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Texprocess with innovative sourcing platform
22
Nov '10
The cleft between cheaper and cheaper, faster and faster and ever greater individuality is growing and making life very difficult for players in the apparel industry – and squaring the circle is impossible. This article looks at why this is so and what the future holds in store for sourcing in the apparel industry.

Ideas in this connection can also be obtained at Texprocess, Leading Inter-national Trade Fair for Processing Textile and Flexible Materials in Frankfurt am Main from 24 to 27 May 2011, and 'Source-it', the high-grade, international sourcing platform at the fair.

It is long since the apparel sector was considered to be a pioneering industry in third-world countries. And rightly so because simple sewing work can be carried out by semi-skilled workers, and sewing machines are comparatively inexpensive. Whole cities and regions in the Far East, and in Central and South America, depend on the international apparel sector. In many cases, large subsidies were and still are being paid while international consultants are employed to help raise standards in these countries to the level expected in Western Europe.

Since the abolition of quotas and the admission of China to the World Trade Organisation (WTO) in the middle of the last decade, the attempt to play-off mass-produced goods from the Far East against up-market brands produced in small quantities in Europe, has not worked so well. There are many different reasons for this.

Faster than the customer wants to buy
Fast fashion with a new collection every week calls for highly coordinated logistical system ranging from product development to presentation at the customer's. In the nineties, this process usually took around 90 days. Today, only 60 are required. This Formula 1 pace is aided by extremely efficient product-lifestyle suites of special IT companies.

However, the careful development of models, yarns, fabrics and fit suffers – and leads to a decline in quality and run-of-the-mill garments that, despite the very low prices, are not particularly attractive to consumers. The quantities sold at the normal price fall, customers wait until prices are slashed. In other words, the idea flops. As critic David Birnbaum (USA) pointedly puts it, the length of time the goods are offered in the shop for the normal price is shorter than the interval between customer visits. In other words, price cuts are inevitable.

Vertical integration rather than outsourcing?
The uncertainties of the multi-stage textile chain result in great risks in terms of quality and delivery punctuality, not to mention fluctuating freight charges and currency exchange rates. Interestingly, this situation has boosted vertically-integrated suppliers, the Zaras of this world, which control (almost) all of the process stages from yarn production to marketing.

Virtually in real time, they evaluate article sales, transport models from A to B as needed and offer new fashions in response to needs. One of the first vertically-integrated suppliers is the Italian knitwear company Benetton, which nowadays rules over an empire of more than 6,000 stores worldwide and total revenues of around two billion euros (2009). However, not all brands and suppliers want to be so tightly bound to production capacities.

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