On Demand Manufacturing for an On Demand Market

If you’ve been paying attention to the apparel industry over the last couple of years, then you’re likely familiar with the term “fast fashion.” Fast fashion has been a seemingly unavoidable go-to phrase in the industry, as it articulates a shift to faster manufacturing and tightened delivery timelines. Fast fashion captures runway trends -- new, emerging styles can be on shelves and in the hands of consumers within months, and often with a relatively low price tag. Think brands like Zara, H&M and Forever 21.

However, other associations with fast fashion aren't as positive. Many of these brands are thought of as being low quality and wasteful. In fact, almost 32 billion garments are created for domestic markets each year, with 65% ending up in landfills. All of that textile waste makes fashion the second-most polluting industry in the world. And according to McKinsey and Company, the average consumer purchased 60% more items of clothing in 2014 than in 2000. The implication being that clothes wear and tear more quickly since the shift to fast fashion business models.

That being said, many manufacturers argue that the industry can increase speed to market without sacrificing quality and risking an over-surplus of items.

The answer is on-demand manufacturing. On-demand manufacturing is a business model that embraces technology, innovative manufacturing techniques and smarter shipping solutions. Some boutique manufacturers are thinking about supply chain differently. They are able to utilize real time customer feedback to improve products and capture trends without delay. What this end up translating to is a reduction in waste.

If a product is performing really well, they can respond to that demand and make more, and vice versa. If a new line is not selling, they can rollback manufacturing. Technology-- for example online orders and returns-- allows manufacturers to respond in real time to demand, resulting in less unwanted, unsold products. You only make enough for what people want, instead of filling stores with garments that will never sell.

“There is a long held assumption in the apparel industry that in order to produce items quickly and cost-effectively, then quality must suffer,” says Morgaine McGee, co-founder of manufacturing company, The Vertical Collective. “But we have found that there are creative solutions to maintain a high standard. Additionally, by embracing more efficient shipping strategies, we can tighten delivery windows and allow more time for production.”

For retail giants, like H&M and Zara, this high-quality, low-impact approach may not be entirely possible. That being said, many big brands are taking steps to change by participating in recycling programs and other initiatives to make up for the overstocking. These efforts are being driven by consumer demand for environmental consciousness and more sustainable materials, less waste.

Overall, an increased demand for faster delivery, runway looks, sustainability, and the option of personalization via online retailers is changing the landscape. And, there are manufacturers who can do it all-- industry veteran Katherine Zabloudil sums it up perfectly, “When it comes to accelerated, custom and quality, you can have your cake and eat it too.”

The Future of Manufacturing: Real Time Feedback and Efficiency

How consumers feel about a given company and its products has been the centerpiece of marketing courses and studies for decades. Consumer insights drives advertising campaigns, new product rollouts and, most importantly, the bottom line. In fact, when looking at Fortune 500 companies, an average of 11% of the annual revenue is dedicated to marketing budgets-- that translates to hundreds of millions of dollars each year. Understanding how the average buyer makes purchase decisions and pinpointing what factors contribute to these transactions, is a billion dollar business. And now, getting that information is easier than ever.

The rise of the internet led to an explosion of ecommerce, social media and a whole new way for marketers to understand how people purchase. With online searches and online shopping, companies are now able to see consumer behavior digitally and in real time, creating a treasure trove of usable data and insights. So, how important is this feedback loop? Short answer, very. Organizations that leverage customer behavior data to generate behavioral insights outperform peers by 85% in sales growth and more than 25% in gross margin.

Of course, this works both ways. Real time purchasing insights, also means real time customer feedback. With smartphones in hand, shoppers are researching products, writing reviews, and conducting online price comparisons before they make a purchase. This shortened feedback loop creates an opportunity for businesses to capitalize by building in new efficiencies to the development and manufacturing process that use and encourage this behavior.

