Supply Chain Risk Assessment in Fashion Brands Starts with Data

From fluctuating raw material prices to unforeseen disruptions in manufacturing hubs, the fashion industry continuously faces challenges that underscore the fragility of global supply chains.

Volatile cotton prices are a recent example: in 2024, international cotton prices, influenced by increased production yields and shifting demand patterns, fell significantly. 

But this is certainly not the only example signaling how often fashion brands must navigate everything from production costs to inventory planning amidst a landscape rife with uncertainties.

Like the tragic Rana Plaza collapse in 2013, which, even today, serves as a stark reminder of the potential human and reputational costs associated with supply chain oversights. And, while this event occurred over a decade ago, its lessons remain pertinent, emphasizing the need for transparency and proactive risk management in supply chains.

While many brands talk about resilience, few can accurately assess the real risks embedded in their supply chain or predict how those risks might impact lead times, reputation, or compliance later on.

The gap? Reliable, real-time data.

Without clear visibility into supplier tiers, sourcing origins, and performance indicators, disruption cannot be anticipated, let alone prevented. Risk assessment is no longer a once-a-year compliance task; it’s a business-critical capability.

In this article, we’ll explore why fashion brands must treat supply chain risk assessment as a core function — and how data-driven strategies can turn uncertainty into a strategic advantage. 

The Critical Role of Data in Managing Supply Chain Risk

What complicates risk management for fashion brands is the broad scope of threats: from geopolitical tensions and extreme weather to labour violations, factory fires, or unethical subcontracting buried deep in opaque supply chains. 

Fashion brands operate within intricate, global supply chains that are increasingly susceptible to a myriad of risks. These include:

• Geopolitical instability: Trade disputes and political unrest can disrupt supply routes and sourcing strategies.

• Climate change: Extreme weather events threaten raw material availability and production schedules.

• Labour violations: Unethical practices in supplier factories can lead to reputational damage and legal consequences.

• Regulatory compliance: Evolving laws require transparency and accountability across all supply chain tiers.

• Ensure compliance: Meet regulatory requirements by providing verifiable data on sourcing and production.

Most brands lack the system-wide transparency to identify these threats early. And that’s where data becomes the differentiator. To navigate these challenges, accurate, real-time data enables brands to:

• Identify vulnerabilities: Pinpoint weak links in the supply chain before they lead to disruptions.

• Enhance transparency: Gain visibility into all supplier tiers, ensuring compliance and ethical practices.

• Optimize Decision-Making: Make informed choices regarding sourcing, inventory, and logistics.

• Ensure Compliance: Meet regulatory requirements by providing verifiable data on sourcing and production.

In essence, supply chain risk assessment, underpinned by reliable data, is not just a compliance exercise but a strategic imperative that safeguards brand reputation, ensures operational continuity, and fosters consumer trust.

Risk assessment becomes less about predicting power and more about using credible, high-quality data to anticipate where, when, and how disruptions might occur — and building contingency plans before they cost you.

The business case is clear: brands prioritizing supply chain risk assessment gain faster response times, stronger supplier relationships, and a measurable reduction in lost revenue. And that’s important because, as the next section shows, the cost of inaction is rising.

Turning Insight into Action: Best Practices for Fashion Brands Using Data to Decrease Risk

At its core, risk reduction is an operational discipline. It requires brands to treat data not as an after-the-fact reporting mechanism, but as a real-time input that shapes everything from sourcing decisions to shipment routing to capacity planning. 

The good news: fashion companies don’t need to overhaul their entire tech stack to get started. Instead, risk mitigation begins by embedding data-driven best practices into key operational touchpoints.

The following four best practices show how data can be used to flag problems and preempt them, giving fashion brands the agility and foresight needed to protect margins, preserve brand trust, and build long-term resilience.

1) Enable Tracking and Monitoring Across the Shipment Journey

Traditional tracking methods, often reliant on manual updates and siloed systems, can leave brands blind to delays, damages, or diversions until it's too late. 

Real-time tracking and monitoring technologies are transforming this landscape, providing end-to-end visibility that enables proactive decision-making and enhances operational efficiency.

Implementing IoT-enabled tracking devices

Internet of Things (IoT) devices, such as GPS trackers and RFID tags, are being widely adopted to monitor the location and condition of goods throughout the supply chain. These devices can provide continuous temperature, humidity, and movement updates, particularly valuable for sensitive materials like leather or perishable items.

Leveraging real-time data for proactive management

Real-time tracking data allows supply chain managers to anticipate and mitigate potential disruptions. For instance, if a shipment is delayed due to unforeseen circumstances, real-time alerts enable managers to reroute deliveries, communicate with stakeholders, and adjust inventory plans accordingly. This proactive approach reduces the risk of stockouts, overstocking, and customer dissatisfaction.

