In 2017, Nidhi Kapur, jumped feet first into a brand new bold endeavor by launching a direct-to-consumer furniture brand called Maiden Home. Like many millennial consumers, Kapur was tired of mass-produced furnishings that came with a hefty price tag and low quality materials. She craved the lost art of craftsmanship, and sought to change the trajectory of how furniture was manufactured by going straight to the original source: North Carolina.
For Kapur, this was about eliminating several links in the supply chain, and meeting consumer demand for quality, customization and improved speed-to-market.
Around the same time Kapur was launching the business, Nike was announcing a series of new initiatives designed to improve production. One of its plans? Increase near-shore manufacturing to better reach the company’s largest consumer segment in North America. By moving production closer to its target consumer, the company was able to cut costs associated with shipping and import duties, reduce manufacturing-to-market time from 60 days to 10, and provide a higher quality end-product.
From one of the largest apparel companies in the world to a brand starting from scratch, these are just two examples of how the sewn products industry is evolving and exploring new production and sourcing strategies to meet the demands of a growing consumer segment. This new production drive—focused on a value in quality, quickness, and customization—presents a unique opportunity for the resurgence of re-shore and near-shore production in North and Central America.
The popularity in local and regional manufacturing though wasn’t always there. Despite the introduction of CBI (1984), NAFTA (1994) and CAFTA (2004), which incentivized trade across U.S. borders, many companies turned east to China where labor was cheaper. By this point, U.S.-based manufacturing was seemingly a thing of the past. Factories and mills gathered dust, as companies could not compete with the low wages offered abroad and the lack of resources stateside.
But as e-commerce infiltrated the American economy, things began to change once more. Proximity became a priority, allowing companies to have a quicker reaction time to both the trends of fast fashion and customizability. The demand for higher pay in China also opened the door for Central America to compete with shorter supply chains, manufacturing capabilities, lower wages and tariff relief through free trade agreements.
As Central America saw an upswing in manufacturing opportunities, so too did the United States. The drive for American-made brands, like Maiden Home, appealed to the conscious, millennial consumer. And the advancements in manufacturing technology supported this drive. State-of-the-art factories were constructed with speed-to-market and flexibility in mind, exploring new means of automation and aligning with Industry 4.0.
But challenges still exist. While automation and data-driven tools in sewn product manufacturing is advancing, a lack of financing and trained talent could hinder its adoption. When offshoring was popularized, the need for skilled labor in the U.S. was eliminated. Because of this, a new generation of workers is required to learn the skills needed to successfully operate along the assembly line.
Attendees at SPESA’s Advancements in Manufacturing Technologies Conference, back in February, discussed these challenges in depth and explored prospective paths forward. It was determined that several changes along the supply chain—from digitization of manufacturing to sustainable practices to investments in workforce development—were needed to align with the fast-changing market. Support from policymakers and industry stakeholders is vital too. Whether funding research and development, or establishing reliable measures to monitor environmental impacts, there is an all-hands-on-deck mentality that must be adopted to overcome barriers and take advantage of opportunities on the horizon.
This is just the tip of the iceberg. The rise of re-shoring and near-shoring and the changing dynamics of manufacturing in the Americas requires further exploration. On Oct. 29-30, I will be joined by industry leaders to continue this conversation at the SPESA 2019 Executive Conference. Speakers and attendees will be invited to explore the topic and offer thoughts on where they see the industry going and how we can get there quickly. We’d love to have you join too. To learn more or register, visit www.spesa.org.
Michael McDonald is the new president of SPESA and a doctoral candidate at North Carolina State University’s Wilson College of Textiles.