For example, let’s say Nike created a new workout pant that has a different kind of pocket on the pant leg-- but via social media they quickly discover that thousands of customers keep snagging that pocket on things because of the way it’s positioned, tearing the pant leg. Nike could more quickly react to that product defect and alter the pocket if they had processes in place to account for this kind of feedback-- saving vast amounts of money on shipping, manufacturing and returns.

Although the example was a hypothetical, there are businesses thinking this way about consumer data, and some have the foresight to put practices into action.

Local Southern California apparel manufacturer, The Vertical Collective, is using real-time consumer feedback to streamline design, product development and manufacturing. Through their unique approach of using customer insights, they are able to determine and make modifications to designs that mirror consumer demand.

By thinking about audience insights as a tool for design, companies with prescience are able to incorporate customer priorities into the planning process to guarantee a saleable product.  

“When companies come to us to revive their products and do a complete refresh of their line, we always ask to see the customer feedback and social media comments,” says The Vertical Collective co-founder Katherine Zabloudil. “Buyers and brand loyalists are the key to unlocking detailed design and functionality elements that provide a point for difference.”

Customers know what they want, are willing to share those thoughts, and now have the venue to do so. Smart brands will listen and learn.

How the Web Broke Retail: The Disruption of the Second Largest Industry in the World

The Internet’s Effect on Apparel Manufacturing

Throughout history there have been several major disruptors: the printing press revolutionized the exchange of ideas, the telephone changed how people communicate, and the internet-- well, the internet changed everything. These disruptions cause a rebirth, the death of the old and the rise of the new-- typically giving way to innovation. Over the last two decades entire industries have gone extinct, and businesses have had to quickly adapt to the migration online. One industry that is still trying to find its place in this new world, is the apparel industry.

In the last month, retail giant Payless announced bankruptcy. Another casualty of the “Amazon affect”-- people getting everything they need online, and getting it same day. This relocation to online purchasing renders brick and mortar useless for younger generations. Many may argue that the predecessor to Payless is the online only shoe store Zappos. Or the complete decimation of travel agencies with the rise of [name your preferred airline site here]. And this trend is not exclusive to shoes or travel. According to the Pew Research Center, 79 percent of Americans have shopped online. However, only 10 to 15 percent say they shop online one or more times a week.

The apparel industry has seen a complete upheaval in how clothes are distributed and purchased. And with the global apparel market being valued at 3 trillion dollars, 3,000 billion, and accounting for 2 percent of the world’s GDP*, the impact of this is huge. People want high quality goods, purchased online and delivered at their door tomorrow.

With less brick and mortar stores to hold large selections of merchandise, and consumers demanding quick delivery, apparel manufacturers are rapidly innovating on how to reduce excess inventory and unsold product, while trying to dramatically shorten their production timelines.

Co-Founder of The Vertical Collective Morgaine McGee says, “With so many retailers moving online, manufacturers have to innovate and respond to consumer demand by creatively accelerating the development and production of goods.” The apparel expert continues, “Not only has speed to market become a major factor, but so has control of inventory. Excess product means paying for more storage and therefore more costs. This leads many to on-demand manufacturing -- you buy one, you make one. Less waste.”

Although models of fast-development and on-demand merchandising are being widely adopted by the apparel industry, many companies are unable to adjust. The traditions that built this industry have become its achilles heel. Partnering with companies like The Vertical Collective, allow large companies to benefit from the nimble ways of a manufacturing start ups. Those that can integrate the old with the new are finding success with a combination of approaches. But those that cannot adapt and adopt, will eventually be left behind.  #RIPPayless.

Trump's Tariffs Laws Affect Local Apparel Manufacturing: Demystifying Trade Conversations

Trump's Tariffs Laws Affect Local Apparel Manufacturing: Demystifying Trade Conversations

Lately, there has been a lot of news about international trade policy, new tariff laws and a “trade war” with manufacturing power-house, China. For many, this has little impact on a day to day level. When people think tariffs, they usually think of major industrial exports and imports like steel. But recent laws put in place are affecting many small businesses across the United States. Especially those who work frequently with Asia.