Brooks Brothers, Walmart Share U.S.-Centric Strategies

11/25/2013
For Brooks Brothers, whose heritage is distinctly American, having a multicultural workforce has helped the heritage brand to build a strong corporate culture.

Speaking at the Sewn Products Equipment & Suppliers of the Americas’ Executive Conference last month, Brooks Brothers vice president of domestic manufacturing John Martynec shared how the company has managed to keep up with the time, noting that in many cases, "the only constant is change."

Brooks Brothers’ more than 900 employees produce more than 110,000 suits, 300,000 shirts and 1.5 million ties each month, managing 400 fabrics and 100 product types at any given time.

Many apparel companies look to trim costs from their manufacturing operations but Brooks Brothers views direct labor as a value add, Martynec explains. Brooks Brothers employed one engineer to service three union-led factories in Massachusetts, New York and North Carolina when Martynec began with the company, a number that has jumped to seven — with more being hired.

Roughly 25 percent of Brooks Brothers’ workforce operates in the manufacturing end of the business. New hires are thoroughly informed about every aspect of the company. "We teach them the business vertically and grow them horizontally," Martynec explained.

Over time as its business has evolved, Brooks Brothers has had to accommodate a shifting set of customer demands. "We’ve transitioned from big runs of 1,000 of one thing to making one thing 1,000 times," added Matynec of the move to embracing custom orders. "You can’t do ‘vanilla’ anymore."

In fact, its manufacturing operations are so efficient that Brooks Brothers is aiming for its factories to produce 60 percent of its own brand and 40 percent for other labels. PVH Corp. already manufactures shirts in Brooks Brothers’ North Carolina facility, noted Martynec.

The company is looking to technology such as RFID to make a difference in the production process, not only in inventory control but also in keeping pants and coats matched up, for example. While raw materials are expensive, said Martynec, RFID tags are a mere $0.10 — a worthy investment that pays off quickly in efficiency and productivity gains. Brooks Brothers now can inventory 300 garments in just 17 seconds.

The tags may also be helpful with Brooks Brothers’ plans to convert its factories into duty-free zones, noted Martynec.

In the growing area of direct-to-consumer, Brooks Brothers is investigating body scanning technologies as a way to improve the shopping experience and create a better margin.

While many apparel companies are evaluating ways to ride the wave of Made in America sentiment and bring manufacturing back to the U.S., Martynec encouraged his peers not to get caught up in analysis paralysis. "The biggest obstacle to onshoring is between your ears," he said.

Walmart’s $50-billion plan
Walmart plans to purchase an additional $50 billion in American-made products over 10 years, said Michelle Gloeckler, senior vice president home for the world's largest retailer.

Gloeckler revealed how the company executes its 'EDLC/EDLP' strategy, noting that its ‘Every Day Low Prices' cannot exist without 'Every Day Low Costs.' That means Walmart analyzes every category in its supply chain cost structure, from labor rates, energy, raw materials and overhead to import goods and soft goods.

With supply chain advantages including better inventory management, quicker response times and reduced volatility,  Walmart requires transparency and collaboration with its partner suppliers, aiming to work with federal, state, and local governments to identify the best partners located in the U.S., Gloeckler claimed.

As the labor costs are narrowing, Walmart has found that the U.S. is becoming increasingly competitive with China and even holds a cost advantage over the global manufacturing giant in some cases.

Going forward, Gloeckler said Walmart plans to closely examine categories of product that can be manufactured domestically, work with vendor partners to address key barriers and meet with the instrumental government organizations to facilitate the re-shoring process.
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