According to The State of Fashion 2026 by McKinsey & Company and The BoF, fashion executives say changing margin, cost, and cash strategies will be the second most important theme shaping the industry in 2026, just behind tariffs and trade disruptions.

That is not a niched CFO concern. It is a design, sourcing, and production as well. Slower growth, higher borrowing costs, stubborn excess inventory, and a rising bill for compliance and waste mean that the old formula for “efficiency” no longer works. 

This article builds directly on the “Efficiency Unlocked” theme from The State of Fashion 2026, using their findings as a launchpad to decode what efficiency actually looks like inside fashion’s supply chains today.

For brand founders, sourcing heads, and design leaders, the question is blunt:
Are your margin and cash strategies still built on cheap sourcing, or on smart systems?

From “cheap sourcing” to “smart systems”

For years, ‘efficiency’ in fashion meant moving production to the cheapest country, timing orders around currency swings, and pushing suppliers to cut the factory price per piece every season.

But the State of Fashion reports and recent McKinsey sourcing research show why that logic is breaking:

• Volatile input costs. Freight, energy, and raw material costs have swung sharply since 2021, which makes haggling over the factory price per piece a very blunt tool.

• Regulatory pressure on waste and emissions. The EU’s textiles strategy, new extended producer responsibility (EPR) rules, and national moves like France’s ban on PFAS in textiles mean brands are starting to pay for end-of-life, not just production.

• Reputational risk of overproduction and labour issues. High-profile investigations in ultra-fast fashion, textile waste heaps in the Global South, and worker-rights scrutiny have moved “cost at any price” firmly off the table.
  
  

The BoF-McKinsey 2026 report is sharp on this point: traditional advantages like scale and low-cost sourcing are no longer enough to sustain a healthy economic model.

Efficiency now is about resilience and precision:

• Resilience against tariffs, climate disruptions, and demand swings

• Precision in where you place bets, how you brief suppliers, and how you allocate cash over the calendar

Where the Real Efficiency Gains Life in the Supply Chain

The real work happens in a few unglamorous but powerful zones of the value chain.

1. Sampling and Product Development

Most brands still leak margin and cash before the first PO is cut. Each extra round of sampling means:

• Extra fabric consumption;

• Extra courier or air freight;

• Calendar compression that leads to rush production and, ultimately, markdowns

Shifting towards digital sampling and 3D-first development changes that math. When technical design, and suppliers work from accurate digital blocks and detailed tech packs, you can:

• Cut one full round of physical samples on core blocks;

• Approve colour, print scale, and proportion via high-fidelity 3D renders;

• Reserve physical samples for sell-in, fit-critical, or new-category pieces.

Even a modest change, like removing a single sample round on 20/30 percent of the range, frees weeks of calendar time and tens of thousands in tied-up cash for a growth-stage brand. 

McKinsey’s State of Fashion Technology analysis has already shown that fashion players increasing tech investment in operations see stronger productivity and margin uplift.

2. Materials and Supplier Selection

The next efficiency lever is who you buy from and how.

For years, fashion sourcing has been characterised by fragmented, shallow supplier relationships. That is starting to shift: CPO surveys show a move toward fewer, more strategic suppliers, with an emphasis on resilience and sustainability.

Practically, that means:

• Consolidating spend with mills and factories that have reliable lead-time performance, low defect rates, and clear certifications;

• Treating supplier scorecards as live tools, not statics’ PDFs;

• Choosing materials not just on price and hand-feel, but on how likely they are to clear compliance and arrive on time
  
  

Paying 2–3 percent more per meter for a fabric with reliable lead times, tested chemistry, and minimums that match your volumes can be cheaper overall than a “bargain” fabric that creates delays, rework, or customs problems.

3. Order Planning and Inventory

McKinsey’s State of Fashion work has consistently highlighted inventory excellence as a core driver of profitability.

Efficiency here is less about shaving cents off unit cost, and more about matching commitments to reality:

• Testing new materials and shapes in a few markets or channels before rolling out;

• Using real demand data to time replenishment and avoid safety-stock hoarding;

• Designing assortments with fewer, stronger SKUs so marketing and floor space work harder
  
  

For growth-stage brands, this is the bridge between “we’re constantly short on cash” and “we can actually invest in strategic categories”. Dead stock is not just a sustainability problem; it is frozen capital.

4. Data and Traceability as Cost Levers

Under new and incoming regulations, particularly in Europe, brands are being asked to document who made what, where, with which inputs, and under which standards.

Treating this as a compliance-only project almost guarantees duplication and cost bloat. Treating it as a shared data backbone opens up real efficiency:

• Collect primary data from suppliers once, in a structured way;

• Reuse it across regulatory filings, ESG reports, wholesale decks, and consumer-facing storytelling;

• Use the same dataset to identify high-variance lead times, chronic rework, or high-claim styles
  
  

In other words, clean, shared product and supplier data becomes a cost-control tool. It cuts rework, disputes, and delays before they hit the P&L.

