Apurva Kanyalkarᵃ, Ravindra V. Adivarekarᵇ and Saptarshi Maitiᵇ

ᵃ Demand & Inventory Planning, Coach, New York
ᵇ Department of Fibres and Textile Processing Technology, Institute of Chemical Technology, Matunga (E), Mumbai – 400 019, India

*Corresponding author(s): rv.adivarekar@ictmumbai.edu.in, maiti.sapta@gmail.com 

Abstract:

The Leather and Fabric Goods Industry (L&FGI) is projected to grow from USD 1.0 trillion in 2024 to USD 1.5 trillion by 2029, driven by increasing demand for both luxury and fast fashion segments. This rapid expansion poses significant challenges in supply chain responsiveness, cost efficiency, and environmental impact, particularly in textile processing, dyeing, leather tanning, and finishing operations. This article examines the L&FGI value chain from raw material sourcing to final distribution, identifying key opportunities in lead times, inventory management, and environmental performance. A dual framework of Responsible Luxury and Responsive Value Chains is proposed as an approach to address these challenges. Responsible Luxury levers include the adoption of recycled fibres, biodegradable finishes, low-water dyeing, bio-based chemicals, animal-free materials, waste-to-value systems, and digital traceability technologies such as blockchain and QR-enabled product passports. Responsive Value Chain levers focus on material standardization, delayed differentiation, single-unit flow, demand forecasting, digital supply chain analytics, near-shoring, and supplier collaboration. Application of these levers across different stages, material preparation, cutting, assembly, finishing, packaging, and transportation, demonstrates pathways to reduce carbon footprint, chemical load, and water consumption, while enhancing agility and resilience of supply chains. The paper highlights opportunities for textile and leather suppliers, assemblers, and brand owners to integrate ecological dyeing technologies, sustainable material innovations, and circular economy models. By adopting this dual framework, the L&FGI can achieve future-ready growth while aligning with global sustainability and ESG imperatives.

Keywords: L&FGI, responsive and responsible supply chain,

1. Introduction

Fashion refers to the prevalent styles and customs of dress, appearance, or behaviour that are widely adopted by a group of people during a specific time. Fashion is an expression of creativity and individuality that manifests through clothing, accessories, behaviours and even attitudes. The item used for this expression can be clothing, footwear or various accessories. The fashion items can be categorised as worn accessories (apparels, perfumes, jewellery, neck ties, hats, belts, gloves, sunglasses, watches etc), carried accessories (Handbags, wallets, parasols etc), Hair accessories (hair ties, barrettes etc.) and other elements (cosmetics, hairstyles, body props etc.)

The fashion goods industry designs and produce the fashion goods and then manages its distribution, marketing, retailing, advertising and promotion. In 2023, the global fashion industry’s estimated worth was $1.7 trillion [1]. As per report published by BOF insights [2], it is expected to grow globally 2 to 4 percent per year between 2025 and 2027. The report highlighted that Between 2019 and 2023, there was unprecedented demand for personal luxury goods, fashion, handbags, watches and jewellery among them, combined with a deep well of supply allowed the sector to achieve a 5 percent compound annual growth rate. The Leather & Fabric Goods Industries (L&FGI) encompasses from the most expensive haute couture designer luxury fashions to ordinary everyday fast fashion clothing and casuals. The L&FGI market is expected to grow from about USD 1.0 Trillion in 2024 to USD 1.5 Trillion by 2029 (Figure 1) at a CAGR of 7.1 %.

Figure 1. Expected growth of L&FGI market [3]

With this kind of huge opportunity, the supply chain management for L&FGI needs to look at each of its components and processes to identify areas of improvement and become ready for the projected rapid growth. 

In the next sections we will look at the characteristics of the L&FGI supply chains and then understand the role of each of its members and processes followed in them with average lead times. In the last section we will identify various levers that can be applied at each of the components to improve the efficiency and effectiveness of the supply chain as an opportunity.

2. Leather & Fabric Good Industries (L&FGI) value chain

The raw leathers and hides are processed by initially preparing them to transport to tanneries from slaughterhouses. Variety of leather is available based on the animal source used and the tanning procedure followed. At tannery the leathers and hides are tanned either by chrome tanning which is the fastest method but is normally environmentally unfriendly, or by vegetable tanning which is a slower process but is environmentally friendly. There are other innovations being used as lab grown leather to reduce environmental impact. Post tanning the material is dyed, printed, oiled for making it soft, finally dried and finished by applying a protective coating. 

