A domino effect is currently taking place in the apparel manufacturing industry. Early in March, to bend the Covid-19 curve, countries started their lock-down orders and retail stores began closing sores. As soon as apparel brands get wind of orders from health officials to close stores, they started canceling orders with their manufactures. Internal sales projections are lowered and styles with lower margins are canceled. Manufacturers are at the mercy of the decisions made by brands. Previously committed forecasts by brands are now thrown out the window. Nobody knows how long the lock-down is going to take place, or how much sales will decline. Thus, the best approach for brands is to cut, cut, cut orders with manufactures.

This becomes the trigger which sets off the domino effect. With sudden reduced orders from brands, manufactures are now scrabbling to meet their immediate variable costs. Those with low cash reserves, and greatly reduced future orders, start closing down their factories. Manufactures across South East Asia start laying off thousands of workers per factory. No manufacture know when the orders are coming back, and if they will ever come back. The so called “extended supply chain” in the apparel industry is a noncommittal relationship established between brands and manufactures. When times are good, manufactures know the orders will keep on coming. Hence, they don’t press too hard on the brands for their monetary commitment on the forecasts they place. However, when orders stop then they have no contract to hold the brands accountable to. In the apparel industry, brands have no formal commitment to manufactures on the their forecasted orders. All risk is taken up by manufactures. They hire the workers, pay for the factory and equipment, and hope the orders will come. So when the orders stop, the factories shut down.

As to Darwin’s theory, the survival of the fittest, only those with a healthy cash reserve will survive this pandemic. Manufactures with multiple factories around the world are scrambling to close shop in locations where it’s no longer profitable. Overseas workers are stuck in foreign countries, and waiting for airline to resume flying to take them home. Job losses will continue to ripple through the apparel world in the coming months. Once the dust settles, who will be left standing?

If in 2021, a vaccine is available to the public and life returns to normal. Then the challenge will be where to place new orders because so many manufactures have closed down. Brands will be fighting to get back in line to secure capacity and place orders. Manufactures will be scrambling to hire new workers, train them, and pump out orders at the same time. We scrabble to ramp down, and will scramble harder to ramp up. Nothing in apparel is easy, and messy it has always been.

The challenge for apparel brands after COVID-19 will be where to manufacture their goods. Maybe the lack of available traditional manufacturing capacity around the world will increase the demand for more automation in the production process. Thus, allowing manufacturing work to be done in the developed world that is more capital and less labor intensive. This may be further propelled by the desire of customers for more customized products. I’m looking forward to the day I can use a kiosk and assemble a pair of pant as if I were creating my pizza request. Place my order online and have the machine produce my one-of-a-kind pant in one hour. If I want 5 pockets, who’s there to stop me! Don’t worry sourcing manager, increase the FOB cost because I’m paying for the 5 pockets, and you’re only making one pair so it won’t drive down your target margin for the season.

Time flies, it really does. My last blog post was in 2013 and it does not feel as if 7 years have gone by. New year, new beginning, so here it goes! Actually it’s already the later half of 2020, but hey, better late than never! I’m glad I’m starting up my blog again, thanks to the encouragement of my husband, I already have a few new topics I’m excited to be sharing with you all.

Back to our topic today, black yoga pants. As COVID-19 hit North America in March, many of us got sent home to work-from-home. We soon realized the work clothes that are currently occupying the majority real-estate in our closet will be untouched for quite some time. What I’ve learned, and many of my friends as well, is that we really only need our “black yoga pants”.

No longer needing to wake up early, for me it was 6am, and start my commute to avoid traffic. I now wake up at a leisurely and very comfortable 8am and start my day with a relaxing and nutritional breakfast. I then shower and change into one of my 6 yoga outfits that I rotate throughout the week. I feel conformable and relaxed as I open up Zoom, with my tea in hand, and start my new normal way of working remotely.

