The world of global manufacturing is spinning faster than ever.
Dynamic changes — from transformations in China’s production landscape to instability in raw material prices — has caused many of the crystal clear norms to become unfocused. Executives have been forced to take fresh approaches and develop new ways of thinking toward where they make their apparel.
When it comes to having a successful sourcing strategy in today’s volatile environment, Rick Helfenbein, president of Luen Thai USA, turns to none other than Albert Einstein for some sage advice: “You have to learn the rules of the game. And then, you have to play better than anyone else.”
The problem, said sourcing experts at the WWD Global Sourcing Forum, is that the rules are changing rapidly and the playing field is in flux.
So Helfenbein offered some other pertinent adages for his fellow manufacturing executives. He told them to “put your customer first,” don’t exit China too fast even though costs have risen significantly, that “the consumer doesn’t care where something is made” and that “the herd mentality is over” and “we are now in the era of analytical sourcing.”
“This supply chain game has a new challenge every day,” Helfenbein said. “The supply chain is always in transition and the transition feels uncomfortable. Nobody likes to change. We all want to come to work every day and do our jobs the same way, but that’s not how it always works. That’s why analytical or sensible sourcing is important.”
Helfenbein said the most important sourcing strategy today is not what country companies are sourcing in or how cheap they can get their production, but is a clear focus on what their customer wants.
“The consumer doesn’t care where something is made,” he said. “They care about what is made. Is it the right item? Is it the right price? Is it marketable? Is it timely? If you don’t focus on your customer, you’re going to lose them.”
With the evolution of the retail landscape and following the economic turmoil of the last few years, there are key lessons to be learned, Helfenbein said. Chief among those, he said, is that “cheaper is not always better.”
“The second is that the value-oriented customer today demands good quality,” he said. “The third is that today’s retailer is driven by a different economic model — this not fulfilling a shipment, not delivering on time is out the window.”
Peter McGrath, founder of McGrath International and former J.C. Penney Co. Inc. product development and sourcing executive, said in today’s volatile environment for raw material costs, sourcing executives should “average your season’s buying strategies into three segments to insure an averaging of volatile prices.”
“In a world of rapid elasticity, business relationships with mutually agreed-upon goals will take you much further than one that is based upon a transactional nature,” McGrath said. “With information technology helping us redefine business relationships, and structural changes such as rapid verticalization within the manufacturing portion of our supply chain, how we work together has dramatically changed. You no longer can win without partnerships.”
He said it’s important to understand and share information between suppliers and customers in areas such as margins, costs and efficiencies, as well as the ability to secure credit and the structure of payment terms.
“Changing terms on a supplier in Bangladesh by 30 days substantially increases the factory’s interest expense,” McGrath said. “But it also causes many unseen consequences, such as higher prices or delivery delays due in part to the lack of credit availability.”
Buying closer to need requires companies to be more flexible in the supply chain, he noted, so sourcing organizations must be faster and more responsive to consumer demand.
“We will have to create more product that innovates, performs and delights,” McGrath said. “This will require sourcing executives to more effectively understand the range of complexity around the products we source.”
Helfenbein also stressed that it’s all about speed to market and having the right product.
“While you’re doing all these things, you still have to be lean in your operation. You don’t have to pick a country, you have to pick a goal for your customer. You have to evaluate a level of quality that you will not stray from. If it comes in the store and it is wrong, throw it out of the store because your customer will get the wrong impression. Check your lead time. You can go longer if it’s basic. There are things that you can do to balance your sourcing strategy.”
Brooks G. Tippett, vice president of operations, and Ann Laidlaw, textile color supply chain manager, at Pantone/X-Rite, talked about the importance of having unified color controls throughout the global supply chain.
“To effectively compete in this global marketplace, it has become more essential for companies to set up a color management process that incorporates tools facilitating product speed to market, production cost efficiencies and good quality control,” Laidlaw said.
Tippett said there are four key components of an effective color management process: A high-quality color standard, a spectrophotometer, digital color communication and procedures that effectively and accurately use all of these tools.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)