BCG CONCLUDES LOW-COST COUNTRY SOURCING COULD END: Boston Consulting Group has completed a study on low-cost country sourcing in which the key theme is, “Cheap labor is becoming a rare commodity and the number of low-cost countries is dwindling.”
The report, “Apparel at a Crossroads: The End of Low-Cost Country Sourcing,” takes a look at rising labor costs, moving manufacturing operations from China to open production centers such as Myanmar and Ethiopia, and production inefficiencies.
The authors conclude that sooner or later, there will be no low-cost countries left to meet the apparel industry’s changing needs. It also noted that while the shift to Myanmar or Ethiopia may result in some cost relief now, production inefficiencies can offset those cost savings, as nonlabor costs continue to add up.
The BCG report recommends that the industry focuses on innovation and outlines the technologies that could help to lower production costs. Some of the ideas noted include: bonding and gluing technologies that can produce a small item in less time than traditional cut-and-sew techniques; the use of digital printing technologies to reduce the number of samples and design-to-shelf times, and waterless dyeing techniques that can speed up the process with minimal environmental impact.