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Hot Topics! In Technical Design - |
December 9-10 |
This program has been designed to provide an introductory overview of basic technical design concepts with an emphasis on:
• Fabric characteristics and selection |
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This seminar will be presented at [TC]²’s facility - 5651 Dillard Drive, Cary, NC.
To register, contact Debra Gill at 919.653.3501, or use our contact form.
First Quarter 2010 Programs
Pattern Development January 12-14
Introduction to Apparel Manufacturing February 8-12
Grading for Fit March 16-18
For more information on these programs and other educational offerings, go to: http://www.tc2.com/index_education.html.
By Kim Anderson, [TC]²
For years, apparel companies have been bombarded with intense competition from low cost imports. With labor accounting for 30-50% of the total garment cost, sourcing labor-intensive activities to countries offering low wages has been a popular strategy to achieve a cost advantage. However, labor cost is just one consideration in the decision to outsource goods and services. In an environment in which rapid deliveries and quick response to fashion trends are of growing importance, other variables are gaining ground.
“Outsourcing” and “offshoring” are often used interchangeably. Both have to do with sourcing strategies used to procure goods and/or services. Outsourcing refers to a company’s procurement of goods or services that it previously produced internally, but now obtains from a supplier outside the firm. Offshoring refers to a company’s procurement from a foreign country—either within or outside the firm.
Sourcing strategies can be categorized as domestic, regional or international. A domestic strategy is one where sourcing is carried out within the company’s own country. A regional strategy is when the company sources within a geographic area of countries that are linked by commercial treaties such as North American Free Trade Agreement (NAFTA) or European Union (EU). An international sourcing strategy (offshoring) involves sourcing products worldwide. Each strategy has pros and cons.
It is often assumed that sourcing to countries that offer the lowest wages is the best option, and this in fact is often the case. Even when a country’s workforce is considered to be more productive, when productivity is measured relative to labor cost, offshoring to low wage countries most often offers the most cost appealing option. For example, a worker in the U.S. apparel industry (excluding footwear) makes around $13.00 per hour. In India and China a worker in the apparel industry makes less than a $1.00 per hour. In this case, regardless of the high productivity reported in the U.S., it is often more profitable to source offshore to China or India. However, some apparel companies, especially smaller companies, find the potential cost savings negligible, especially in light of the new trend where quick response and replenishment are paramount.
Some of the variables that should be considered when deciding to offshore source are:
• Delivery Times
• Communication
• Quality Considerations
• Flexibility
• Country-of-origin
• Attitude
Delivery Times
Delivery time refers to how quickly the garment is made available to the consumer. Longer delivery times are a problem associated with offshore sourcing. A domestic manufacturing strategy often provides shorter lead times due to the reduction in transportation time. The quicker an item can be put on the retail floor, the faster retailers can try out new styles and reorder or cancel them before they are produced in bulk. In short—quicker lead times can reduce the retailers’ risk, maximize profits on successful garments and minimize losses on unsuccessful ones.
Even though fashion-forward garments often require more labor to manufacture than more basic items—which makes low wage labor even more attractive—the benefits of shorter lead times is a strong factor given the continuing trend toward rapid deliveries. In addition, getting more fashion-forward items to the market expediently is essential before the trend expires. More basic items can withstand longer lead times.
Communication
Quick and accurate communication is considered to be one of the biggest advantages of domestic manufacturing. Close proximity between the plant and customer allows for quick and accurate communication. The absence of language barriers is also an added benefit.
Quality Considerations
Research reports that among some apparel firms quality control is the key advantage to domestic sourcing. Many overseas factories that purport to offer high quality have strict minimum orders to ensure minimal factory down time—putting smaller companies at a disadvantage. Larger companies can afford quality control agents to oversee their production to ensure that quality and delivery times are met. Therefore, smaller companies might find sourcing locally to be a better alternative than souring offshore.
Quality issues can be more easily controlled and monitored when manufacturing is close by. Having the luxury to drive to the plant to discuss quality issues that might arise during manufacturing means that they can be more readily dealt with—allowing for quick actions to correct the problem.
Flexibility
Flexibility is defined as the variety and quantity of products available to meet the customer’s requirements. The amount of flexibility a company needs in their manufacturing strategy depends on the product type. More basic items do not require the same degree of manufacturing flexibility as fashion oriented items. Fashion items usually require frequent changes in styling and fabric. Having the plant within driving or short flying distance allows the parties to discuss issues that might arise during manufacturing, resulting in successful and quick styling changes.
Country-of-Origin Strategies
A domestic manufacturing strategy also might enjoy the benefits that the country-of-origin effect offers. Country-of-origin effects are defined as the picture, reputation or stereotype that business people and consumers attach to products of a specific country. Research shows that people have preconceived perceptions of countries. These preconceived perceptions can affect purchasing decisions.
An example of a positive country-of-origin would be “Made in Italy” which consumers associate with cutting edge design and quality. A positive country-of-origin effect can differentiate a product, giving it added value. Apparel items have some of the highest country-of-origin effects. Shifting production offshore may negatively affect the country-of-origin even though there is no affect on quality.
