Untangling the Web: Overcoming Fragmented Supply Chains

The fashion and beauty industries thrive on global networks of suppliers, manufacturers, and distributors, but this vast reach comes at a cost. A fragmented supply chain, where each stage of production is handled by a different company, often across multiple countries, creates logistical challenges, transparency issues, and inefficiencies that are difficult to manage.

With rising regulatory pressures, evolving consumer expectations, and heightened sustainability demands, brands must rethink their supply chain structures to stay competitive. 

This article explores why fragmented supply chains are a growing risk, their impact on brands, and the strategies retailers and manufacturers can adopt to build a more resilient and transparent system.

The Problem: Fragmented Supply Chains in Fashion & Beauty

The global nature of fashion and beauty supply chains means that a single product may involve multiple layers of suppliers. From raw material extraction to processing, dyeing, manufacturing, finishing, and packaging, each step is often outsourced to a different entity. This decentralised structure makes it difficult to track and optimise processes effectively.

• 34% of fashion executives cite fragmented supply chains as a major operational risk in 2025, ranking it among the top industry challenges.
• Only 25% of fashion brands are expected to maintain regular supply chain risk reporting in 2025, down from 50% in 2023, highlighting a decline in transparency.

1. Supply Chain Transparency

Many fashion brands lack real-time visibility into their supplier networks, making it difficult to:

• Monitor ethical and environmental practices.
• Identify bottlenecks in sourcing and production.
• Ensure sustainability compliance across all supplier tiers.

The E.U.’s Digital Product Passport (DPP) initiative is pushing brands to digitally document their supply chain origins, carbon footprints, and product durability. However, many brands still lack the infrastructure to track their suppliers effectively.

2. Disjointed Supplier Networks and Operational Silos

The lack of integration between supply chain stakeholders leads to:

• Inconsistent data flows between sourcing, production, and logistics teams.
• Delays in decision-making, impacting demand forecasting and inventory management.
• Increased costs due to last-minute fixes like expedited shipping or overproduction.

Luxury fashion brands LVMH and Kering reported a combined €5 billion ($5.4 billion) in excess inventory in 2023 due to poor demand forecasting and fragmented supply chains.

• 75% of fashion executives plan to adopt AI-driven demand forecasting, yet only 30% have fully integrated these technologies.

3. Risk Exposure and Compliance Challenges

Fashion brands rely on multi-tiered supplier networks spread across multiple regions, exposing them to risks such as:

• Tariff changes and trade disputes.
• Geopolitical instability, impacting production hubs and shipping routes.
• Sustainability compliance, requiring brands to prove ethical sourcing, which 45% of fashion brands struggle to verify from their suppliers.

The Italian fashion sector, home to 67,000 small companies, faces a highly fragmented supply chain, where tracking materials and ensuring compliance is increasingly difficult.

The Consequences: Why Fragmentation is a Growing Concern

Quality Control Issues

• When production is scattered across multiple suppliers, ensuring consistent quality becomes a challenge.
• Variations in labour and safety regulations across different regions further complicate quality assurance.

Logistical Delays and Increased Costs

• Brands relying on disjointed supplier networks face longer lead times.
• Cape Horn diversions in 2024 increased shipping transit times by up to 30%, forcing brands to pay 15% higher logistics costs.

Financial Losses from Overproduction and Excess Inventory

• The fast-moving nature of fashion trends means that outdated stock often goes unsold.
• 20% of all garments produced never reach consumers, leading to billions in waste.

The Solution: How Brands Can Overcome Supply Chain Fragmentation

1. Digital Integration for End-to-End Visibility

• Invest in real-time tracking, blockchain, and AI-driven forecasting to enhance visibility across all supplier tiers.
• Use Digital Product Passports (DPPs) to track product origins, sustainability metrics, and compliance data.

M&S has implemented the open-source Higg Facility Environmental Module (Higg FEM) to track supplier-level data on carbon emissions, water use, and waste management, helping improve supplier transparency.

2. Strengthening Supplier Collaboration

• Build long-term supplier relationships rather than relying on short-term cost-driven sourcing.
• Consolidate suppliers to reduce operational complexity and improve oversight.

Beauty giants L’Oréal and Estée Lauder are part of the Traceability Alliance for Sustainable Cosmetics (TRASCE), using platforms like Transparency-One to share supply chain data and improve sustainability tracking.

3. Near-shoring and Vertical Integration

• Reduce dependency on distant suppliers by bringing production closer to key markets.
• Implement vertical integration—brands like Zara control multiple stages of production, allowing for better oversight and faster market response.

Luxury brand Brunello Cucinelli has strengthened its Italian supply chain, investing in local suppliers to reduce lead times and ensure quality control.

Unifying Fashion Supply Chains for Growth

In an era of heightened risk, regulatory shifts, and consumer demand for transparency, brands must take proactive steps to de-fragment their supply chains. 

Noatum Logistics provides industry-leading expertise in supply chain optimisation, offering:

• End-to-end supply chain visibility—leveraging AI, blockchain, and real-time tracking.
• Multi-tier supplier collaboration—ensuring seamless communication across sourcing, production, and logistics.
• Near-shoring solutions—helping brands reduce lead times and logistics costs by shifting production closer to key markets.
• Sustainability-driven compliance—supporting brands with Digital Product Passports and Extended Producer Responsibility (EPR) strategies.

Discover how Noatum Logistics can help you streamline and unify your supply chain.