The manufacturing and processing of the Textile fabrics and Leather have some similarities. The textile fabrics start from fibres, fibres can be divided into natural (Cotton, Silk etc) and synthetic fibres (Polyesters, Nylon). Again the natural fibres are divided into plant based (Cotton, hemp etc) and animal based fibres (Silk, wool etc). The fibres are converted into fabrics by weaving, knitting or nonwoven web formation and bonding. The fabrics are used for making various garments or as linings for other products. These fabrics vary in terms of its texture, strength, colour and can be created into different range of products as per requirement such as patterns, breathability, durability etc. using selection of appropriate fibres and manufacturing processes. Thus fibres needs to be processed to provide an usability and appeal to the final product by chemically processing them by various processes Viz. Bleaching, dyeing, printing, finishing etc. The processing can be carried out at various stages (fibre stage, Fabric stage or even at final garment stage). 

Further these fabrics or leathers are processed in assembly plants/units to manufacture final product by cutting the leather and / or fabrics to required size and sewing together to form desired product, where required hardware (Button, zips, magnets etc) are added to the product. After assembly of the product, finishing touches such are pressing or embellishments are done. Finally the product undergoes quality inspections, packaging and then is dispatched to the distribution centre via a secured transportation. 

2.1 Members of the L&FGI value chain and their value addition

The L&FGI value chain constitutes multiple members starting from sourcing the best quality materials across the globe, further treating them for assembly in the final product and then the distribution. The value chain is represented in Figure 2. 

Figure 2: L&FGI value chain

2.1.1 Fashion designers and product development – These are specialised teams used by various brands for designing the products giving aesthetic look as per the trends. The team is responsible for identifying current fashion trends as well as latest materials and designing and refining products aligned with the brands heritage. This process involves multiple iterations of designing, prototype making and approval or alteration. (This stage is not presented in Figure 2)

2.1.2 Material suppliers – These are specialised suppliers providing the required materials to the Assembly factories. Majority of the suppliers are as below.

1. Leather / Hide suppliers – These suppliers process leathers and hides in a specific manner as required based on the fashion designers requirements such as colours, prints, embossing etc. Various fashion brands have their very specific requirements e.g. Green colour leather used by Gucci, Particular printing patterns used by Louis Vuitton. Post internal quality checks the leathers / hides are delivered to the assembler as per order. These suppliers need to maintain exclusivity for brand by ensuring traceability control over prepared materials. The rejected materials also need to be carefully destroyed. 
2. Textile suppliers – In this case the physical variation starts by usage of particular fibres, weaving or knitting and patterns created on fabrics and during the chemical processing such as dyeing, printing and finishing patterns and standards of chemicals used. Again the produced fabrics are supplied to the assembler based on the order while maintaining complete traceability. Similarly the requisite standard threads are supplied for stitching to the assembler.
3. Hardware suppliers – They supply the large variety of hardware used in assembling the final products, these can be buttons, charms, metallic brand logo, zippers, buckles, rivets, clasps etc. These hardware can be classified as zippers, metal items, plastics and sometimes natural products. Normally there are specific suppliers for a material types. The quality expectations are very high while selecting particular type of materials, specific finish and durability, safety standards etc. These materials are normally produced based on the order and delivered. 
4. d) Packaging material supplier – They supply the packaging materials for packing the product post finishing and quality inspection. The packaging materials can be Fabric (Velvet) bags, plastic bags, polystyrene foam and corrugated boxes etc. Majorly the packaging materials can be classified as plastics, Textiles and paper/ corrugated materials. Very high standards are expected as the packaging may impact the brand image, also the colour, GSM and printing patters are very specific. These materials are delivered as per order by the assembler.

2.1.3 Assembly – Once all the required materials are available with the assembler, based on the order from brand house, the assembly process is carried out as per the provided specifications. Normally the assembly process is carried out by Gluing, stitching or riveting process. The major steps are described in details below

1. Cutting – The textiles and leathers are cut as per the product specifications and order quantities. While carrying out the cutting process the textiles and leathers are also inspected to avoid any defective areas, so that these defects do not pass to the assembled finished product. Normally based on the order size the cutting process is carried out manually, or by cutting press or by advanced computer controlled machines.
2. Assembly – The assembly process is skilled job and is carried out by highly trained / experienced artisans and craftsman. This process can be carried out at multiple stations, or at other extreme, single artisan completing single unit. The cut materials and the hardware are assembled in sequential manner to produce the finished product. End of assembly quality check ensures that the defective product does not move forward to the finishing step. 
3. Finishing – In finishing steps the assembled products are finished for customer. The finishing process may involve pressing and folding to applying specific coatings etc. 
4. Packing – The packing process involves applying various brand relevant tags and covering various surfaces of the product to avoid damage to the product during handling and transportation. Majorly the product is arranged to retain its shape and all the metallic surfaces are covered to avoid it scratching other soft surfaces, it also involves packing the product in plastic or fabric bag and finally in a carton or corrugated box for transportation. The boxes needs to be labelled / barcoded appropriately to indicate the product inside. 

