and the supporting industry. IAF’s membership now includes apparel associations and companies from more than 40 countries, a membership that directly and indirectly represents over a hundred thousand companies and over 20 million employees. IAF brings its members together to jointly create stronger, smarter and more sustainable supply chains, it provides its members with valuable information and guidance and it represents its members on several international platforms working incessantly on more industry standardisation and harmonisation, industry collaboration and inclusiveness of solutions. Han Bekke is the president of The International Apparel Federation. Han Bekke (1949) has a long career in the Dutch and international fashion and textile industry with a specialisation in textile and clothing marketing, trade policy, public affairs and association management. He worked for more than 40 years for several trade associations in the Dutch clothing and knitting industry, lately as director general of MODINT (Dutch trade association for fashion, interior and textiles) which position he held till 1-1-2013. In March 2013 Han Bekke was elected as chairman of the board of MODINT. Recently Team Textile Focus talked with Han Bekke regarding recent activities of IAF. Key discussion points are mentioned below for our readers-
Textile Focus: Could you please share with us the recent activities of IAF in the pandemic situation?
Han Bekke: International Apparel Federation (IAF) has been created to act as a global industry platform, to help create close relations between the industry leaders from all over the world. The core members of IAF are national clothing, knitting and textile industry associations in some 40 countries over 5 continents. For Bangladesh BGMEA and BKMEA are a member next to Denim Expert Ltd. as individual company members.
Especially when times are hard, these strong global connections are very important. They make it easier to maintain contact, to keep the global conversation going.
The apparel and textile industry is the most globalized industry in the world. It relies on good connections between all the different parts of the industry, located in different parts in the world. These connections can be made faster and smoother by using technology, especially 3D digital design technologies. But it also requires good connections and understanding between the different people active in the supply chain.
Standardization is also important to ensure unified and smooth communication in the global supply chains. IAF is continually active here in reducing audit and standard fatigue in a project together with the ITMF (textile industry). It is called SCI or Standards Convergence Initiative. The SCI will serve as a global industry wide platform to discuss and develop a strategy as well as the tools to accelerate the reduction of audit and standard fatigue in the clothing and textile industries.
Another important initiative is the Manufacturers Payment and Delivery Terms Initiative, started by the STAR-network which is supported by GIZ FABRIC- and coordinated by the IAF. It is supported by the Better Buying Institute and the OECD and a range of experts. It is an initiative of 13 participating manufacturing associations in the apparel and textile industries from 9 countries, together representing close to 70% of initial global apparel exports.
First, this initiative has started from the recognition that even though buyer’s own initiatives to improve purchasing practices are important, they are not sufficient. While buyer purchasing practices have been increasingly scrutinized over the last decade for the impact they have on economic, social and environmental sustainability, in the past years it has become very clear to manufacturers that their vulnerability has increased and that they must play a stronger role in setting standards for purchasing practices that support mutually beneficial and sustainable partnerships.
Second, the initiative’s participants agree to make ‘commercial compliance’ the core principle of this initiative. In the context of the buyer-supplier relations in the fashion and textile industries, the initiative is defining ‘commercial compliance’ as purchasing practices that do not cross the boundary of misuse of buying power to the obvious and avoidable detriment of the manufacturer.
In a series of webinars IAF has tried last year to find answers to the following questions all meant to contribute to a necessary re-set of our supply chain based on new business models.
- sourcing strategy and risk management: will production be relocated?
- the buyer-supplier relationship needs to be rebalanced and redesigned. A kind of a fair practice code? See our project with the STAR-network,
- what will speed to market really mean?
- possible new ground for digitization?
- how can smart factories improve productivity and cost competitiveness?
- will e-commerce rapidly grow with more business to consumer brands?
- will fast fashion go to slow fashion? Influences on order rhythm?
- will sustainability and circularity turn into a source of competitiveness?
Textile Focus: What was the observation of Covid-19 and What are the major challenges that the apparel sector is facing?
Han Bekke: Covid-19 caused a crisis that was unprecedented and that will have a lasting impact on our economy and society. Also, our textile-apparel supply chain was highly affected and is slightly recovering since the pandemic is still not beaten with new variations coming up. Health and safety are rightly top priorities, but on the other hand the economy should come back to life.