Supplier-First View: Efficiency that Does Not Squeeze the Factory

There is a legitimate fear in supplier circles that “efficiency” is simply code for another round of price pressure. Historically, it often has been.

Yet the same BoF–McKinsey research and CPO surveys point to a different path: brands that build stable, multi-season partnerships with key suppliers are better at managing volatility and delivering on-time, full-price sales.

McKinsey’s global apparel lead Gemma D’Auria framed it clearly earlier this year:

“Yes, there are risks, but there are also opportunities to be captured.”

McKinsey & Company In sourcing terms, the opportunity is to treat suppliers as co-architects of efficiency, not just cost lines.

What that looks like in practice:

• Earlier visibility. Sharing design intent, open-to-buy envelopes, and launch windows months earlier, so mills and factories can plan capacity, raw material bookings, and hiring more rationally;

• Calendar alignment. Co-creating critical paths that leave room for testing, fit, and approvals without relying on last-minute air freight;

• Shared productivity gains. When new tech or better processes shave minutes off a style, the value should be shared between brand and supplier, instead of turning every gain into a lower factory price.
  
  

Let’s imagine a mid-market European brand consolidated its wovens with one key mill across three categories. Together they:

• Locked fabric qualities for 18 months;

• Froze lab-dip deadlines one month earlier;

• Shifted first sample rounds for carryover blocks to 3D.

The result is: roughly 30 percent fewer physical samples, a double-digit reduction in air freight use, and a smoother cutting schedule for the mill. Unit prices stayed realistic, but both sides improved margin through less waste and fewer fire drills.

That is “efficiency unlocked” in real terms: the system gets smarter, instead of the supplier simply getting squeezed.

Technology as a Connector

Almost every slide deck in fashion right now mentions AI, 3D, PLM, or digital product passports. The risk is treating technology as the hero, rather than the connector.

The State of Fashion 2026 report notes that many transformative AI projects are still stuck at pilot stage because they are not integrated into how teams actually work. At the same time, McKinsey’s tech-focused analysis shows fashion companies plan to almost double their tech investment – as a share of revenue – by 2030, primarily to drive productivity and margin.

For margin, cost, and cash strategies, the tools that matter most are the ones that connect design, sourcing, suppliers, and reporting:

• PLM systems that genuinely house the single source of truth on styles, materials, BOMs, and costs;

• 3D and digital sampling workflows integrated with those same BOMs and measurements;

• Digital product passports and traceability tools that pull directly from supplier and production data, instead of being manually rebuilt in spreadsheets;

• Sourcing and collaboration platforms that keep development, quotes, testing, and approvals in one shared flow instead of buried in email threads.
  
  

Used in isolation, any of these becomes another dashboard. Used together, they free up cash and calendar to invest in what actually differentiates a brand: sharper design, more responsible materials, and better customer experiences.

That is exactly the shift hinted at in this chapter of the 2026’s report, using technology to improve productivity and reduce costs, then redeploying those savings into growth levers, not just short-term margin patching.

Where World Collective Sits in this Shift

In this new efficiency brief, sourcing and supplier collaboration are not back-office tasks, they are where many brands will win or lose by 2026.

World Collective positions itself inside that reality as a global, supplier-first digital Ecosystem for responsible sourcing. In practice, that means helping brands and suppliers:

• Centralise material and supplier information and transactions in a way that is actually searchable and comparable;

• Cut down on back-and-forth in early sourcing, using better data and shared context so teams can move from inspiration to viable options faster;

• Use verified impact, certifications, and traceability data to choose materials that will clear compliance and align with brand promises.

The point is not just to “do sustainability projects”. It is to build sourcing flows that are naturally more efficient: fewer wasted samples, fewer dead-end developments, fewer last-minute surprises.

For suppliers, the value is visibility and qualified demand. For brands, it is productive efficiency: better information, better decisions, fewer avoidable costs.

Efficiency as an Everyday Sourcing Discipline

The BoF - McKinsey State of Fashion 2026 report is clear: margin, cost, and cash strategies will be a defining theme for the industry in 2026, second only to tariffs and trade disruptions.

Treat that less as a warning and more as a brief:

• Efficiency is no longer a year-end firefight in finance; it is baked into what you design, who you buy from, and how you work with suppliers;

• Supply chain productivity is not only about labour minutes; it is about calendar discipline, data quality, and shared tools;

• “Smart systems” beat “cheap sourcing” in a world of tariffs, regulations, and volatile demand.
  
  

If your team is rethinking how you brief suppliers, structure your production calendar, or track product data, start by upgrading the system that connects it all.

On World Collective’s side, we are building and sharing practical tools for that shift. Explore more sourcing and production insights on our blog, including:

• MOQ for Independent Labels: Design With Minimums, Not Against Them

• Fashion Production Calendar: From Concept to Delivery Without the Chaos

• Regulatory Changes for Fashion Brands: What’s Coming and How to Prepare
  
  

And if you want to stay ahead of the next wave of regulatory and operational updates shaping fashion efficiency, subscribe to World Collective’s newsletter for practical sourcing guides straight to your inbox.