Spring is a season when thoughts often turn toward new beginnings and of course, new clothing. From the supply chain sourcing strategy lens, many clothing and apparel retailers made their new spring clothing design selections months ago because of the supply chain lead time involved in producing and shipping apparel and accessories from lower-cost manufacturing regions to global-wide consumers.
However, the apparel industry is changing, and the notions of “Fast Fashion” are garnering adoption by new start-up and older retailer and brand names alike. Fast Fashion is the ability to sense what designs are selling among consumers coupled with a supply chain strategy that can more quickly respond with design and production resources. The icon and continuing benchmark for excellence in this concept remains global retailer Zara, which from its inception, has designed its entire business and supply chain strategy to accommodate the fastest response to market trends and consumer desires. Check out our 2012 Supply Chain Matters commentary profiling Zara’s investment in automated logistics and market response.
The primary reason that faster fashion has become more important is the explosion in online and Omni-channel retailing.
Supply Chain Matters recently read of two current but meaningful examples of these trends, case studies that address slightly different consumer response needs.
An article published in FastCompany, Why Clothing Startups are Returning to American Factories (Paid subscription required) profiles boutique performance fabrics maker and Boston based yoga wear retailer Yogasmoga. Observed is that the firm’s founder and CEO elected to source production needs at apparel contract manufacturing facility in Fall River, Massachusetts, 60 miles south of Boston. The CEO’s stated motivations for doing so was simply stated as: “I simply couldn’t produce the clothes I wanted to make overseas.”
Instead, Yogasmoga wanted to create its own leading-edge fabrics, more closely monitor quality and have the flexibility to scale-up production as quickly as possible. The CEO observed that it can take as much as 10 months to go from placing an order at a Chinese based factory to receiving a shipment of goods. This retailer’s intellectual property resides in 30 different technically designed fabrics that utilize combinations of synthetic and organic fibers to create certain effects for yoga pants. Sourcing of these fabrics comes from U.S. producers while assembling these fabrics into finished garments requires a specialized process, one requiring constant monitoring and adjustment. U.S. based factories have further adopted advanced automation techniques in areas such as fabric cutting, measuring and assembly.
What local sourcing of sewing and production provides is to check-in on the local factory on a monthly basis to ensure quality is to specification, as well as to save on inventory investment tied-up in the elongated lead-times from Asian-based factories.
The FastCompany report further observes that newer clothing startups have started moving into U.S. factory sourcing because of the benefits of more rapid or flexible response that can be provided. Brands mentioned include U.S. West Coast menswear provider Buck Mason, children’s wear provider Petit Peony, and specialty sweatshirt brand American Giant which recently elected to move its production operations from Asia to the U.S.
A different example was profiled in a recent article published by Bloomberg Businessweek focusing on iconic brand retailer Brooks Brothers. That retailer continues to operate a production plant in Long Island City, New York where half of the plant’s workers are 55 and older with age ranges from 22 to 80. The average worker tenure is stated as 30 years, and the plant’s advantage is one of deep worker experience along with flexibility to quickly respond to consumer or market needs. Noted is that these workers excel at speed and precision while making few mistakes. While the production operation is mainly automated, skilled tailors provide the added or custom design touches. For instance, a sample men’s tie can be produced in a half-hour, and twenty minutes later the sample is in the hands of Brooks Bothers product design and retail executives residing at corporate headquarters in Manhattan.
Workers respond to orders for custom ties in different fabric combinations, special orders for groups, or urgent orders that are responding to a new or perceived up and coming market need. While apparel production may be sourced from offshore locations, the Long Island production facility serves as the response mechanism to special market needs or personalization of apparel.
Readers have perhaps perceived one common denominator that currently allows Fast Fashion retailers to be able to uphold margins by sourcing in the United States or Europe. That is obviously price, namely that consumers continue to be willing to pay a higher price in order to receive higher value, better quality and the latest styles and fashion. In today’s online and Omni-channel customer fulfillment world where retail store and online outlet come together in a holistic retailing capability, speed, quality and timely fashion will remain an advantage. Compromise on any of these factors, and consumers respond by going elsewhere. Lululemon Athletica has become the classic case study.
The takeaway remains that supply chains do matter and in today’s new world of Omni-channel retail, when speed, superior quality and responsiveness of the supply chain to the needs of faster fashion are a requirement, supply chain sourcing strategy will continue to foster localized geographic sourcing.
© 2016 The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.