Manufacturing within the fashion industry is not the prosperous industry it once was. With jobs flying overseas and factories closing, we saw the emergence of US and UK clothing labels reading “Made in China”.
Today, over 90 percent of US clothing and apparel is imported, employing only 135,000 Americans, compared to the 939,000 back in the 1990’s. Realizing this trend within the industry, the US and UK are bringing their brands home, with a number of brands jumping on board.
In addition to a growing workforce, companies can potentially benefit from more modern areas, such as textile and material advancement. The re-emergence of ‘reshored’ manufacturing has also allowed for concentration on premium garments with relatively small runs. By keeping manufacturing close to stores, brands are able to build an adaptable supply chain, with an added agility for clothing distribution.
Some argue, however, that cost is the major player in overseas vs. local manufacturing. Brands are being challenged with the intense pressure of releasing immediate collections at a lower price. Countries like Mexico and Peru are matching the US on speed for market, for a fraction of the cost.
Tanya Menendez, co-founder and chief marketing officer of Maker’s Row, points out that, “You don’t know what’s going to happen to your money…” Local suppliers are granted with the advantage of immediate consumer feedback, before placing large orders. An overseas manufacture has no accountability and the potential for legal action is limited.
The idea that reshoring will dominate the fashion industry is highly unlikely, with so many high-end brands demanding large shipments for a fraction of the price. Given time and the investment of major players, there are instances where local manufacturing makes sense within the fashion industry.
Yes, reshoring fashion can be worth it if you look at all of the costs and risks and not just the labor cost or “price”.
The benefit of reshoring apparel manufacturing is in the total costs. Offshore apparel manufacturing leads to high shipping costs, high carrying costs of large inventories and long lead times. Reshoring allows for smaller batches with more flexibility for customization, style changes and delivering the product to stores on time for consumers.
Companies are recognizing that with the use of the refined metrics of total cost of ownership (TCO) to uncover the hidden costs and risks of offshoring and reducing costs with sustainable strategies such as robotics, improved product design, innovation, automation, and LEAN they can increase competitiveness and manufacture in the U.S. profitably.
The Reshoring Initiative Can Help
In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the not-for-profit Reshoring Initiative’s free TCO Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/tco-estimator/