2.1.4 Transportation – The packed products are properly palletised and transferred to the ordering company by means of various transport means such as road, sea, air. The packed products are normally brought to the distribution hubs from where the products are distributed further to the retail or outlet shops. 

Due to the continuous variation in demand due to change in trends normally the entire process starts only after receipt of an order from the brand house. The average order to delivery lead time for a basic textile product can be 4 to 8 weeks but for complex and private label textiles can be 8 to 24 weeks. Sometimes the total value chain lead time (from concept to store) can get extended to 9 to 12 months. For leather goods basic items may get delivered within few weeks but for complex or private label items the lead time can run in several months. This impacts responsiveness to the continuously changing consumer requirements. At the same time supply disruptions are causing huge opportunity losses. The carbon footprint and pollution released to the environment is also high for Leather good as compared to textiles goods. At the same time the costs of manufacturing the finished product is continuously increasing. 

So overall if L&FGI want to capture the growth opportunity they should focus on improving costs, responsiveness and supply security while reducing the environmental impact.

3. Levers and areas of improvements for becoming future ready – Responsible luxury and responsive value chain

While we are checking for opportunities in L&FGI for support the projected growth, we need to align with “Responsible Luxury” by working towards usage of Biodegradability and animal free materials etc in product and “Responsive value chains” by usage optimization, delayed differentiation etc. for value chains. Table 1 and 2 shows various levers possible. 

Table 1: Levers for Responsible Luxury

Table 2: Levers for Cost and Responsive Value Chains

4. Application of the levers to L&FGI value chain

The applicability of levers to various elements of value chain of L&FGI is schematically displayed in Figure 3.

Figure 3: Levers and its application in L&FGI value chain

4.1 Material Suppliers (Leather, Fabric, Hardware, Chemicals)

• Applicable Responsible Luxury levers like Use of Recycled Materials, Product Recyclability,  Biodegradability , Animal-Free Materials , Water & Chemical Footprint Reduction, [4,5], Traceability & Transparency, Energy Efficiency. The levers for Responsive Value Chains can be Material Standardization, Alternate Materials, Multiple Sources, Inventory Management, Delayed Differentiation (Postponement), Use of Digital Tools & Analytics, Supplier Collaboration.
• Explanation & Opportunities:
• • Use of Recycled & biodegradable materials (recycled polyester, vegetable-tanned leather) recycling and repurposing leftover leather open new sustainable product lines. Recycling textiles mechanically into fibres or chemically decomposing and treating to original component to get new material/fibre with the help of technology. [6] This lever can also be applied to chemicals used in assembly and finishing stage. 
  • Animal-free materials use of environmentally friendly plant-based materials such as cactus leather or fungi/ mushroom fibres or lab-grown or bio fabricated leathers. This can provide animal-free or vegan alternative materials and are emerging opportunities in premium markets. 
  • Product recyclability designing goods for easy recyclability such as single metal zips, metal charms or brand logos enables recycling at end-of-life. This requires design-for-disassembly to be considered during the product development phase.
  • Water & Chemical Footprint Reduction use of latest technologies in ecological textile processing and dyeing along with wastewater treatment is important. For pretreatment use of biochemicals such as enzymes and physical processes like  ultraviolet radiation, plasma, and ozone technology. For Dyeing  encompassing natural dyes in association with biodegradable materials to improve the affinity of the textile substrate and colorant, and using emerging technologies like plasma, supercritical CO2, AirDye®, ultrasonic, microwave, Nano-DyeTM, and electrochemical should be explored. Eco-friendly finishing processes (low-water dyeing, biodegradable coatings) reduce environmental impact.
  • Traceability systems (QR codes, blockchain) build consumer trust on material origin and product genuineness by using blockchains to ensure complete traceability till source. Traceability needs to be ensured till the finished product handed over to the customer. Traceability during transportation is another area where sufficient investment needs to be done. QR-enabled passports improve transparency for end consumers. IoT devices and sensors can automate logistics tracking and warehouse management, reducing human errors and delays.[6]
  • Energy-efficient suppliers (solar-powered tanneries or mills) reduce Scope 3 emissions. Usage of biomass for heating and processing. Energy efficiency is applicable to all members of value chain.
  • Material Standardization The materials linings, inner foams which are not directly visible to customer can be standardised. Also the buckles, and zippers can be standardised to reduces procurement complexity and allows bulk buying. 
  • Alternate materials (e.g., embossed calf instead of exotic skins, PU-coated fabrics) help balance luxury appeal and cost. Replacement of animal based material to vegan materials and biodegradable synthetic materials can help. 
  • Multiple sources having alternate source helps in supply security, the procurement organization should ensure availability of at least two suppliers for all unique materials sourced to help during eventualities. These sources can be in different geographies for enhanced security. 
  • Inventory management should be considered for optimizing inventory across the entire value chain for maximizing responsiveness. Some common raw materials should be maintained in inventory based on the mutual agreement between members of value chain. Consideration of raw material inventory buffers of the most forecast error products to the tune of free manufacturing capacity can be one of the rule. Similar rules should be agreed at various stages of the value chain. 
  • Delayed Differentiation is a lever which can improve responsiveness dramatically. We can produce and store standard partially assembled or synthesised items and wait for an order, to assemble or synthesise final product. This lever along with modular design and standardization will help in reducing the costs while improving responsiveness. This lever can also be used in Cutting, Assembly and finishing stages as well e.g., adding trims, colors, embossing, or personalization only after order confirmation reduces mismatch risk and supports customization trends.
  • Use of digital tools & analytics Through digital tools and data analytics, it is possible to track every link from raw material procurement to product delivery. AI-powered predictive tools analyses historical sales data, consumer trends, seasonal variations and economic indicators that further enables to optimize inventory and reduce the risk of stock-outs or overstocking [7]. The lever is also applicable assembly and transportation stage as well. 
  • Supplier Collaboration with suppliers for co-development (e.g., unique metal finishes or lighter trims) shortens design-to-market cycles. Speed of response of a value chain increases with mutual trust between its members. Involving suppliers during the product development phase will help improve the product quality and even responsiveness. The supplier collaboration can help in even cutting and assembly stages. 