When there is a one hour gap between the Zoom meetings, I would pull up my yoga mat and start practicing. Just like that, my new work clothes not only provide me comfort, it also saves me time from changing in and out of outfits as I quickly transition from working to working out. I don’t know how others feel these days, but I feel amazing! As the kids say these days, I’m living my best life!

This leads into one of my life long questions: why are work clothes so uncomfortable? Also, most importantly, why am I constantly disappointed from products that just doesn’t deliver the unicorn attribute of “technical work clothes”? I’m constantly excited when I read news articles introducing a breakthrough brand that clearly identifies the current gap in comfortable work clothes, and how their products will revolutionize the apparel industry. Yet, their products are often disappointing and not as revolutionary as they are marketed. The material is often off the shelf fabric from the fabric mills and have no real technical innovation. They all miss the one, the main, and the most important key to a successful apparel product. That is, a good apparel product starts from the fabric.

In my years working in the apparel industry, the process of designing for a new style starts with the designer’s sketch of a product. The material team then scrambles to fill in the slot of “fabric” in the Bill of Materials. Fabric is always secondary when it comes to product design. In the product world, designers call the shots. Material developers often have little or no time to develop new fabric for the new product. Thus, often provide off-the-shelf fabric to the designers. What happens is then no real great fabric gets developed and everything in the new season feels as if nothing has changed, and it hasn’t because it’s using the same old fabric as the previous season.

This is why when you’re like me, who has found the perfect black yoga pant you end up buying 3 pairs. The fabric mill that produces this yoga pant material has been a vendor I’ve worked with since my first job at Nike over 20 years ago. When I mention how I love this one fabric they developed, they offer to give me a whole roll of this fabric! This was when a light bulb went off in my head. Why don’t we make everything out of this one amazing fabric! If you’ve ever imagined a pair of pants that is buttery to the touch, soft and cozy next to skin and also provides the wicking functionality, then this is the pant for you.

This material literally makes me feel as if I have won the lottery every time I put it on. This is how happy I am while wearing my yoga pants. The question is then, why don’t we stick to the material that works instead of telling material developers to develop a new fabric for every new style!

Somehow in the design world, customers need to be enticed by the new look of the products, and at the same time new fabric has to be used. Instead of leveraging the home run fabric in more products, designers continuously request multiple versions of the same fabric to be developed due to the pressure to provide novelty from the new season. The result of the extensive work in fabric development is slightly different versions of the same fabric used across multiple styles, and none of them are a home run fabric due to the fact their quality has been diluted. Hence, when new brands launch supposedly “ revolutionary products”, the reality is they are selling the same thing- using the same existing fabric as the rest of the world but marketed as something different.

In an ideal world, I would use my yoga pant fabric to make bra tops, tank tops, t shirts, button up shirts, and more! Wait, actually, this is currently taking place for one yoga wear brand. They have recently launched a whole line of products based on this one fabric. Guess what, I’ve bought more of their products because of this brilliant strategic move.

The fabric has created a sub set of a brand of products for this apparel company and it’s probably their current biggest revenue driver. All goes to show how important is a great fabric to the success of the product line.

As we continue to work-from-home the clothes we use to wear back in March are going to be slowly replaced with more comfortable pieces. This is a great opportunity for new brands to emerge, and provide versatile products with both aesthetics and functional attributes. I’m excited to be contributing as an on-line shopper and support those brands with my purchases. That’s another huge perk from WFH, you can shop in between meetings and not have to worry about hiding your computer screen from your co-workers!

The rise of B2B marketplaces like Alibaba and Taobao has led many to assume the apparel sourcing process has become easier. Contacts can be made as easily as sending an e-mail detailing the specifications of the products you are sourcing. Tell them what you are looking for and they send you a sample of their product. Yet, it is really as simple as that?

Many companies have tried this route with little to no success. These manufactures often request very high minimum order quantities for production, charge for proto samples, and often deliver a product that fails to meet the requirements. Many companies feel discouraged and confused about the sourcing process. Let us take a few minutes to understand why these connections don’t end up working out.

