For years, supply chain success was measured by two things: fast and cheap. Retail giant Gap says that the formula no longer works in today’s environment.
Speaking at the Retail Industry Leaders Association conference in Orlando earlier this month, Gap’s Chief Supply Chain Officer Sally Gilligan told attendees that “Fast and cheap are not the only metrics that matter anymore.”
That message reflects a broader shift across retail, as trade tensions, tariffs, weather disruptions, and geopolitical uncertainty force companies to rethink where they make products and how they move them.
The shift started during COVID, when Gap learned a painful lesson about putting too much risk in one place. The company had single points of failure across its network, areas where a single disruption could halt operations.
That has changed. Gap has spent the past few years building what Gilligan called a “diversified network,” spreading its sourcing and manufacturing across different regions and partners. It is not just about having backup plans. It is about being ready to move quickly when the next crisis hits, not if.
“The level of disruption just keeps coming,” Gilligan said, pointing to everything from recent storms to trade policy changes announced just hours before her talk.
Diversification alone is not enough. Gap has also invested heavily in automation throughout its distribution centers. The goal is not just cost savings, but also flexibility.
“You have to make sure you have returns,” Gilligan said, referring to return on investment. “But then how do you allow that to also allow for flexibility?”
The automation allows Gap to dial up or down depending on what different brands need at different times. Sometimes the company is solving for speed, such as when launching a limited-edition collaboration. At other times, it focuses on value during promotional periods. The network can adjust.
Gap has also changed how it works with logistics partners, including UPS. Instead of treating them as vendors who deliver a service for a price, Gap now views them as strategic partners that help solve problems together.
Matt Guffey, UPS’s EVP and Chief Commercial and Strategy Officer, pointed to returns as one example. As e-commerce grows, so do returns. UPS acquired Happy Returns and brought that capability to the table. Working together, the companies were able to scale returns faster than if Gap had built everything in-house.
“It’s not a one-way conversation. It’s both ways,” Gilligan said. “We put our problems on the table, we put your ideas and our ideas on the table.”
Perhaps the biggest change is internal. Gap’s leaders are building what Gilligan called “managerial muscle,” the ability to make trade-off decisions in real time as conditions shift.
“What you’re solving for today, you may not be solving for next week,” she said. “You can start 10 things and get them all done 30%, or you can do three and really drive them to flourish. I think it’s a really important discipline.”