4.2 Cutting Operations

• Levers: Responsible Luxury levers are Use of Optimization, Waste-to-Value while Responsive value chain levers are Inventory Management (Discussed earlier), Single-Unit Flow, Delayed Differentiation(Discussed earlier), Flexible Workforce.
• Explanation & Opportunities:
• • Use of Optimization software minimizes leather/fabric wastage by nesting patterns efficiently. With one time investment in optimization tools the expensive and unique materials used by the L&FGI can be saved substantially. This lever is also applicable in Assembly area as well. 
  • Waste-to-value use of off-cuts (e.g., small wallets, keychains) creates new SKUs with minimal added cost. Also can use to make a very unique design products using the unusable materials while branding it accordingly. So this lever is also used in assembly area. 
  • Single-unit flow is where we try to reduce lot size as low as possible, this helps in reducing WIP and also can improve quality by helping early defects detection. Due to lowest possible lot size helps in improving the responsiveness. This ever is applicable to all the stages of manufacturing.
  • Flexible workforce trained on both manual and automated cutting machines enhances responsiveness. It also help to train workforce to carry out multiple tasks there by enhancing capacity and flexibility to overcome seasonal peaks. 

4.3 Assembly (Stitching & Product Construction)

• Levers: Responsible luxury levers are Use of Optimization, Product Recyclability, Circular Business Models, Waste-to-value, Energy Efficiency. Cost & Responsive levers like Inventory Management, Single-Unit Flow, Delayed Differentiation, Near-Shoring, Use of Digital Tools & Analytics, Flexible Workforce, Supplier Collaboration.
• Explanation & Opportunities:
• • Circular Business Models Using circular economy principles, which focus on resource efficiency, waste reduction, and recycling can efficiently reduce cost of the product [8]. The lever is also applicable in area of Packing and Transportation. Promoting second-hand transactions and rental services, implementing trade-in is key to achieving recycling programs [6]. Reverse logistics for resale/repair programs open new revenue streams.
  • Near Shoring normally helps in improving responsiveness by reducing transportation times but impacts manufacturing costs adversely. Companies should consider nearshoring for high value high forecast error products. Even hybrid strategy of producing fixed quantity in low cost countries while producing the variable quantities in the nearby countries will help. Near shoring the distribution hubs help in reducing delivery times and support omni-channel retail. 

