Apparel Industry's Global Supply Chain at Risk

The number of suppliers actively serving the U.S. apparel industry has dropped more than 70% in three months, according to an analysis released Monday.
 

The news comes as e-commerce sites try to draw online shoppers during the last days of the holiday shopping season. Panjiva, a company that collects and disseminates data on global suppliers and manufacturers, said Monday that the economic downturn has pushed down the number of suppliers actively serving the U.S. market, from 22,099 in July to 6,262 in October.
 

Of those still serving the United States, 40% are on Panjiva's Watch List for year-over-year losses of 75% or more in shipping volume. A separate index that measures risk in the global supply chain has shot up from 24 at the end of July to 43 at the end of October.
 

"These numbers paint a frightening picture of the state of the world's suppliers," Panjiva CEO Josh Green said in a statement released Monday. "U.S. companies who maintain their customer base through the economic downturn may nevertheless find their survival threatened by the disappearance of their supplier base."
 

Panjiva offers new services that help companies identify risky and healthy suppliers.
 

The company cited statistics from a July 2008 survey and a supply chain risk management report from Aberdeen Research and said that 58% of respondents "suffered financial loss because of supply chain disruptions."
 

Panjiva uses technology developed by experts from MIT to track shipments and alert companies when suppliers land on its watch list. It also notifies customers when a supplier lands a significant new customer, operates above capacity, or appears to be in a position that would make it likely to negotiate prices.
 

The company also offers a supplier search tool that screens tens of thousands of suppliers, shows which buyers a supplier has worked with and when, provides information on competitors' supply bases, and tells companies where a specific product was made.