John Lash heads up Product Strategy at e2open. Previously, he led Product Marketing, including analyst relations, competitive intelligence, and ESG-related product initiatives. Lash has held leadership positions in environmental sustainability, high-tech, and data communications industries, with over 30 years of experience in business development, strategy, sales, marketing, and mergers and acquisitions.
The only constant is change. To this end, it’s important for companies to keep up-to-date on geopolitical issues and legislation that could impact their supply chains. The Americas Trade and Investment Act is a new bill introduced by Senators Bill Cassidy and Michael Bennet that aims to reduce trade dependency with China, strengthen relations with Western Hemisphere countries, encourage a circular apparel industry, and lessen exposure to forced labor. If passed, the Americas Act would be the latest change in the U.S.’s complicated and fluid trade relationship with China. It also presents opportunities for more ethical sourcing and a new circular domestic textiles industry. Sounds promising, but will it deliver?
To answer this question, let's wind back the clock to consider where the U.S. is at today. During the past three decades, outsourced production, containerization, and favorable trade policies ushered in an era of globalization. Low-cost goods brought tremendous benefits to people and nations alike, to the point where consumers are now a main driver of the economy. Case in point, in the U.S., roughly two-thirds of the gross domestic product (GDP) comes from consumer spending. As brands outsourced production to make low-cost goods, China emerged as the world's manufacturing powerhouse, especially in the apparel, high-tech, and semiconductor industries.
In the apparel and footwear sector, the sheer scale of Chinese manufacturing and supply chain infrastructure led to a step-change in efficiency that was irresistible for many Western brands. Reliably available low-cost items fundamentally changed consumer expectations, reset the norm, and paved the way for fast fashion.
However, this trajectory has been shadowed by mounting national security concerns, geopolitical tensions, and a drive toward greater sustainability and more ethical sourcing. These forces have given rise to initiatives like the Americas Act and are signaling a shift towards more regional and sustainable production.
Promoting reshoring and nearshoring
At its core, the Americas Act is designed to reduce U.S. dependence on foreign adversaries by promoting reshoring/nearshoring away from China and strengthening trade ties with Western Hemisphere countries. The act seeks to bring jobs, wealth, and regional stability to the Americas region, increasing the standard of living in Latin American countries and reducing the appeal of migration to the U.S. This inherent immigration aspect makes it politically appealing, even in a divided Congress. The act also intends to be cost-neutral and self-funded by closing the de minimus loophole, which currently lets cheap goods from China evade tariffs. As such, this act provides multiple wins politically.
The primary mechanism of the Americas Act is to expand eligibility for the United States–Mexico–Canada Agreement (USMCA) to include countries in Central and South America. It also includes $70 billion of loans, grants, tax incentives, and investments to promote reshoring/nearshoring away from China.
Is this likely to change trade dynamics with China?
When it comes to reducing dependence on China, will the Americas Act shift the needle? The simple answer is yes, but not on its own. While this type of policy is an important step in the right direction, it won't be enough.
The act will definitely promote trade between the U.S. and Western Hemisphere countries by spurring more investment in regional production and strengthening supply chains. However, even if the program eventually doubles or triples trade between the United States and Central and Southern American countries, it would have a limited impact on reducing the U.S.’s dependence on China anytime soon.
Regarding U.S. textile imports, only three of the top 15 export countries are in the Western Hemisphere, and these three countries only represent 7% of imports, compared to 74% from Asian countries. Moreover, two of those three countries, Mexico and Canada, are already part of the USMCA. While they would benefit from funding to grow operations, they would not be new country additions to the trade agreement. Honduras is the only new country in the top 15 that qualifies for entry via the Americas Act, with textile and apparel imports of roughly 4% of China.
Even if every country in the Western Hemisphere signed on and doubled their exports of goods to the U.S., it would barely dent the trade from China.
Days of easy globalization are over
While investment in reshoring/nearshoring willhelp make the U.S. less dependent on Chinese manufacturing, unwinding decades of established infrastructure and gearing up production, supply chains, and skilled workforces in new countries will take decades. Just as it took years of policy to promote coupling between China and the United States, decoupling those relationships will also take a long time. Furthermore, the decoupling process is complicated by these times of volatility and rising geopolitical tension.
Transitioning from today’s complex interdependent supply chains will require considerable policy adjustments beyond the Americas Act, including new proposals to strengthen trade with top non-Chinese Asian exporting countries, which comprise most of the U.S.’s imports.
