Mango and Sustainable Fashion Sourcing Strategies | In Practise

Mango and Sustainable Fashion Sourcing Strategies

Former Global Head of Buying and Sourcing at Mango and Buying Manager at Inditex

Learning outcomes

  • The differences in Mango and Zara's supply chain
  • How fashion retailers are changing the way they work with suppliers
  • Cost pressures throughout the fashion supply chain
  • Biggest challenges for fashion retail suppliers today
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Executive Bio

Alessandro Bertini

Former Global Head of Buying and Sourcing at Mango and Buying Manager at Inditex

Alex has over 25 years experience in buying and sourcing and over 15 years specifically for leading fashion retail brands. In 2004, he joined Mango as a Senior Buyer where he was responsible for the entire buying process of finished garments and materials. Alex spent over 10 years at Mango, rising to Buying Manager at Massimo Dutti, a leading brand of Inditex. Alex currently leads Buying for Womenswear at Zalando. Read more

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Alex, could you briefly explain how Mango’s supply chain is structured?

Mango works with a couple of different supply chain models. There are two principle ones and then, within each of these two models, there are some sub-differences. The principle model is the model that is most commonly employed in the industry which is having a number of finished good suppliers that will produce the finished garments, according to Mango’s specifications and requirements.

We can get a little bit more in depth in this, just to give you a general overview. It is true that Mango buys finished products, in this model. But Mango is also heavily involved in the selection of the materials that go towards making the finished garment, such as the fabrics. In some cases, they go as far as actually buying the fabrics that will then be used by the finished garment suppliers. This is one of the models that Mango adopts which, as I said, is fairly common in the industry.

They also adopt a second model, which is also not unusual, but at the same time, not employed by the majority of large retailers. This is the model where they carry out their own production. Mango has contracts with, typically, smaller-sized factories, both in Asia and also closer to their home, in North Africa. They will buy the fabrics and all necessary accessories, such as zippers, themselves, to create the finished garment. Mango will take care of the shipment of these components to the factory, let’s say, in Morocco, in North Africa, where they will be assembled and then shipped back to Mango’s warehouse in southern Spain.

What proportion of the total volume is split between those two models?

It depends, very much, on the type of product. As an overall view, today, probably about 35% to 40% of Mango’s production comes from the second model, meaning they do it themselves; they have their own factory doing that.

What have been the major changes in fashion retail supply chains, over the last decade or so?

There was a big shift, a few years back, from the Far East production, which is still a fairly large part of a retailer’s production base, but less so than it used to be about 10 or 15 years ago. The shift has now been closer to home as prices, in China especially, have risen. The standard of living in China has been going up, wages have been going up steadily, over the last few years. Therefore, the cost of manufacturing garments has also risen. Retailers have seen fewer and fewer reasons to go for the saving, in terms of cost, by producing in China. They have been going for the slightly more expensive production, closer to home. In the case of Mango, for instance, or Zara, we are talking about the Mediterranean region. Again, a little bit more expensive, compared to China, but at the same time, you are much closer, which gives you some other advantages that, of course, are worth money. For example, reaction times in being able to be closer to the fashion.

Last but not least, one of the other advantages is that if you go and buy, particularly in China, or in Bangladesh in some cases, you will, typically, deal with large factories, which are set up to do a large-run production. Whereas, if you produce closer to home, often, your minimum quantity requirements are lower and that also gives the retailer a little bit more flexibility, when it comes to deciding what is a winning product and being able to make some kind of test for the product, before putting all your money into it.

So it is likely that the retailer would use the Far East, large scale, buying deep, for outerwear or jackets and those items which are always in stock or with stable demand? Then moving closer to home, you have the more fashionable, trendy items of clothing?

That’s a pretty good generalization. You have two main reasons why you are producing in one country, rather than another such as the Far East or, let’s say, Turkey or maybe some European production. One of the reasons is just that you are faster to the market and you are able to order smaller quantities at any one time. The other reason is also that there are some specializations, in terms of what garments are made in each country. You will find that for heavily constructed garments, such as outerwear, which have a lot of components, you don’t typically want to try and produce that in a country like Turkey, closer to home, because the cost advantage is still very much with the Far East, with regards to that.

What are the major challenges to build a sustainable sourcing strategy today?

When you’re talking about a sustainable sourcing strategy, you don’t mean sustainable, in terms of sustainable materials? You mean sustainable, in terms of something that holds up in the long term? Sustainability now, is obviously a very big topic, so I just want to make sure.

How do you look at sustainability in fashion today?

Sustainability, from the point of view of sustainable products, is something that’s become very, very strong in the last 12 months. It’s something that’s been growing for a long time, but it’s only become a real issue relatively recently. There is now a real rush, from all retailers, to have a sustainable range of products, as fast as they can. It’s something that is still maturing, but it’s maturing fast. I know for a fact, because I was involved in it, that up until eight, nine months ago you could find suppliers that, literally, had no idea where to start, with sustainability. Now, it’s rare to find a supplier that doesn’t know what it is, or has not already taken measures to be able to produce sustainable products.

This has provoked a very big change in the industry, over the last few months. It’s something that we will see more and more and there is a real demand for it, from a customer point of view, obviously in some countries, more than in others. This tends to be more of a northern European phenomenon, rather than a southern European one. But it is extending very fast and, as we know, Zara has pledged to it, a couple of months back, so this is going to spread very, very fast.

What measures have been put in place to bring the suppliers up to speed with sustainability?

There’s a big push from the retailers themselves, to educate the suppliers, because really, it’s not major changes that a supplier needs to make, in terms of their own production set up, to be able to produce a sustainable product. It has to do, to a greater extent, with where they source their fabrics or their components from. It doesn’t involve a lot of investment for the supplier; it just involves more education. There is a push from the retailer to educate suppliers as to what it’s about and what they need. That’s probably the major push and, obviously, there is a demand for that and that creates incentive for the suppliers to come up with products.

That’s using the finished good supply chain, where you’re using a supplier to source the fabric, manufacture the goods and then ship it, based on your design and terms?

Yes.

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Mango and Sustainable Fashion Sourcing Strategies

December 6, 2019

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