Made in the USA & apparel reshoring is a hot topic in the apparel industry these days. Corporate America is definitely interested- we need to look no further than Walmart’s American Manufacturing Commitment to buy an additional $250 billion dollars of goods made in America over the next 10 years to see evidence of that.
And, the interest in apparel reshoring certainly isn’t limited to the corporate world- government bodies are also funding this resurgence. From the recent investment of $3.5 M by the NYC government into the Manufacturing Innovation Hub for Apparel, Textiles, & Wearable Tech, to federal legislation like the Berry Amendment, there are quite a few parties involved in and committed to making this resurgence a reality.
But is this Made in the USA & apparel reshoring effort just a flash in the pan, or does it have staying power?
The recent 2014 Reshoring Index published by the management consulting firm A.T. Kearney suggests that while there has been a notable increase in the amount of apparel reshoring, it is being outpaced by imports from other countries. In other words, the rising tide is lifting all boats.For more details on the Index, you can find A.T. Kearney’s 2014 Reshoring Press release here.
To find out more about how people in the apparel industry in the US and elsewhere feel about reshoring, I turned to some experts in the industry. I asked my colleagues a few key questions about the reshoring of apparel and the resurgence of Made in the USA.
A special thanks to these industry experts for weighing in on this topic:
- Roy Shurling President, Lectra North America Lectra’s Website
- Jeffrey Silberman Professor & Chairperson of Textile Development and Marketing at FIT FIT’s Textile Development and Marketing Website
- Deanna Hodges President, Macada Design Group & Hodges Collection Hodges Collection Website
- Christopher Wilkinson Vice President, Atkins Machinery Atkin’s Machinery Website
- Stephen Kerns Vice President & General Manager, Sympatex Sympatex Website
- Belinda Carp Sales & Marketing Director, Textiles Intelligence Textile’s Intelligence Website
- Jill Andress Owner, Flair Etcetera Flair Etcetera Website
- Chuck Stewart President, Tumbling Colors Tumbling Colors Website
- Brown Abrams CEO, High Voltage Graphics Inc. and FiberLok Inc. FiberLok Website
Question #1 How are you seeing the Made in the USA & Apparel reshoring efforts impacting business or business decisions in your company?
“As a leading process expert and integrated technology solutions provider for industries dealing with soft materials, Lectra has witnessed the recent growth of companies within the fashion and apparel sector in North America (including Mexico and Central America). Consumer trends are changing at a rapid pace and, in order for brands and retailers to address these trends while maximizing sell-through rates, these companies are aiming to keep production closer to the end consumer. With wages continuing to rise in China and minimums for orders increasing, many American companies are considering reshoring and/or near-shoring as viable manufacturing options. In fact, according to a recent study by Boston Consulting Group on the shift in global manufacturing, China’s manufacturing cost advantage over the United States has shrunk to less than five percent, while Mexico currently has lower manufacturing costs than China.
‘Made in the USA’ in the fashion industry is still a bit of a novelty, and it seems to be a struggle for most brands to produce garments that are competitive against similar styles made overseas. On the other hand, there are some companies that are able to produce high quality garments at an efficient level in the United States, particularly in Southern California. The trick for them is to be as lean and efficient as possible, and to offer a quality of product and service that is difficult to find elsewhere.