One thing is for sure: This act is yet another telltale sign that the days of "easy" globalization are over.
Incentives for circularity and ethical trade
In addition to the political aspects, the act directs $14 billion—one-fifth of the proposed funding—toward promoting circularity in domestic textiles, apparel, and footwear industries. Circularity, also known as reuse and recycling, is an important means to reduce the high levels of landfill waste, emissions, and freshwater consumption associated with the industry.
Additionally, to foster ethical supply chains, the act includes $750 million in funding over five years to strengthen U.S. Customs and Border Protection's power to crack down on goods made by forced labor in Chinese factories through the Uyghur Forced Labor Prevention Act.
New opportunity for a circular apparel economy
Circular policies that support reuse and recycling offer undeniable economic benefits, regardless of trade politics. It reduces raw materials and extraction/processing costs per unit, letting you make more with less. In an era of supply constraints and limited materials, making smarter decisions about using and reusing resources is important to ensure we can provide housing, clothing, and food for more people at lower costs.
Regarding apparel and footwear, reusing textile fibers also reduces emissions, water use, deforestation, and biodiversity loss. It's a win-win all around: lowering costs and promoting growth, helping brands realize net-zero goals, and offering consumers more sustainable options.
Policy and incentives to promote circularity in textiles, like those in the act, will be instrumental in establishing reuse and recycling programs. However, results won't happen overnight. It will take time for the industry to ramp up at scale and even more time to change consumer behavior. For example, when did you last bring an old shirt or sock with a hole to a fiber recycling bin? Many consumers likely don't know where to find a fiber bin, let alone are actively using one.
Net-positive change
Despite these complexities, the Americas Act offers tangible benefits to the U.S., Western Hemisphere nations, and the apparel industry at large. It's part of a larger shift underway toward a more regional type of globalization than in prior decades, with more sustainable and circular practices and a more ethical supply chain free of forced labor—one in which apparel plays center stage.
Long story short, if passed, the Americas Act is an important step in the right direction. The one caveat is not to count on it as a silver bullet but rather one of several deliberate actions to create a meaningful and positive change.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
The practice consists of 5,000 professionals from Accenture and from Avanade—the consulting firm’s joint venture with Microsoft. They will be supported by Microsoft product specialists who will work closely with the Accenture Center for Advanced AI. Together, that group will collaborate on AI and Copilot agent templates, extensions, plugins, and connectors to help organizations leverage their data and gen AI to reduce costs, improve efficiencies and drive growth, they said on Thursday.
Accenture and Avanade say they have already developed some AI tools for these applications. For example, a supplier discovery and risk agent can deliver real-time market insights, agile supply chain responses, and better vendor selection, which could result in up to 15% cost savings. And a procure-to-pay agent could improve efficiency by up to 40% and enhance vendor relations and satisfaction by addressing urgent payment requirements and avoiding disruptions of key services
Likewise, they have also built solutions for clients using Microsoft 365 Copilot technology. For example, they have created Copilots for a variety of industries and functions including finance, manufacturing, supply chain, retail, and consumer goods and healthcare.
Another part of the new practice will be educating clients how to use the technology, using an “Azure Generative AI Engineer Nanodegree program” to teach users how to design, build, and operationalize AI-driven applications on Azure, Microsoft’s cloud computing platform. The online classes will teach learners how to use AI models to solve real-world problems through automation, data insights, and generative AI solutions, the firms said.
“We are pleased to deepen our collaboration with Accenture to help our mutual customers develop AI-first business processes responsibly and securely, while helping them drive market differentiation,” Judson Althoff, executive vice president and chief commercial officer at Microsoft, said in a release. “By bringing together Copilots and human ambition, paired with the autonomous capabilities of an agent, we can accelerate AI transformation for organizations across industries and help them realize successful business outcomes through pragmatic innovation.”
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use artificial intelligence-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next one to three years. Retailers also said they plan to invest in self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) within the next three years to help with loss prevention.
Those strategies could help improve the brick-and-mortar shopping experience, as 78% of shoppers say it’s annoying when products are locked up or secured within cases. Part of that frustration, according to consumers, is fueled by the extra time it takes to find an associate to them unlock those cases. Seventy percent of consumers say they have trouble finding sales associates to help them during in-store shopping. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
Additional areas of frustrations identified by retailers and associates include:
The difficulty of implementing "click and collect" or in-story returns, despite high shopper demand for them;
The struggle to confirm current inventory and pricing;
Lingering labor shortages; and
Increasing loss incidents.
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.