Case Study: SmartSense by Digi

SmartSense's T1 sensors are equipped with GPS and global cellular connectivity, offering continuous updates on the location and condition of assets. This level of oversight helps businesses confidently tackle complex logistical challenges, ensuring that high-value fashion items are monitored throughout their journey.

Best practices for implementation

• Integrate tracking systems with supply chain platforms: Ensure that IoT devices and tracking data are integrated with your existing supply chain management systems for seamless data flow and analysis.

• Establish clear protocols for data use: Define how real-time data will be used in decision-making processes, including who has access to the data and how alerts are managed.

• Train staff on new technologies: Provide training for relevant personnel to effectively use and respond to real-time tracking information.

• Regularly review and update tracking strategies: Continuously assess the effectiveness of tracking technologies and strategies, making adjustments as needed to address evolving challenges and opportunities.

2) Rely On Real-Time Insights to Optimize Inventory Levels and Reduce Waste

For fashion brands, inventory has always been a double-edged sword: too much, and you tie up capital in unsold stock that ends up in landfills; too little, and you risk stockouts, missed sales, and frustrated customers. The solution isn’t just better forecasting — it’s real-time visibility into inventory across the entire supply chain.

Traditional inventory planning methods often rely on historical sales data, seasonal patterns, or spreadsheets updated weekly at best. 

But real-time supply chain visibility flips that model. 

Instead of reacting to inventory issues after they happen, fashion brands can now dynamically adjust stock levels based on up-to-the-minute insights from warehouses, in-transit shipments, supplier delays, or even shifts in consumer demand.

Zara, for instance, is a long-time pioneer in responsive inventory. 

While not using the term “real-time visibility” explicitly, their model depends on continuous feedback loops from stores and logistics hubs to design, replenish, and reallocate products multiple times per season. 

This agility enables them to reduce overproduction and markdowns — a strategy that has helped parent company Inditex maintain inventory-to-sales ratios far below the industry average.

More recently, brands are leveraging real-time data from RFID tags, IoT sensors, and cloud-based platforms to fine-tune inventory control. 

For example, Avery Dennison’s RFID solutions allow brands like Adidas and Decathlon to see exactly where products are at any given moment — in transit, in stores, or sitting in a warehouse. This level of granularity lets operations teams shift inventory between regions, reallocate excess stock, or even pause production upstream if trends show a dip in demand.

Here are three practical actions ESG managers and operations leads can take to implement real-time inventory optimization:

• Integrate POS, e-commerce, and warehouse management systems into a unified dashboard. This enables real-time stock level monitoring across all sales and fulfillment channels, including retail and DTC. Tools like Oracle NetSuite and Manhattan Associates offer real-time inventory modules that sync data across systems.

• Use predictive analytics and anomaly detection to spot emerging demand shifts. When paired with visibility tools, AI-based forecasting platforms like o9 Solutions or Blue Yonder can analyze real-time signals (e.g., weather changes, promotional spikes, or supplier slowdowns) and recommend restock or markdown actions — well before problems hit.

• Collaborate with suppliers to create a shared view of inventory status. Visibility into supplier stock levels can help brands anticipate shortages or overages and adjust purchase orders before it's too late, especially for raw materials or components (such as soles, trims, or textiles).

3) Enhance Delivery Performance and Reduce Delays Through Better Planning

Traditional delivery planning is often static and disconnected. Brands create shipment schedules based on lead times and carrier availability, but once goods leave the factory, they lose sight of them until the delivery window closes or a crisis occurs. This reactive posture leaves no room to adjust for port congestion, weather events, or customs holdups.

By contrast, real-time visibility allows brands to shift from reactive firefighting to proactive delivery management. 

Knowing where shipments are at all times — and being alerted the moment something deviates from plan — enables logistics teams to intervene early, reroute cargo, or notify retail partners of delays before they impact shelf dates.

Take PVH Corp. (parent company of Tommy Hilfiger and Calvin Klein), which implemented FourKites to gain real-time multimodal shipment tracking. This move allowed their teams to proactively manage delays and collaborate with freight forwarders and suppliers when transit times began to slip, reducing expedited freight costs and improving on-time delivery rates across key markets.

Real-time delivery performance also depends on having shared ETAs across departments and partners. Brands like VF Corporation (home to Vans, The North Face, Timberland) have moved toward centralized supply chain visibility platforms that unify planning and logistics — ensuring that merchandising, production, and retail operations are all working off the same timeline. 