As we look around the sewn products industry in general, we see many companies with the desire to reshore production, but they are struggling to find skilled sewing operators. When garment manufacturing first transitioned overseas, we not only lost jobs in the United States, we also lost skill sets. Skilled professionals like patternmakers, sewers and cutting room staff can be hard to come by because they haven’t been in demand until recent years. At Lectra, we believe technology is vital to making these kinds of roles interesting and highly sought after again, and it is also essential to achieving the quality, repeatability and speed that are needed to keep the American-made fashion industry alive and thriving.” Roy Shurling, Lectra
“I can tell you what I see with America spinning companies (yarn producers). We have recently started to import late-model machinery to sell to USA companies as they have increased their capacity due to a stronger demand. This has been a big change as it was about a 80% sell internationally 20% sell domestically until about two years ago. I can now say that it is now 50/50 ratio. We have also seen that the major spinners are making huge investments in new machinery upgrades as well which in turn has given surplus used machines to sell. We also see that China and India are bringing spinning facilities to the USA because they see the advantage of actually being a “USA” based company.” Chris Wilkinson, Atkins Machinery
“We are very excited to see more brands building here and speak with more each month. We feel it plays to our strengths of offering a strong quality and performance story along with eco-minded decisions. Sympatex has always balanced production locations globally including Asia and Europe with some US partnership capabilities as well. Previous when the US was first place of production for many brands Sympatex had a footprint here in the US. So it is nice to see some of the returning.” Steven Kerns, Sympatex
“There has been more of a focus on transparency along the supply chain since the high profile tragedies in Bangladeshi factories last year – so Western brands seem to be looking at sourcing options closer to home. However, at the same time, the bigger brands are working together to improve conditions for workers in Bangladesh and other low cost sourcing locations. Besides, the gap in wage rates between the USA and low cost countries such as Bangladesh is so large that it is hard to see how US producers could compete in volume markets. In summary, I’m not sure that the re-shoring efforts are going to have a measurable impact on US import data in the short term.” Belinda Carp, Textiles Intelligence
“Remember that we are an industry focused university, and so we hear a lot of different points of view on this. Most of the companies we deal with would like to see re-shoring happen, but are approaching it tentatively. But for sure, it is in every conversation, and has everyone’s interest.” Jeffery Silberman, FIT
“We have seen an increase in the MUSA styles in 2014. I definitely think there are consumers who would prefer to purchase one of these, as opposed to the exact same style made off shore, if they are the same price.” Apparel Executive from work wear brand
“We are seeing an increase in sales and the customers that are capturing this business are investing in machinery and have a positive outlook into 2015 and beyond. The re-shoring has not changed our business decisions because we have already heavily invested in our USA operations and personnel ahead of the re-shoring. In the poor business condition years after 2008, we invested and came out stronger.” Executive from a leading global dyes and chemicals manufacturer
“For us, not much change at all actually. We ship to the contractors who apply our heat seal product wherever in the world that may be; and it continues to be to Asia or Mexico with smaller amounts to the African continent as well.” Brown Abrams, Fiberlok
“Made in USA/Reshoring did not impact our business. Customers would say they wanted Made in USA but were not ready to pay the prices. In instances where lead times were critical or in emergency situations, we would certainly use US mills.” Anonymous Apparel Executive
“Although I like to support Made in USA products whenever possible, my customers don’t want to pay the extra money for the products. I have very few customers who will order them simply due to the higher price.” Jill Andress, Flair Et Cetera
“We make our products exclusively in Southern California and always have with the exception of the cashmeres we did several years ago out of Nepal. It is often a challenge manufacturing here and keeping the prices low enough to be competitive with imports from China and Indonesia but well worth the effort. I am a staunch supporter of Made in the USA and do everything in my power to keep our manufacturing here. The decision to keep our manufacturing in So Cal has actually made me a better business person as it has forced to me to think outside of the box and get creative when it comes to my production and keeping costs in line. It also has given me a deeper understanding of the industry on a level that I would never have had if I manufactured out of the country.” Deanna Hodges, Macada Design Group & Hodges Collection
Question #2: Based on your experience, which product categories would you expect are some of the first to be reshored and why?
“Again yarn is being re-shored here and yarn mainly for t-shirts and underwear. However, the garments are knitted and cut and sewn still outside the USA. I see woven goods such as poplin, pants, twill and household textiles as the next phase as many are putting an emphasis on bring weaving back.” Chris Wilkinson, Atkins Machinery
“I believe that re-shoring will be for high end and niche products at first. Successfully accomplishing this often includes a product and process re-design, in order to deliver an equivalent product at a better price. Mass apparel or home furnishings doesn’t have very much to re-engineer, which is why I believe that we won’t see those products come back in a big way, at least at first. I believe technical textile-based products will be successful.” Jeffery Silberman, FIT
“Sportswear and technical textiles. These are higher value items and the textile mills in the region are more interested in grabbing these businesses. We are also seeing more yarn spinning coming to the USA due to availability of fibers and low energy costs. I don’t expect to see cheap apparel being re-shored. The price points are too low.” Executive from a leading global dyes and chemicals manufacturer.