Attitude
Research has unearthed an ironic trend in countries with high labor costs. Countries with high labor costs are under constant pressure to reduce costs. Typically these countries are considered to have an unprofitable industry, making the players less competitive and ironically not as professional as countries with a thriving manufacturing industry. Poor management, inadequate documentation, the inability to innovate and the lack of a can-do attitude are typical complaints from companies attempting to source within their own country.
Conclusion
Improved communication and transportation technologies have allowed firms to successfully practice offshore sourcing strategies. However, the importance of rapid deliveries and quick replenishment are diminishing the benefits and cost advantages that offshore suppliers offer. The decision on where and how a company should produce their product significantly impacts the company’s market performance. An effective manufacturing strategy is essential when coping with the changing environment of the apparel industry. As the industry switches gears, so does the manufacturing strategy. Therefore, it might be a good time to re-evaluate the decision on whether to source domestically or offshore.
References
Leo Paul Dana, Robert Hamilton and Brooke Pauwels. Evaluating Offshore and Domestic Production in the Apparel Industry. Journal of International Entrepreneur. 2007.
Simone Guercini and Andrea Runfola. Sourcing Strategies in Clothing Retail Firms: Product Complexity Versus Overseas Supply Chain.
Offshoring and U.S. Manufacturers. SBA Office of Advocacy. December 2008.
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By Karen Davis, [TC]²
Superior Sewing Machine & Supply LLC is a wholesale distributor of industrial sewing and cutting machine replacement parts and supply items to dealers and import/export firms throughout the world. The company’s world headquarters is located at 48 West 25th Street in New York City. Regional sales offices are located in Miami, Florida, and Los Angeles, California.
The company's history reflects its customer-driven approach. Over fifty years ago, Herbert Klapper, founded Superior Sewing Machine & Supply to address the needs of the industrial sewing machine dealers. Dealers could order from Superior and have orders drop shipped directly to their customers. These drop shipments required a great deal of faith in Superior's commitment to protect dealers and their confidential information. Superior has never wavered from this original philosophy.
Herb Klapper's vision began in 1949 with only a few hundred items available. In 1999, Lonny Schwartz assumed the leadership position in the company. Today, Superior is an international company offering just under 500,000 different items, with over 35,000 of these parts and supplies considered core "Superior" products. The company takes pride in its high-quality parts and supplies and its order fulfillment rate of over 95% of all core parts shipped the same day.
Parts are evaluated and tested before they are sold, and further monitoring takes place to insure the same level of quality is maintained from the vendors.
In addition to supplying a vast assortment of parts and supply items, Superior is a main distributor of Brother, Durkopp, Hashima, Highlead, Kansai, Merrow, Mitsubishi, Pegasus, Pfaff, Racing, Rimoldi, Seiko, Sunstar, and Yamato factory supplied parts throughout the Americas. Superior is also the exclusive authorized distributor of Hirose hooks and master distributor of Cerliani Hooks in the United States.
In 2000, Superior acquired its largest competitor in North America, Unity Sewing, which helped Superior remain extremely strong and allowed it to maintain the infrastructure needed to properly service its customers during the market concentration that has taken place in the sewn products industry in the Americas.
Lonny Schwartz, President of Superior Sewing, comments, “Superior knows that its primary market, the Americas, is in a rapidly changing state and that there has been and will continue to be migration of sewn products manufacturing operations out of the Americas and into China, India and other countries. However, it firmly believes that there will be significant sewn products manufacturing operations in the Americas for the foreseeable future and that trade agreements such as CAFTA might even bring more sewing back into the Americas. Therefore, Superior continues to invest heavily in its people, its products and its infrastructure so that it will remain properly positioned to deliver to its customers the parts and supplies they need to enable them to facilitate efficient and cost effective sewing in the Americas.”
Superior Sewing has worked closely with [TC]² for many years in support of its Cary, NC demonstration center. Recently, on behalf of [TC]², Superior Sewing made a large donation of parts to the Haiti Apparel Center in Port au Prince that is being established to train sewing operators and mechanics.
November
30-Dec 2. |
33rd CCAA Conference on the Caribbean and Central America - InterContinental Hotel, Miami, FL. For details, go to www.c-caa.org. |
December
9-10 |
Hot Topics! In Technical Design at [TC]². Click here for details. |
23-Jan.4 |
[TC]² closed for Holidays and Staff Vacation |
Save the date! |
Annual Meeting of [TC]² Members and Board of Directors |
April 13, 2010 |
at [TC]² Offices, Cary, NC – All member and associate member company representatives are invited to attend. |
For detailed information about industry events, visit www.techexchange.com
Thanks to the techexchange site sponsors
Apparel Magazine, Gerber Technology, Lawson, Lectra, Methods Workshop and Reach Technologies.
A Look Ahead in the Newsletter
SPESA Expo 2010 Updates
View previous editions of this newsletter
[TC]²
5651 Dillard Drive
Cary , NC 27518
www.tc2.com
Phone: 919-380-2156
Fax: 919-380-2181
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