Twenty years ago, I started my career at an Asian apparel manufacturer. Tech-packs would come in from big brands from the US and Europe. We would gather in meeting rooms late into the night, deciphering the documents and pulling together a sample as best we could. If the sample was approved, we would confirm delivery dates to the brand six months in advance.
Sometimes things did not go to plan, but we tried to resolve the issues while sticking to our delivery dates. Because of the severity of the ramifications, brands usually were the last to be informed. The less diligent factories seemed to get the lion’s share of the contracts because they could offer garments at a lower cost.
A few years later, I was working in the US. On that side of the world, brands were wringing their hands over the lack of visibility and transparency across their global supply chains. In desperation, brands would penalize manufacturers and request early shipments for much more stock than they ever expected to sell. All the while demanding lower prices. The result – more mistrust, more cover-ups, and more waste.
The great East-West divide of the fashion supply chain: practical because of the incredulous wage disparity but frustrating for all parties. The system was intrinsically flawed.
A recent Forbes article illustrates today’s differing views on the future of fashion manufacturing. Kirby Best, CEO of OnPoint Manufacturing, a US-based fashion manufacturer says that the cost advantage of Asian manufacturing is a misconception — when costs such as warehousing and shipping are considered, the cost per unit of manufacturing in Asia is much greater than it seems. On the other hand, Bibhu Mohapatra, a NYC-based designer, points out that abandoning the offshore model will adversely impact artisans in Asia, such as Indian embroiderers that currently enhance and support the global fashion industry.
Things are changing. The global economy is moving away from the uncomfortable power dynamic of brands in the West dictating terms to manufacturers in the East. Brands such as Burberry are changing focus to Asian markets, as China, South Korea, and Japan suffered only a 10% drop in sales during the pandemic when compared to 75% in Europe. Asian brands, such as Japanese Uniqlo, have become internationally recognized household names in much the same way as H&M or Zara.
Globally, there has been a shift towards local manufacturing. The rise of the conscious consumer has led to a drive away from wasteful, unsustainable fast fashion towards on-demand, personalized fashion. Communication and logistical issues have resulted in the latter being seemingly easier to facilitate with proximity between the brand, the manufacturer, and the end consumer. The disruption to global supply chains during the pandemic accelerated the trend, driving home the assumption that staying local is best. For more about this topic, please read my previous blog series on fashion beyond a pandemic.
What is the new normal for post-pandemic fashion manufacturing? Is it local manufacturing for local demand? Eastern production for Eastern consumers and Western production for Western consumers? I think not. Enough of the East-West divide. Cross-cultural commerce is not a bad thing. There is a trend to equate local with small businesses and global with big corporations. But what about the small Indian businesses that produce high-quality handsewn shoes to consumers in the US? Global commerce can enrich societies by allowing them to benefit from cultures they are far removed from.
One of the main issues with the global manufacturing model is that as it stands today, it is not sustainable. Fast fashion’s drive towards low prices has resulted in many aspects of the global supply chain being detrimental to the environment and society. Low quality is a function of low price and not manufacturing location. It takes time to do something right, and time is money. If a brand wants sustainable, high-quality products, then they need to pay a decent cost per unit to the manufacturer. Manufacturers must also demand higher prices. True, this will increase the overall cost to the brand, but a balance can be achieved. The cost of living varies across countries, and it is possible to pay an offshore machine operator a decent wage that is far above sweatshop prices but still lower than comparable onshore wages.
Furthermore, to ensure sustainable production, manufacturers need to do more than pay their staff a fair wage. They need to invest in infrastructure, IT systems, and management in much the same way as brands do. These do not come cheap.
By demanding cheaper goods, brands have inadvertently encouraged cutting corners and exploiting the low-income workforce in developing countries. Instead, brands can encourage and foster the manufacture of sustainable goods by paying fair prices. Manufacturers should plan long-term and invest in top-of-the-class software and systems to ensure the production of ethical, high-caliber goods.
Please read my blog post on post-COVID-19 sustainability to learn more about this topic.
Cross-cultural commerce is rife with issues in communication and collaboration. Let’s face it – remote communication is tough. We have all been there. The virtual meeting is just not the same as sitting in a room together. Designers want to meet with and talk to their manufacturers and discuss the best way to bring their designs to life. Something that is ever more pressing with on-demand personalized fashion. But in some respects, the issue is simply a matter of getting accustomed to a new way of working. The pandemic has forced us to learn new ways of communicating, and we are getting better at it. With the resources available today, the virtual business is far easier than it was a decade or two ago.
Product Lifecycle Management (PLM) systems offer software to support the design and development stage of a fashion product. Today, many of these, for example, Infor PLM for Fashion, offer collaboration platforms, where internal teams, such as designers, can communicate with selected partners, such as manufacturers. The process of sample creation, which usually entails sample products being air-freighted across the globe, can be eliminated or shortened with 3D modeling software integrated into the PLM system. Furthermore, if PLM is combined with an ERP solution, such as Infor CloudSuite Fashion, the collaboration can be extended throughout the entire product value chain.
With global supply chains, however, there are more issues than those of physicality. Not only language and accents, but norms regarding politeness and issue resolution come into play when differing cultures communicate. The problem is not unsurmountable. Opening channels of communication, such as user-friendly collaboration platforms, can eradicate most cross-cultural communication issues. The more cultures talk to each other, the more they understand each other. Culture-specific accents and mannerisms become demystified, leading to greater understanding.
Another issue that plagues a global supply chain is a lack of visibility. The fashion supply chain is notoriously complicated. From concept to store (or concept to doorstep), countless people are involved in producing a piece of clothing. Both brands and manufacturers struggle to manage the visibility of the supply chain. Here, I believe, there is only one possible solution – an integrated software system, such as Infor CloudSuite Fashion, with appropriate add-ons. Systems such as these ensure that every step in the process is carried out systematically, following agreed-upon approval processes and other checks and balances. If some steps are subcontracted or carried out by an external party, integrated add-ons can allow data exchange. For example, Nexus, a network for multi-enterprise supply chain orchestration, allows entities such as manufacturers, suppliers, banks, 3PL to exchange information, ensuring visibility as well as collaboration across the supply chain. Finally, business intelligence and analytics software, such as Birst, can compile the data and provide useful reports and alerts, and notifications in case of potential issues.
The world is in recovery. Pre-pandemic, the world felt smaller, with disparate regions being joined together by global commerce. The pandemic highlighted the frailty of the system, exposing the vulnerability of global dependencies during a crisis. It would be complacent not to learn from the experience. The issues of distance and differing national regulations, however, are only relevant during a pandemic. Post pandemic, the issues to address are sustainability, visibility, and collaboration. The bottom line is that a brand should have the freedom to choose its manufacturers from anywhere in the world. There needs to be respect and understanding between the brand and the manufacturer on equal footing. Location, East or West, should not matter. Onshore or offshore should not matter.
A trend that started because of sustainability should not end in the demise of cross-cultural commerce. Instead, the gaps and issues can be resolved with decent work practices and the right technology. If brands focus on ethical, sustainable manufacturing and choose their manufacturers based on skills and reasonable cost, with a little bit of help from technology, the rest should fall into place.
Stay tuned as I delve further into technology that can help manufacturers collaborate and provide visibility in part two of this series on fashion manufacturing