“I see brands that are ether better technical collections or fashion forward ones being the leaders here. They both are into the details and refinements and like the ability for regular involvement with manufacturing. Many proto’s and new construction stories. Also, I would say they like the reduced timeline that can be achieved with working locally and the unique selling proposition it can offer.” Stephen Kerns, Sympatex
“Of course the ability to respond in hot markets to changes in retail demand would always put sporting events in this category. We are not into fashion much so do not feel the fluctuations traditionally associated with servicing that demand.” Brown Abrams, FiberLok
“The primary advantage we have in being in Raleigh NC is the ability to get a new product on the shelf quickly. We are seeing everything from simple Tshirts to twill slacks.” Chuck Stewart, Tumbling Colors
“I don’t have firsthand knowledge but I have heard from color management customers that the costs in China are rising and they are looking for alternatives. Not many have indicated they would be coming back to the US yet though. I did hear from a major retailer that they have one very small niche program at a domestic mill. It is a miniscule win, but a win nonetheless for Made in USA.” Anonymous Apparel Executive
“The categories that return to US manufacturing will be those items that consumers are willing to spend their hard-earned money on such as apparel including denim, leather outerwear and swimwear. Apparel in every item category has already shown signs of renewed growth in domestic production. I am in the middle of the fashion district and manufacturing businesses most of each week and have seen the resurgence of manufacturing.
Here is why: There are many designers who have much smaller production runs and do not meet the minimums required by overseas production. There are also those who have chosen to manufacture Just in Time and brands like mine that specialize in “Immediates” who need to turn goods more frequently and faster than producing overseas would allow. This is very helpful to many boutique and specialty stores who are not carrying as much inventory as they did in the past and are not writing business out as far as they previously did. There are many reasons that US designers and manufacturers are manufacturing domestically again. Everyone is watching their bottom line a lot closer and it just makes sense to produce goods using our own resources. On the flip side, inexpensive accessories will most likely not make much of a return to US manufacturing. The prices of many of these accessories are too low to absorb the labor costs here in the US.” Deanna Hodges, Macada Design Group & Hodges Collection
“In the fashion industry, we may see some luxury or near-luxury items increasing in production in the USA in the coming years; this is because consumers are buying these goods based on quality and prestige rather than price. Martin Greenfield Clothiers, a long-time Lectra customer, is a perfect example. The menswear company offers fine, hand-crafted tailored clothing including made-to-measure suits and tuxedos, made 100 percent by hand in its Brooklyn, New York factory. The company has produced suits for Presidents, Ambassadors and actors in major motion pictures.” Roy Shurling, Lectra
Question #3: Based on your experience, in what ways will the US/Canada/Mexico supply base need to prepare, improve, or invest in order to handle the increase in business from an increased level of reshoring?
