Procurement professionals at fashion retailer H&M are taking supplier relationship management to a new level, courtesy of artificial intelligence (AI) technology.
The retailer has pledged that 100% of its offering will be made from recycled or sustainable materials throughout its supply chain by 2030.
Speaking at the National Retail Federation’s Big Show in New York City this week, Arti Zeighami, H&M’s global head of advanced analytics and AI (a department created in 2018), explained that AI and predictive technology now have a major role to play in rendering all supply chains sustainable, not only those confined to the fashion industry.
Data analytics, he continued, allows companies to ensure that the right product is in the right place at the right time.
Two hundred seventy people at H&M are now applying AI tech to multiple segments of the firm to ensure that decisions are as data-driven as possible.
The technology delivers precision forecasting, allowing supply chain managers to use only the resources they require with no excess.
Prior to this kind of data-rooted demand planning, waste was inevitable, Zeighami added.
Waste has been a major issue for the fashion industry.
Danish journalists, for example, alleged that H&M burned 12 tonnes of unsold clothes in 2017 – the retailer denies this claim though and insists that the materials were incinerated because they were damaged.
Yet H&M isn’t the only high-profile name to have such allegations levelled against it.
Revelations in recent years have shown that a number of other brands have burned clothing in an effort to dispose of excess and unproductive inventory.
It’s not much of an exaggeration to claim that waste has been rampant in the fashion industry.
Zeighami aims to bring this era to an end with AI, by ensuring that the strategic sourcing of sustainable materials is augmented by smart supply chain management to pare down the use of resources to what is necessary only.
The knock-on effects are also desirable: fewer emissions and much less waste.