Sourcing Execs Weigh In on Hot Topics at Apparel's Sourcing Summit at MAGIC

9/11/2014
An expert panel of veteran sourcing executives drew a crowd of nearly 200 at the recent Apparel Sourcing Summit at MAGIC,  an official session of Sourcing at MAGIC, the latter of which is held twice yearly in Las Vegas as part of the MAGIC trade show, which encompasses numerous buying shows and features thousands of brands and labels. Sponsored by the Andean Community, Apparel's Summit, which included a discussion and open mike Q&A on "New Sourcing Paradigms: The Realities, Risks & Rewards" and an executive networking reception, featured the following speakers: Tony Ward, senior partner with Kurt Salmon, moderated the session, which included fast facts from the 8th Annual Apparel and Kurt Salmon "Research Study & Analysis on Excellence in Global Sourcing." The benchmarking report, entitled "Strategy Shift: Collaboration, Tech Advancements Pave Path to Decentralized Sourcing," can be downloaded at apparelmag.com and found in the August 2014 issue of Apparel

Among some of the notable remarks:

On speed to market:
"Speed is something we are constantly asked for," said VF's Lunney.  "But how much do you really need? We validate the need first."

In terms of working with its suppliers on speed, Lunney shared the story of a supplier that quoted 75 turn days for one portion of the production/delivery process only.  Upon further investigation, it was discovered that hangtags were taking 75 days because no paper was being stocked.  VF helped rectify the situation and the turn time dropped to 15 days.

Speedo's Jeffries noted: "And it's not just speed, but right size and right place. How do you go back into the global supply chain? You need to share as much information as you can from the front end to the back end."

On leveraging agencies and overseas sourcing offices:
"We're seeing a lot of clients moving toward more offices closer to the factories, "said Kurt Salmon's Thomas. "This is not only for managing production, but to integrate these offices into the processes of materials development and management as well as color and fit approvals.  The longer these offices are in place, you start to see an expansion of duties and more of a partnership."

"It's the era of risk diversification," said Luen Thai's Helfenbein. "Think of it as the octopus effect — you want to go to one place with tentacles in many places." 

On where to source & what's next:
Speaking for the Andean Community, Reyes said, "Retailers want niche markets and near shoring.  They are looking for flexibility and first and second orders for replenishment."

Jeffries noted, "We are looking at Africa, but it's a small amount.  We look at everything that is coming up.  There are big risks in Myanmar.  Vietnam, however, is a very, very good place for us right now." 

Helfenbein said he had visited Vietnam in May and was "very impressed."  He added,  "The younger generation just doesn't know history.  Whereas the older generation may feel more uncomfortable or sensitive to something that happened, say, 20 years ago in Colombia, for example, you have to get past that. We are selling to a new generation. "

Lolly Wolly Doodle makes approximately 85 percent of its goods in North Carolina.  Wolley said: "Nearshoring is helping us have the right inventory and serve our customer. As I try to fill orders I am finding more factories in the United States even.  If I go to Alabama, for example, it helps maintain my inventory levels, plus it builds some very good relationships." 

Thomas says she sees general infrastructure challenges in India.  "We also see clients testing in Africa. They are toying with it, but don't necessarily see it as the next big place. In the end it's about being strategic and aligning sourcing strategy to product strategy."

Lunney concurs. "It's about optimal product placement," he said. "I'm interested in the best place for VF, regardless of whether it's the Americas or elsewhere.  We believe in balance across the globe."

While VF sources globally, Lunney still encourages execs to revisit sourcing in their own hemisphere.  "We are placing a huge order of some product in the Western Hemisphere that we have never produced here before.  Some things are worth another look. I want something disruptive. I say to a potential supplier: ‘What category do you want to dominate in?'"

As to producing in the United States specifically, Lunney said it's tough, but technology can help reduce labor, and Jeffries noted solid activity in Los Angeles for jeans, knitwear and swimwear. Helfenbein added that the AAFA is working to help facilitate U.S. manufacturing connections.

Regardless of the locale, all agreed it's pointless and even dangerous to chase nickels around the globe in search of cheap labor.  The real prerequisites for sourcing success are understanding macroeconomics, having true supply chain visibility and strong management oversight.  

"You have to have boots on the ground," concluded Lunney. "You have to know every tier in your supply chain.  And if you don't, shame on you."

The next Sourcing at MAGIC will be held Feb. 16-19, 2015 in Las Vegas.  To learn more visit magiconline.com.


Susan S. Nichols is publisher of Apparel and may be reached at [email protected].


Editor's Note: For attendee or sponsor information on the 2015 Apparel Sourcing Summit at MAGIC please contact [email protected].
X
This ad will auto-close in 10 seconds