Despite the apparel industry’s unwieldy tether to old processes, most within the ranks realize change is paramount not just for advancement, but rather survival.
In speaking with attendees at Sourcing Summit New York, executives from all points along the supply chain revealed how the event’s theme, “The New Fundamentals,” applied to the ways in which they’re replacing old operations with revamped rules of thumb. New technology, disrupted sales channels and mounting sustainability concerns were all prevalent challenges for those Sourcing Journal spoke with, with trade uncertainty running as an undercurrent through every facet of the business.
Wholesale transformation
The evolution of wholesale, once the most reliable of all selling channels, was top of mind for many attendees, supported with insight from the Summit’s “The Future of the New Wholesale Model” panel. In a conversation with Sourcing Journal, MMG Advisors’ Robert Shoobs echoed the panel’s sentiment that the old model of wholesalers just dumping product into retail stores, without using a more sophisticated data-informed strategy, is no longer a path toward success.
“If you look at sort of the old model…I think the consumers had less choices, and I think people cared less about brands, about fit,” Shoobs, executive director at the M&A consultancy, said. “And I think the modern customer is really concerned about fit. They’re concerned about sustainability. They’re concerned about choice, and they want to resonate with the brand.
Related Stories
“I think a lot of the old guard companies just never had to really deal with that and focus on that,” Shoobs added. “So they’re not structured, really on the front end side, to handle that that type of pressure.”
Sustainability struggles
To be sure, sustainability is a rising concern for most—if not all—apparel and textile companies. Richard Campanelli, chief operating officer at activewear-focused FAM Brands, said he’s seen sustainability evolve from simply being a novelty 10 years ago.
“From a sustainability standpoint, there’s a lot more demand for recycled polyester,” he said, noting that FAM’s biggest customers include clubs like Costco and Sam’s Club. “At our moderate to low price points, that’s one of the things that we’re kind of struggling with right now. We are seeing prices coming down on BCI cotton or organic cotton or recycled polyester. It’s still a struggle, but we’ve made some pretty good inroads.”
Cohesive operations
For Nara Bajenoff, senior vice president of operations and logistics at baby brands Aden & Anais and Halo, although the leading concept for the industry used to be fashion trends, her business strategies now employ a much more holistic picture of production.
“It’s all about fabric. It’s all about tightening up your planning,” she said. “Right now, the right formula is a combination of proper planning along with the fashion element. We’re paying a lot more attention to how we can streamline—and even sometimes invest in more fabric but it has to be intelligent risk taking.
“We can’t just go ahead and buy [whatever] fabric we want,” Bajenoff added. “The most important part is to find that balance between what we believe the market is going to demand, or is going to sell, and us taking the risk of putting it out there.”
Trade uncertainty
While planning is important, it’s not easy during this uncertain climate. The persistent trade war between the U.S. and China has made diversification an important new rule of thumb. A live poll during the summit revealed that roughly half of the attendees were planning to scale back at least 26 percent of their sourcing out of China.
As companies try to figure out the location that makes the most sense, Vietnam is frequently cited as an ideal destination (which was illustrated during another summit live poll). Kevin McFall, president of vertical swimwear manufacturer Trimera brands, which counts Target among its biggest clients, said his company has moved about 80 percent of its capacity out of China into Vietnam over the past three years. As more companies flock there, finding capacity is becoming increasingly difficult.
“Last year we produced 32 million swimsuits, and so capacity was very hard to find,” he said.
Tech solutions
Tech is helping companies cope with many of these changes, introducing new efficiencies and helping reduce waste. For this reason, the industry is counting on innovation to supersede manual processes and usher in greater speed and efficiency.
Florian Weingaertner, director at outerwear manufacturer Kido Industrial Co., said his company is seeing a great deal of shifts occurring within the prototyping and development stages of production, thanks to 3D and avatar technology. These technologies have facilitated a more accurate and efficient way of communicating during the product- and pattern-making stages that has “saved a lot of time and energy and money, especially in the prototype stage,” he noted.
Judith Russell, president at consultancy firm Markethink, said her apparel and textile clients are shifting a lot of repetitive analog processes to automated systems “to free people up to deal with people things, and creativity…and letting the machines do the machine stuff that they’re good at.”
While challenges still remain when it comes to integrating these systems between the U.S. and Asia, Russell said the idea has been “to leverage people so we can scale without adding a lot of staff, because staff is not only costly but cumbersome. They end up tripping all over each other. You end up having all these other concerns coming into the picture, other than just ‘How do we get things done, better and less frenzied?’”