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Vertical and Sustainable: The Rebirth of North American Manufacturing

The fashion industry is changing, and not in China’s favor. The country’s massive capacity made it the mecca for fast-fashion, low-quality, low-price clothes, which are no longer desirable for many consumers.

China’s apparel industry has faced a number of headwinds including a continued trade war, currency battles and the Covid-19 pandemic, which has dismantled supply chains and shifted production to the Americas. Indicative of this change, six months ago, Los Angeles-based premium full package manufacturer Arzee International received a call from a prospective client, a trendy and quickly growing New York streetwear label. With a directive to “get out of Asia,” the client was curious if Arzee could help onshore its manufacturing operation.

While nearshoring is now taking off as a risk-aversion tactic, Arzee International was founded in 2016 on the premise of producing closer to home. Arzee works with a wide variety of clients ranging from emerging designers to national brands, with services including development, raw materials sourcing, sampling and bulk production on jersey, terry and fleece apparel.

In addition to its existing operation in Los Angeles, Arzee recently expanded its manufacturing footprint into Mexico, enabling it to better serve customers with shorter lead times on high-quality product that is onshore and duty free.

“We’ve built a world-class operation in Los Angeles offering premium cotton jersey, terry and fleece,” said Ryan Zimmerman, founder and head of business development at Arzee. “Mexico offers the same exceptional quality we are known for, and it’s a quick plane ride away. I’ve personally overseen our entire Mexico build out, and every new style that comes off the line.”

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Mexico’s positioning

Arzee’s initial desire to expand to Mexico was wholly strategic, and the proof is in the numbers: Mexico boasts an 80 percent reduction in shipping time to the U.S. compared with China.

Additionally, with the onset of Covid-19 and the disruption to global supply chains, the demand for onshore production by U.S. fashion brands has dramatically increased. The call Zimmerman received at the outset of the pandemic was soon mimicked by a number of his clients.

“Mexico is best positioned to take advantage of the current geopolitical and economic shift and capture the wave of production that is exiting China,” explained Zimmerman’s partner, Alex Turbay, head of operations at Arzee International. “Mexico is a low-cost bordering country with large developed manufacturing hubs, a highly skilled workforce and a modern logistics infrastructure that connects to the U.S. and allows free flow of commerce through a network of modern roads and railways.”

Mexico’s proximity to the U.S. also allows companies to experiment with more agile production models. After inventory piled up during Covid, the industry is looking to better balance supply and demand. “The traditional system of having to plan into and commit to large inventory purchases months in advance of sales because of production and transportation lead times are over,” said Turbay. “In our ‘new normal,’ brands with supply chain partners that offer speed, quality and the agility to produce replenishments or in-season reactivations on demand will come out thriving.”

A move toward nimble manufacturing translates to a need for nearby sourcing. “On-demand manufacturing is done most efficiently when production is made close to the end customer,” added Turbay. “With the dramatic shift to online shopping, this will enable brands to turn designs faster, improve sell-through by doing a better job of matching supply with demand, and improve working capital through holding less inventory. All of this is possible with our onshore model.”

Sustainable sourcing

Along with the onshoring focus, Arzee International has also prioritized building a traceable and sustainable supply chain. “Consumers not only care about sustainability, but they’re also highly educated on the topic and forcing real change with their spending power,” Zimmerman said. “Arzee has been sustainability focused for some time now. With Mexico, we’ve had this great opportunity to oversee every part of the operation—from the yarns we spin, panels we sew, to the garments we wash and dye—making sure everything is really done in a way that’s best for the environment.”

According to 2019 Global Wellness Trends, fashion was the second-worst offender of water pollution and responsible for roughly 10 percent of all carbon emissions. Onshore production better matches supply and demand, helping to eliminate overproduction, and also lowering the carbon footprint through more efficient delivery times and less general waste.

Arzee’s Mexican mills and washhouses have committed to reducing water waste through the purchase of high-efficiency wash machines and precision irrigation. To track its environmental and social responsibility, Arzee is using the Higg Index as a benchmark. The company’s factories have already been recognized by the nonprofit Mexican Center for Philanthropy for their commitment to sustainability.

“One of the best things we’re doing on the sustainability front in Mexico, though, is this amazing social project,” said Zimmerman. “We’ve partnered with our fabric mills to pay disenfranchised members of the community, those most in need, to collect and bring plastic bottles off the streets. The bottles are disinfected, broken down through a trituration process, and re-fibered to a polyblend where we make eco-friendly tees and sweatshirts.”

Beyond Mexico, Arzee International is taking action on climate change. In partnership with the nonprofit Cool Effect, the manufacturer is offsetting its carbon emissions by supporting the organization’s carbon reduction projects. Most recently, Arzee sponsored Cool Effect’s initiative to conserve 180,000 hectares of land in the Brazilian Amazon.

“We view sustainability as a commitment to continuous improvement and innovation, but we’re not perfect yet,” said Zimmerman. “There is nothing more important right now than our environment, and we’re going to keep doing everything we can to protect it.”

Click here to learn more about Arzee International.