According to JLL's study, "The State of European Supply Chains in 2022," European supply chains have been on a path toward greater optimization and restructuring over the past year.
Among other things, this work points out that the consequences of the Russian invasion of Ukraine are a major concern for 68% of companies in the Old Continent. The analysis reveals that 51% of the companies surveyed plan to optimize their supply chains by setting up warehouses in new locations, preferring sites close to transport hubs and end markets.
The consultant therefore estimates that, given that developable land is scarce in these locations, it is likely that much of the existing park will need to be renovated to meet the demands of users who want higher quality, automation and high sustainability standards.
The report also shows that inflationary pressures are influencing tenants' decisions, particularly regarding transportation networks (72%) and energy consumption (63%). Regarding the short-term evolution of the sector, the paper claims that demand is expected to remain stable over the next six to nine months, as users develop different strategies to manage their stock.
In this context, the slowdown in inflation also explains why 81% of respondents expect to pass on only part of the costs to customers during the year. At the same time, lower freight rates and a slowdown in the industrial space market are expected to provide some relief to European supply chains in the second half of the year.
Technology is Essential for Managing the Luxury and Fashion Supply Chain
The luxury and fashion industry has been shaken by a series of crises for more than two years. Various economic but also structural factors, with the need to move towards sustainable development, are forcing companies to review the functioning of their supply chain, which has become the new target in the face of war. To control this ecosystem, they are increasingly turning to digital and new technologies.
Today, the sector is facing a cascade of problems and turbulence that make the system much more unstable, especially in the early stages of the chain. Just as the market was moving towards a post-pandemic recovery, supply difficulties arose. The explosion in demand, after two years of continuous decline that had slowed the supply chain considerably, led to a shortage of raw materials.
The situation was aggravated by massive confinements in China, related to an increase in Covid cases, which blocked part of the production and the port of Shanghai, slowing down the transport of goods.
Versace is Transforming its Supply Chain
For example, Versace, one of Italy's most recognized luxury brands, is transforming its supply chain to deliver a flexible and connected shopping experience to better serve its global audience across stores and e-commerce. The leading international fashion company leveraged Oracle Retail Xstore technology to redesign omnichannel operations, improve store employee efficiency and optimize mobile engagement.
With these technology solutions, brands build capabilities to listen and understand the new consumer with the goal of offering totally innovative, value-added products that differentiate themselves from the competition and adapt to new consumer habits. Versace is LEED Certified, as the facilities in its chain provide an effective framework for carbon and cost-saving green buildings.