If you're the type of person who reads labels, then you've probably noticed that many of the garments hanging in your closet were made in Asia. If you're also an apparel producer then that's probably an issue of concern for you.
It is for Geoff Krasnov of Style Source, a short-run, private-label manufacturer. He calls his push for regional focus 'Hemispheric Isolationism.'
Krasnov joined with others in the supply chain recently, including Apparel, at a meeting of the AAPN (American Apparel Producers' Network), to discuss the urgent need for collaboration in the Western Hemisphere, and how to make it happen.
While there are hurdles to creating a full package supply chain in the West - the lack of woven fabrics being one of the largest - working toward this goal isn't an option. With increasing consolidation at retail - 15 retailers now sell 68 percent of all apparel in the U.S. market today - power is concentrated in the hands of a few, who are placing more pressure on their suppliers, demanding increased sophistication and greater service.
China has already proven its prowess in full package manufacturing, and with 18 percent of U.S. apparel imports, it shows no signs of slowing down. Building collaborative relationships within this hemisphere to respond to the Chinese challenge and the changing marketplace will be key to the industry's survival in this region, but it's also smart business strategy for retailers.
Why? As neighbors to the United States, Central America and the Caribbean offer much higher supply chain flexibility. Roberto Bequillard of Argus International points out that this is crucial for fashion goods. An efficient supply chain conceivably could take a garment from design to store shelf in four to five weeks, compared with four to five months out of Asia.
There are also free trade agreements to consider, and the growing need to respond to potential terrorism and other global threats through diversification.
To come together to form a formidable supply chain, Bequillard offers these tips:
Ask this question: "Is this the right product for us to manufacture?" Look for a minimum of four retail seasons, to take advantage of proximity and short cycles. Right now, says Bequillard, the reverse is true in the industry, with basics manufactured in Central America and fashion garments in Asia.
Develop new regional business models to change the mindset in this hemisphere from 'order fulfillment' to 'process fulfillment.'
Develop effective product development capabilities and collaborative product development processes, with a goal of offering full package production. To this end, look to form strategic alliances with raw material suppliers.
Integrate with partners on the back end to improve shipping, distribution and quick response fulfillment.
Become a practitioner of "horizontalization," whereby you leverage your manufacturing across as many customers as possible. Bequillard cites, for example, TSI, which sews labels on its pants at the last possible minute, depending on orders received.
Focus on knit goods, as woven fabrics are not readily available in this hemisphere.
Ultimately, fabric suppliers and contractors must join together to develop what the market wants, sharing equally in the risks and rewards and regarding each other as partners, rather than competitors.
Lisa Carter-Knight of Timberland sums it up nicely: "It's time for a mentality change in this hemisphere. Today, the question is, 'Who's going to take the hit?' but it needs to be, 'How are we going to build a relationship?'"
A model of real-life collaboration was presented in fiber producer Unifi, which took proactive measures to drum up business and create relationships, explains Mark Helms. Having noticed drastically marked-down athletic wear on a clearance rack at a major U.S. retailer, Unifi approached the company with a plan to collaborate on the development of a new performance fiber and line of activewear. Long story short, nine months later, the retailer had a new line of top-selling performance wear in its stores.
This is the type of approach that will build a strong supply chain in the Western Hemisphere.
The time is now.