Before covid-19 our sector was already suffering, hardly healed from the earlier financial crisis from 2008 onwards. It was already clear that our supply chain needed a re-set, something that is now accelerated by the crisis we are in. In my view the buyer-supplier relationship should be re-balanced. We should create a pull market rather than keeping the push market we are in now with heavy pressure on prices. We should investigate changes in the order rhythm, re-consider our sourcing strategies, consider how smart factories could improve productivity and cost-competitiveness, develop an omni-channel distribution plan including e-commerce based on data and finally increase our contribution to a cleaner and more sustainable planet. Speed to market is key but it should go along with shared risk and value among players in the supply chain. On our way to achieve all this, we need more collaboration in our supply chain, more than ever. There is work to be done.
In the short term our supply chain is lacking liquidity. But this should never lead to one-sided cancellation of orders and one-sided changes in payment conditions from 30 to 60 or from 60 to 90 or even 120 days. IAF, from the beginning of this crisis, has taken a firm stand on this and has via the press sent out an appeal to companies in our supply chain to show solidarity and to cooperate, rather than putting the problems on the table elsewhere upstream or downstream. Our project with the STAR-network as mentioned before is a major step in re-balancing the buyer-supplier relationship.
Textile Focus: As a president of IAF, how do you see Bangladesh RMG sector?
Han Bekke: I have seen the Bangladesh RMG sector making a huge step in the last few years to be more responsive, more sustainable, and safer. The export figures in the last years, except of course for the covid-year, are impressive but the industry must realize that it is good in a limited variety of products and material. I would advise more diversification. On the other hand, I would advise to invest in creativity, in your own signature, next to flexibility and speed to market via digitization.
The apparel industry has been caught in a downward spiral of price pressure. A transition, bold changes, are needed to break out of this spiral. Continuous downward spirals of price are indeed a dead end, just adding to overstock, environmental degradation and pressure on our people. It’s now about reducing the high costs of the industry’s low-cost addiction by investing in more effective supply chains that reduce uncertainty, produce what people want and don’t produce what people don’t want.
I believe that digitalization of the industry is the great opportunity for the industry, also in Bangladesh. This is not just because it enables speed and flexibility, its implementation also enforces required process change, within brands’, retailers, apparel and textile manufacturers and certainly also among these supply chain partners. For example, in a digitized design and development process, suppliers, even second and third tier suppliers can be involved from the outset, improving flexibility. But this requires drastic changes to the traditional design and development process. And it requires much more collaborative, less adversarial supply chain relations. The rewards of digitalization of the industry are great and cannot be seen in isolation from the tough but powerful process changes that need to be made.
Transition is enabled by the available technology and pushed by the COVID19 crisis. Transition requires full industry collaboration. Retail is involved, but we belief that more and more the key
to a successful transition can be found upstream in our industry, with garment manufacturers and fabric suppliers.
Technology is great, but it is only through the actions of the people in our industry that we can put it to use. It is important that the large players make major steps, but part of the secret behind the change lies with the countless smaller companies.
The restructuring will be hard, but at the same time it is what will make 2021 such an important and hopeful year. IAF is proud to be able to contribute, in our own way through our convening power, our global voice and our projects, to this restructuring. Past the shuttered stores we can now clearly see the first promising signs of a stronger, smarter and more sustainable industry, more driven by digitization and data, respectful of core skills and new skills and with more collaborative and fair supply chain relations. Here the RMG sector in Bangladesh could take the lead.
Textile Focus: How IAF will help the RMG sector for product development & exports?
Han Bekke: We are not advising individual companies on their business model or strategy. What we do is paint a broad picture of what is happening in our supply chain for companies to base their strategy (partly) on it. Our newsletters, webinars and annual conventions are tools to communicate our vision. For apparel companies it is good to realize that geographically speaking, some of the current shifts, such as production closer to the market and a decline of Chinese market share will continue. Trade politics is accelerating the latter, the transition to more flexible sourcing models is fueling the former trend. From the buyer’s side, uncertainty in the world demands that risks are spread across more supplier countries than before. From the manufacturers side, loss of trust caused by too much unpaid production and uncertainty over client’s financial health, a need for diversity has also arisen. Globally, manufacturers are broadening their customer bases.