“I think efficiency is key to success here. Getting the design and fit of garments right first time will improve efficiency and speed to market, as will effective communication systems between supply chain partners.” Belinda Carp, Textiles Intelligence
“US textile companies have always been the leader in investment of the newest technologies and continuing to do so has brought back the demand for their products due to efficiency, best quality, and quick turnaround for orders. This continued investment into the new technology is the way to continue. Mexico is lagging but is now investing in newer technologies as well and we have seen an uptick in business there as well but not as strong as the current conditions in the US. Mexico needs to invest in quality engineers and technicians in their plants as there are many lacking in this area. Pay is low and so turnover is strong and therefore the workforce is constantly being retrained which hurts quality and efficiency. Unfortunately, Canada is on a downtrend and I am not sure that it can recover. The higher tax rate and strong social programs geared towards the employees and not favorable to the companies have forced many textile companies to leave. Actually a notable one now operates a majority of it production facilities and distribution here in USA. Although, the knitting and cut & sew is still operating in Central America.” Chris Wilkinson, Atkins Machinery
“One of the most common complaints that I hear is that on-shore companies are not used to fast sample production, quick turnaround time, short runs, special colors, and even advanced quality assurance. The on-shore companies that have kept up with these will have an easier time, as many offshore countries and companies have mastered this. And so there is the “people problem” to contend with. Jeffery Silberman, FIT
“I don’t think there is enough US textile availability if significant re-shoring occurs.” Apparel Executive with US work wear brand
“The supply base has to make investments in equipment. Many of the textile mills have older, less efficient equipment. We have seen some big investments in equipment over the last 2 years and those textile mills that have made significant investments are producing significantly higher quantities in less time with lower operational costs. They are capturing this re-shoring business. “Executive from a leading global dyes and chemicals manufacturer
“Michelle, this is tough for us to say because we are one step away from the actual supply of apparel. Our customers may be applying FiberLok heat seal transfers onto apparel blanks sourced, cut-and-sewn elsewhere. It will be a long time for the apparel industry to put itself back together after being neglected for so long in favor of cheaper retail pricing that has destroyed much of the industry. One good thing about domestic sourcing is that, when there is a level playing field, we can out-design most any of the world market players which could accelerate the domestic sourcing effort. A few cool designs can make the process faster for US/Canada/Mexico to get back onto its feet and replace lost volumes.” Brown Abrams, FiberLok
“The textile and apparel industry is missing a generation of trained operators. Money can build factories and buy equipment. Money cannot buy the needed years of work experience needed to staff and operate.” Chuck Stewart, Tumbling Colors
“Seems to me to be a little of the chicken and the egg. What manufacturing is here I believe is probably ready for it to return because they have weathered the toughest of times. But, those are also probably the smaller, more nimble niche manufacturers.” Anonymous apparel executive
“Due to the nature of many initially builds being smaller here I think supplier will need to continue to be flexible. Many times after a brand is shown in market the volume comes due to the quality/made in USA story.” Stephen Kerns, Sympatex
“Improved technology will enable companies to achieve the volumes, speed and accuracy levels necessary for reshoring or near-shoring to be a viable option. Alongside technology investments, companies should also consider process improvement activities with a special emphasis on integrating lean methodologies in order to compete on the global stage. Every bit of process waste—from people to materials and time—that can be eliminated is a source of competitive advantage. Far too many people view the technology as the remedy to their issues, when in reality the technology is only a tool to be used in a world-class lean production environment.” Roy Shurling, Lectra
“Any manufacturing business regardless of where they are located can always improve in a few areas: Safety, Quality and Turn-around time. People are willing to pay a little more if they can get high quality goods quickly. Living in Southern California and manufacturing in LA gives me a unique perspective. I live fashion and every aspect of it. Los Angeles would be wise to start cleaning up the fashion district and investing some dollars into upgrading the infrastructure of many of the buildings in the area. There are many of these buildings that should probably be condemned but function as manufacturing hubs. It is not safe for the workers and causes many issues within the industry. Los Angeles could also work more closely with those manufacturing locally to help find ways to make it easier and more enticing to bring the business back to Southern California. I know these problems cannot be solved overnight but it’s time to start putting together solutions.” Deanna Hodges, Macada Design Group and Hodges Collection
Based on my colleagues’ input, my personal takeaways are:
– There is definitely continued buzz and activity surrounding the Made in USA/ Reshoring movement, which will continue.
– The skill-level of operators here is key. If they are not up-to-speed, they need to get there quickly. Seems there could be increased opportunity here for training programs.
– The amount of apparel products made in the US is increasing, and will for key items such as luxury goods and other high- margin items or those that require fast turn and low minimums.
– The manufacturers poised to gain the most lasting gains are those that have weathered the tough times here and grown stronger and leaner in the process.
– Continued and increasing focus on quality and right-first-time manufacturing will serve the US supply base well, as always. The quality level of US-made goods can and does rival those found anywhere in the world, but the quality gains must be compatible with price sensitivity. Therefore creative ways to improve efficiences is more important now than ever.
Thanks for taking the time to read, and if you liked this article, please share it with a colleague!
This article first appeared at www.technicaltextilesolutions.com