There are four types of players within the manufacturing ecosystem: Large-scale manufacturers, small-scale manufacturers, subcontractors, and agents. The large-scale manufacturers are often older players whom have built a solid customer base. They mostly work with large brands and have facilities all over the world. Small-scale manufacturers are either small because they are new entrants, or are small and remain small because they are still working on landing the bigger accounts. Subcontractors are small manufacturers with no sales team, and mostly work as back-up facilities when the large-manufactures max out on capacity and use them as their own production facility. Agents normally have no manufacturing facility, and partner up with manufactures.

At the beginning of time, let’s say 20 years ago, apparel manufacturers mostly relied on agents to bring in customers. Most manufacturers did not have the sales team to reach out to new customers, and so relied on middlemen. Today, direct sourcing has become the method of choice for most apparel brands. Going straight to the source of garment factory, fabric mill, or even going so far upstream as the yarn supplier. Sourcing directly reduces risk in the supply chain and gives companies maximum control over quality.

The downside of B2B marketplaces is you don’t know which type of player you are contacting. The information stated on their website may be fluffed up, or even completely made up. The supplier whom you think is a large-scale manufacturer may be an agent who may over promise and under deliver because he has no control over the manufacturing process. That is why many times what you ask for is not what you get delivered.

This is why when it comes down to it, sourcing requires a lot of on-the-ground work. You need to be present, meeting new suppliers face-to-face. Visiting and auditing a supplier’s facilities is the only way you can truly know who you are working with. The best way is to consolidate the number of suppliers you have to a number the company can handle. Also, consolidate each sourcing trip and visit as many manufactures as you can on a single trip. In many ways, consolidation is the key to sourcing.

We’ve all been here. In a long term relationship, maybe 4 to 5 years or so. Things were going so well in the beginning, but then it all changed and you are wondering if it is time to break-up and look for someone else. What I’m really talking about is a relationship with your manufacturer/ supplier. The rule of the industry has always been to “stick with the devil you know, and not take a chance with the devil you don’t know”. Yet, sometimes it is just time to move on?

Every apparel brand needs suppliers to manufacture their creative products for them. Back in the day apparel brands had sample rooms within the company or even a manufacturing facility that worked with design on making the initial samples. Those days are gone. Thanks to cheaper labor costs overseas, most apparel companies have worked hard to outsource everything to their manufacturer. The manufacturers have taken the responsibility of creating samples from mere specifications of measurement (lots of numbers) as well as the actual product. They have become the transformers of mere ideas into reality. The added value the manufacturer provides has made them ever more valuable in the supply chain.

Time, money, and effort are spent in finding the right manufacturer for your products. Then come the factory visits, audits, terms and price negotiations. The complete process can take up to a year before you can move on to prototyping your products. Then you place your very first order with this manufacturer, keeping your fingers crossed that it goes smoothly. The first order may have a few hiccups, but the product pieces manage to arrive on time and off they go to the retailers. You pat yourself on the back for finding such a great partner, and hope it turns into a long and happy relationship.

We all wish for happily ever after, but it takes only one crisis to jolt us back to reality. It could be repeated delayed deliveries or quality issues; or the simple realization that the one you thought was putting you first is no longer doing so. New apparel brands pop up every year, and some like Under Armour become sensations that grow like they’re on steroids. It used to be that your manufacturer replies to your e-mails within a day, then it is two days, then weeks of no reply. The reality is, you’ve been bumped from the top of the list. Most apparel brands have a long list of manufacturers they have “phased out” or in literal terms blacklisted. Hopefully you have a few suppliers you currently work with, and are not putting all your eggs in one basket. Sometimes it is quite possible to rekindle old flames if both parties work to identify and resolve the reasons why they broke up in the first place.

Love and sourcing are very much alike. We are continuously hopeful that the one we meet is special and can grow with us in our life journey. You’re willing to work together on all your problems and go through the ups and downs of life together. In return of investing your time and energy in developing a long-term relationship, you receive stability and reliability. We all love a happy ending, and through hard work it will come true.