How Technology is Shaping Apparel Sector Supply Chains in Sri Lanka: Shifting to Nearshoring and Reshoring

Advances in technology have made nearshoring – the practice of shifting production operations to a nearby country closer to the end market – and reshoring – bringing back offshore production back to the home country – more viable for apparel manufacturers, compared to offshoring production to far-away, developing countries. For instance, ‘SewBots’ – robots that are capable of sewing – in a planned factory in Little Rock, Arkansas, are expected to produce t-shirts at USD 0.33 each, which is lower than the current cost of production in low-cost countries.

While such technologies are likely to have significant implications for supply chains, whether their application leads to relocation of production depends on the product and factors like the importance of speed to market for product competitiveness and production and trade costs in offshore markets. This blog examines the implications of tech-led supply chain changes on Sri Lanka’s apparel industry and argues that it is important to prepare early for forthcoming changes through a holistic approach, engaging a spectrum of stakeholders to improve the competitiveness of the industry. Prioritising investment in innovation and skills and improving the efficiency of business processes is critical for Sri Lanka’s apparel industry to remain competitive in the changing tech-landscape.