Ironically, considering what happened in the spring of 2020, the role of apparel manufacturers in the supply chain has become more strategic. To produce what the consumer wants requires flexibility created upstream. Across the supply chain partnering strategically and communicating transparently among partners is what enables faster, more responsive and more sustainable supply chains. Large brands and retailers will more often work through longer term partnerships with larger manufacturers. But similarly, small upcoming brands will need to work in close collaboration with small and super responsive suppliers, sometimes even being micro factories right on their doorstep. New processes in the supply chain will require a new contract between buyers and suppliers, figuratively and literally speaking.
Transparency will be a huge issue. Tier 1 suppliers will face pressure, but also are presented opportunities, to play an important role in acquiring more transparency upstream for their clients. Alongside the physical and financial stream in the supply chain, in 2021 the data stream will be key. Especially important to realize that governments are coming up with more and more legislation to force our industry to become more sustainable and circular.
Textile Focus: How do you see the change of fashion and apparel lifestyle in post COVID-19 new normal life?
Han Bekke: I have noticed that consumers more and more want to know how clothing products are made, where and under what circumstances. At the same time, they are becoming more conscious of the climate effects of clothing production in their buying pattern. From fast fashion to slow fashion. They move to more expensive, higher quality products with a longer lifecycle and/or to secondhand clothing. On the other side of the spectrum, we see consumers buying more and more on the internet where speed to market is key. I want it and I want it now!.
We must wait what impact on the long term covid will have on shopping. During covid many people worked from home with a negative effect on the sales of mainly men’s clothing (jackets, suits, shirts). Casual wear was my favourite, jogging trousers in particular. The trend is that many companies will combine working at the office with working at home. This might give a further boost to the sales of casual wear, a sector Bangladesh RMG is very strong in.
Textile Focus: What are the major priorities of IAF in 2021
Han Bekke: IAF’s fulfilment of its mission to unite the industry to enable and to promote stronger, smarter and more sustainable supply chains will in 2021 be focused on:
- Contract and equity
IAF believes that the supply chain, to function well, literally and figuratively speaking, needs a new contract. That is why IAF has teamed up with the STAR Network of industry associations, GIZ, Better Buying and the OECD in project in
- Institutional infrastructure
IAF believes that the apparel industry needs a better global, institutional industry infrastructure. It is now too fragmented, with too many global initiatives and it is not inclusive enough, with many initiatives not sufficiently involving large parts of the industry, including manufacturers and small and medium sized brands. IAF has achieved success and will continue to do so, to reduce fragmentation and to make sure that manufacturers and SMEs are well represented in global initiatives.
- Education and training
IAF has since its founding in 1972 recognized that education and training is the engine for positive change of the industry. Bringing knowledge to associations, training them and coaching them can have a great multiplier effect as they in turn educate their member companies.
IAF believes that the industry needs an all-out, all-forces-joined drive for digitization. Education and standardization are two of the major enabling factors that IAF will focus on.
The industry must accelerate its efforts to increase the transparency of its supply chains. There must be an extensive and trustworthy back and forth flow of information alongside the flows of physical goods and money. IAF will focus its efforts on strengthening the collaboration on a global level between the apparel and textiles industries.
- A greener industry
The essence to the greening of the industry is a supply chain wide, collaborative approach. Pledges to reduce CO2 emissions are important but not sufficient. The costs and the rewards of transformation need to be shared better in the supply chain. IAF will focus on bringing the manufacturers’ voice more clearly into the global industry infrastructure that is being built to reduce apparel’s global environmental footprint.
Keeping the focus firmly on fostering true supply chain collaboration throughout all six of the priority issues through its events, publications, projects, initiatives and services, the International Apparel Federation will be fully committed to serving the apparel industry in what will be a difficult but also hopeful year.
Most of these issues will be covered in our annual IAF World Fashion Convention to be held November 8th this year in Antwerp (Belgium). The theme of the convention is “Transition in the Global Fashion System” and we will touch upon this in a series of (hybrid) sessions, each tackling a major issue for the global apparel industry, bringing together relevant players in the fashion ecosystem. I sincerely hope to see you in Antwerp. See www.conventionantwerp.com for more information. For next year, the event will be held in Bangladesh, organised by IAF in cooperation with BGMEA and BKMEA.