By Saskia van Gendt
The global fashion industry is grappling with a massive oversupply problem, with over 2.5 billion excess items going unsold annually. Worth between $70 billion and $140 billion in sales, this issue also brings major environmental consequences, including vast clothing landfills so large they can be seen from space. Indeed, the fashion industry is responsible for significant global greenhouse gas emissions, while the consequences of chronic oversupply mean that 25 percent of clothing is incinerated or landfilled at the end of its life.
In response, regulations are tightening, with new laws in California and Europe requiring brands to take responsibility for their waste and banning the disposal of unsold inventory. The European Parliament has signed new rules requiring fashion brands to cover the full cost of their fashion waste in a bid to curb the mounting textile waste across the region. But while companies have compelling sustainability and business reasons to address the problem, where do they start? In the textile industry, the sheer scale of overproduction and waste means neither the industry nor consumers can recycle their way out of the problem; something else has to give, and on a scale that can close the production-consumption gap.
Supply Chain Pain
At the heart of the matter is the fashion industry’s vast and highly interconnected supply chains. From sourcing the raw materials, through production processes and shipping to retailers or consumers, the fashion industry relies on ways of working established over many decades while attempting to operate at unprecedented speed and agility.
This global infrastructure has evolved to service the sector’s perpetual cycle of renewal, with designers and retailers racing to create and capitalize on the new trends that drive consumer spending. For designers and retailers, swimming against this tide is an extremely risky business proposition, which goes some way to explaining why the industry remains stuck in its overproduction loop.
That’s not to say the issues are being ignored. Many fashion brands are differentiating through more responsible and transparent practices and gaining market share. At the same time, the second-hand clothing market has gone mainstream, despite a report by the BBC indicating that few businesses in this market niche are actually turning a profit.
AI is the new black
However, to truly turn the tide, waste must be minimized before it even enters the supply chain in the first place. The issues associated with inefficient inventory management offer a transformational opportunity to cut overproduction at source. This starts with a technology-led approach to understanding the nature of the inventory management problem, where inefficiencies and bottlenecks occur, and how to address them.
Like many other sectors across the contemporary economy, fashion is turning to Artificial Intelligence and Machine Learning systems to overcome the limitations of traditional processes. When integrated with high-quality data from key points across the supply chain, organizations can get a complete picture of their sustainability challenges at any given time. Armed with this insight, they can then take predictive or remedial action in cooperation with suppliers and partners to prevent overproduction.
Scenario planning is an excellent example of the tools now available. By modeling how changes in production and supply levels impact inventory data, fashion businesses can make informed strategic decisions that positively impact waste levels and environmental performance. In doing so, they can more closely integrate business and sustainability objectives based on a real-world understanding of the opportunities for improvement.
The most advanced systems offer end-to-end capabilities which integrate supply chain data from key stakeholders. This is key to ensuring that sustainability performance becomes a shared responsibility across business functions — something that the industry as a whole currently struggles to achieve.
Balancing Supply And Demand
The potential for delivering major improvements in performance is very real. Just as the fashion industry is awash with products that not enough people want to buy, there is also no shortage of the data required to deliver the level of change required.
In this context, exploiting data-driven supply chain insights can give organizations the kind of agility to align supply and demand in a way that eliminates the guesswork from production. In practical terms, any fashion business that utilizes the power of AI and ML to make informed decisions about what to produce and in what quantities is better positioned to succeed.
From sourcing raw materials at one end of the process to sales at the other, fashion businesses can also feed data back into their planning at every key stage. This helps create a virtuous circle where both business and sustainability performance are optimized, while consumers still get the fast fashion products they want, minus the worst environmental excesses that currently blight the industry.
Saskia van Gendt, is chief sustainability officer at Blue Yonder Group Inc., a Scottsdale, Ariz.-based supply chain management company.
September 30, 2025