4.4 Finishing (Polishing, Embossing, Quality Check)

• Levers: Responsible levers like Product Recyclability, Biodegradability, Water & Chemical Footprint Reduction, Energy Efficiency. Cost & Responsive levers are Inventory Management, Single-Unit Flow, Delayed Differentiation, Near-Shoring, , Flexible Workforce.

4.5 Packing

• Levers: Packaging Material and Waste-to-value are responsible levers while Inventory Management, Circular Business Models, Near-Shoring.
• Explanation & Opportunities:
• • Packaging Material Reduction materials with waste-to-value recyclable boxes and compostable fillers reduces cost and signals “responsible luxury.” The packaging materials with alternate use to the customer can also be developed and used, this also helps in brand advertisement, even take back packaging can also be considered.

4.6 Transportation & Distribution

• Levers: Responsible luxury levers such as Traceability & Transparency and Circular Business Models. Cost & Responsive levers like Inventory Management, Fast Transportation, Use of Digital Tools & Analytics, Near-Shoring.
• Explanation & Opportunities:
• • Fast transport (air freight) for limited-edition launches balances responsiveness with luxury positioning. For high gross margin and high forecast error products normal sourcing can be done from low cost countries but the variation quantities can be sourced from near shored countries with usage of faster transportation modes. 
  • Digital tracking and QR-enabled passports improve transparency for end consumers. IoT devices and sensors can automate logistics tracking and warehouse management, reducing human errors and delays.[6]

5. Conclusion

The Leather and Fabric Goods Industry (L&FGI) is at a critical inflection point, with projected market growth demanding faster, more reliable, and more sustainable value chains. The analysis of the L&FGI supply chain demonstrates that conventional practices—long lead times, high environmental footprint, and limited supply chain flexibility—are insufficient to meet the dual pressures of growth and sustainability. By adopting the proposed framework of Responsible Luxury and Responsive Value Chains, the industry can simultaneously address environmental and operational challenges.

Responsible Luxury emphasizes biodegradability, animal-free alternatives, recycled materials, ecological dyeing and finishing, optimized material consumption, and circular economy models, thereby reducing ecological burden and aligning with consumer expectations for ethical fashion. In parallel, Responsive Value Chains focus on agility through material standardization, delayed differentiation, digital forecasting tools, near-shoring, and collaborative supplier partnerships, ensuring resilience to demand fluctuations and supply shocks.

Future growth in L&FGI will require the integration of these levers across all stages—from material suppliers and processors to assemblers, finishers, and distributors—supported by digital traceability and sustainable innovation. Importantly, fashion designers and product developers will play a pivotal role in material choices, product recyclability, and eco-friendly design principles. With the right balance of responsibility and responsiveness, the L&FGI can transform its supply chains into future-ready systems that deliver luxury with sustainability, agility, and long-term competitiveness.

References

• 28 Dazzling Fashion Industry Statistics [2023]: How Much Is The Fashion Industry Worth, Zippia.com. Jun. 15, 2023,https://www.zippia.com/advice/fashion-industry-statistics/. 
• Imran Amed, Gemma D’auria , The State of Fashion: Luxury, BOF Insights, McKinsey & group 13 January 2025.https://share.google/M42AcBKmvpGJiXMJX.

1. 1. The Business report 2025: Market report image https://www.thebusinessresearchcompany.com/report/apparel-and-leather-products-global-market-report

• Lara, L.; Cabral, I.; Cunha, J. Ecological Approaches to Textile Dyeing: A Review. Sustainability 2022,14, 8353. https://doi.org/10.3390/ su14148353]
• Mr. Utkarsh Goley , Evolution of Leather in Fashion Industry, JETIR April 2024, Volume 11, Issue 4 www.jetir.org(ISSN-2349-5162)

1. Lucy Chamberlin & Casper Boks, 2018. "Marketing Approaches for a Circular Economy: Using Design Frameworks to Interpret Online Communications," Sustainability, MDPI, vol. 10(6), pages 1-27, 2018.
2. Yue Lin and Jun Yu, Study on the Modernization of Supply Chain Management of the Luxury Industry in the Context of the Digital Economy, Academic Journal of Management and Social Sciences, ISSN: 2958-4396 | Vol. 4, No. 1, 2023
3. Xiangzhi Zheng, Exploring the Circular Economy in the Fashion Industry: Transforming Waste into Valuable Resources, Proceedings of the 3rd International Conference on Art, Design and Social Sciences, DOI: 10.54254/2753-7064/45/20240106