This level of integration minimizes miscommunication and ensures delivery expectations are realistic and achievable.

To achieve these kinds of improvements, fashion brands can take the following steps:

• Implement shipment tracking tools that offer real-time location and ETA updates. Platforms like project44, FourKites, and Flexport provide GPS and carrier-integrated tracking across sea, air, and land, so brands can monitor delays and arrival windows without manual check-ins.

• Create cross-functional delivery planning workflows. By aligning inventory managers, merchandisers, and logistics planners around shared visibility dashboards, brands can identify supply chain bottlenecks earlier and make faster decisions, such as rebalancing store deliveries or updating launch timelines.

• Use dynamic risk-based routing to prevent disruptions. Some visibility platforms now use AI to flag high-risk shipments (e.g., those crossing the Suez Canal during geopolitical unrest) and suggest alternate routes or modes before delays materialize.

4) Integrate IoT, Software, and Platforms for Real-Time Decision-Making

Data alone doesn’t drive smarter supply chains — it’s how fast that data flows, how easily it’s accessed, and how intelligently it’s applied. That’s why real-time decision-making in fashion increasingly depends on integrated ecosystems that connect IoT devices, software platforms, and predictive analytics into one cohesive source of truth.

The key is convergence. Fragmented systems — one for factory production, another for logistics, another for warehouse inventory — create information silos and delay response times. In a volatile supply chain, disconnected data means missed opportunities: to flag an early production issue, reroute a shipment, or adjust inventory replenishment based on shifting demand.

IoT (Internet of Things) is central in bridging this gap. Smart sensors embedded in containers, pallets, or even individual SKUs can transmit location, temperature, humidity, and shock data in real time. This is especially valuable for fashion brands managing delicate or high-value products that require secure and stable transport conditions.

For example, Ralph Lauren has used IoT-powered RFID (radio-frequency identification) tagging across distribution centers and retail stores to improve item-level inventory accuracy and enable faster, data-driven restocking decisions. This same visibility infrastructure is now being extended upstream into logistics operations, offering a clearer picture of inbound shipments and enabling more agile allocation.

But IoT is just one piece. Platforms like SAP Integrated Business Planning (IBP), o9 Solutions, and Oracle SCM Cloud are helping brands unify disparate data — from production forecasts and supplier milestones to shipment ETAs and inventory levels — into a single real-time dashboard. 

This not only reduces latency in decision-making, but it also allows for automated workflows: rerouting delayed goods, triggering reorder points, or notifying sourcing teams of potential disruptions without manual intervention.

To begin realizing these benefits, fashion brands should:

• Invest in IoT solutions with integrated APIs. These devices — such as GPS tags, RFID, or environmental sensors — should feed directly into existing ERP or supply chain visibility systems, eliminating the need for manual data consolidation.

• Adopt supply chain control towers or centralized dashboards. These real-time platforms aggregate data across suppliers, carriers, and internal systems to offer end-to-end visibility and contextual alerts.

• Automate key decision workflows. From dynamic safety stock adjustments to transport rebooking, automation ensures the business can respond to events faster than human teams alone, especially when timing is critical.

Final Thoughts: Turning Data into a Competitive Advantage

In today’s volatile supply landscape, fashion brands can no longer afford to treat risk as a reactive function. From raw material disruptions to regulatory shifts and reputational fallout, the stakes have never been higher, and neither has the opportunity for those who use data proactively.

The brands that will lead tomorrow’s fashion industry aren’t just the ones that report on supply chain risk — they’re the ones that can predict, adapt to, and outmaneuver it. Supply chain data becomes more than a compliance necessity with the right tools, visibility, and strategies. It becomes a competitive advantage.

Key Takeaways:

• Risk in fashion is multidimensional — from operational and financial disruptions to ethical and environmental violations. A fragmented supply chain only amplifies exposure to these threats.

• Supply chain risk assessment starts with data. Structured, high-quality, real-time information is critical for identifying vulnerabilities, measuring impact, and making more intelligent decisions.

• Insight without action leads nowhere. Brands must turn visibility into a tactical asset to improve shipment tracking, optimize inventory, strengthen supplier relationships, and improve planning precision.

• A straightforward, step-by-step approach can help de-risk supply chains. Best-in-class brands map their value chains, score supplier risk, and embed monitoring tools that create feedback loops between digital data and real-world conditions.

• Those who use data well will outperform. Beyond mitigating downside risks, brands that operationalize supply chain insights gain speed, agility, and customer trust — all of which translate to measurable business value.

Fashion’s future belongs to the brands that see risk as a solvable problem — and data as the most powerful tool for solving it.