Inspectorio's AI shrinks compliance documentation from days to one hour as US and European rules force apparel brands to map supply chains down to the farm level.
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Apparel retailers face a compliance deadline. US states are phasing in extended producer responsibility rules. Europe is rolling out digital product passport requirements. Both demand documented proof of what happens inside a garment's supply chain, from raw material to retail floor.
Mark Burstein, senior vice president for Americas at Inspectorio, an AI-powered supply chain platform used by Gap and Mango, said the manual process of collecting that documentation once took days or longer. Factory audits, purchase orders, water-use records, carbon-emission logs – all had to be pulled from suppliers, checked for gaps, and formatted for each regulator.
"Everybody is fully loaded into moving forward with all of this traceability, because the regulations are coming up," Burstein told Business Insider.
Inspectorio's AI shrinks that timeline to about one hour, including human review, he said. The system builds a chain-of-custody record, collects the required documents, and generates compliance reports tailored to specific regulations. Burstein said retailers have realized it's "almost impossible to manage this manually" after years of relying on supplier spreadsheets.
The Uyghur Forced Labor Prevention Act, in force since 2022, already requires US importers to prove no forced labor was used in their supply chains. Digital Product Passport rules in Europe mandate a QR-code-linked record for each product, disclosing materials, sustainability data, and traceability. Textiles are among the priority product groups in that rulebook.
Risk events are another reason retailers are moving faster. The pandemic, sudden tariff increases, and geopolitical conflicts hit supply chains with little warning.
"AI helps them bring the hidden risk to the surface a lot faster, before the disruption issue becomes a larger operational problem," said Kenchen Bharwani, a fashion consultant at Empire Apparel LLC, a wholesale company focused on off-price apparel sourcing.
A single product can have dozens of components from different countries. Cotton picked in Turkey may go to China for milling, then to Vietnam for cutting and sewing. Tags, packaging, and buttons can each come from separate locations. Burstein said tracing those layers is the core challenge.
OMJ Clothing, a custom suit maker in Charlotte, North Carolina, sources from as many as 10 factories at a time. CEO Brad Rhyne said the company used to learn about supply chain delays only when a customer called to ask about an order. In March, Rhyne built a custom dashboard using the AI model Claude to track factory orders in real time.
"We're able to dig into it before it even becomes an issue," Rhyne said.
The dashboard pulls factory data into a single CRM view. OMJ now spots delays proactively and can find replacement capacity or update the customer before the customer asks.
Large brands are using AI to monitor for human rights violations and environmental risks. Vera Bradley uses TrusTrace's AI to screen Customs and Border Protection's risk databases for forced labor indicators. Adidas uses the same platform with the World Resources Institute's Aqueduct tool to identify mills in flood-prone regions, Bharwani said.
H&M has reported using AI to identify flood risks and factory closures in Bangladesh, scaling back some production in the country. A press contact for H&M told Business Insider the retailer uses AI to improve supply chain visibility, reduce waste, and meet sustainability goals.
Some retailers have gone further. ASOS, Bharwani said, has traced its supply chain with AI all the way to the farm level. She called that an outlier.
"ASOS is just the one in a million that manages to get as far as that," she said. "I don't think a lot of other brands have yet."
Target, one of Bharwani's clients, publishes its global factory list. She described the scale as "thousands of suppliers that they work with, and it's so detailed."
Bharwani said forthcoming regulations will make traceability essential for all apparel retailers. US states are implementing extended producer responsibility policies at different paces and with different deadlines. Europe's digital passport rules are also rolling out in phases.
Burstein said the shift is structural. "It's literally manual work, hours and hours and hours, that we're eliminating here."
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