Low offshore labour rates, top Spanish fashion retailer Zara's successful supply chain, and a new Australian wool initiative were among the many hot topics discussed at the UK's recent Clothing and Textile Industry Forum annual conference 2001.

Around 170 delegates gathered at a central London hotel to hear a range of top-level speakers from the United States, Europe and Australasia address supply chain issues and reveal survival techniques for the domestic textile and clothing industry.

Launched last year, the Clothing and Textile Industry Forum is a government-backed project aimed at helping to create industry champions and find a long-term solution to global competitive pressures.

Delegates attending the day-long conference included representatives from some of the biggest names in the industry such as Marks & Spencer, Arcadia, Allders, Littlewoods, Daks Simpson, Benson Turner and Thomas Pink.

Also present were members of the forum's steering group including GUS, House Of Fraser, Next, Oasis, Allied Textiles, Coats Viyella, Hield Brothers, ARC Sports and Penn Nyla.

E-commerce
The event began with a welcoming address from Douglas Alexander MP, Minister of State for E-Commerce and Competitiveness, who highlighted the crucial role e-commerce and Internet websites play in the business world today.

His talk coincided with the release of a government report into the impact of e-commerce on the clothing sector. One of the survey's key findings was that nearly half of the companies surveyed believe e-commerce improves the quality of the service they offer, while nearly a quarter believe that their profitability and productivity has been improved by the use of e-commerce.

Also addressing delegates at the start of Thursday's conference was Industry Forum director, Ken Watson, who said: "The title of this event, 'The Continuing Challenge To Make The UK Retail Supply Chain More Competitive,' reflects a growing concern within the industry.

"Our international programme has been carefully constructed to present a fully rounded view of the industry illustrating how we are taking steps to improve the supply chain by utilising more domestic/local sourcing as part of a balanced sourcing strategy.

"It will illustrate how supporting and developing supplier to retailer relationships can unlock value within the supply chain. The supply chain we consider is from concept to customer. This event will highlight issues, offer potential solutions and help the Industry Forum assign priorities over the next 12 months."

He concluded: Our project work is accelerating and our projects are proving successful. We have proven tools and experience and look forward to improving companies' performance through our work."

Cheap labour
Mr Watson was followed on to the stage by Dr Roger Warburton PhD, director of US-based Griffin Manufacturing, who gave a presentation on the cost benefits of quick response manufacturing partnerships.

Dr Warburton, whose Vermont factory employs 200 people in the cotton Lycra business, posed the question: "As offshore labour rates are so low, why should anyone support domestic manufacturing?"

He highlighted various hidden offshore costs such as high staff turnover rates and various logistical costs, as well as the disadvantages of fixed contracts and capital being tied up in foreign factories and production units.

Based on his experiences in the industry, he described a situation where a garment manufacturer taking advantage of cheap offshore labour costs would lose a crucial $950,000 order unless it could make and deliver 500 pairs of white shorts in a week.

Due to "lousy forecasting" it now had to rely on domestic manufacturing capacity in order to meet the seven day deadline. Dr Warburton added that a quick response capability like that meant domestic, not offshore, manufacturers could respond to changes in demand rapidly.

He concluded that this not only meant companies could increase sales and keep customers happy by meeting that demand, but if the opposite happened then it could quickly stop production so it did not waste valuable funds on goods that would not sell.

Department store
Next on stage was Tad Paluchowski, buying and merchandising director (fashion) for leading UK department store chain Allders, who gave a presentation on striking the balances between national and own brands.

He told delegates that in order to meet retailers' needs they should share market research, develop materials and designs and concentrate on the development of prototypes and samples, fitting and technical support, manufacturing flexibility and follow-up support.

Mr Paluchowski, whose company has 21 department stores and 20 home stores and last year posted textile sales of £200m and clothing sales of £160m, added that it was extremely important for buyers to view garments that had been fitted on real people and not just stands, as buyers found the latter process both annoying and frustrating.

Forum help
Next up was Mike Shotton, chairman of Quantum Clothing Group, who described how the Industry Forum has helped the group's Leicestershire-based firm, Aspira, improve its design process with impressive results.

Aspira employs 380 people in the socks and hosiery market - a market that has declined rapidly from £480 million a year to around £380m. Their project brief was to design and market a hosiery product to counteract the life-threatening effects of Deep Vein Thrombosis (DVT).

The medical condition is associated with prolonged inactivity - such as sitting on an airplane. Mr Shotton told the audience how best practice tools delivered by the Industry Forum Team enabled the company to design, manufacture and market "flight socks" in just six weeks. To emphasise his point, each delegate received a free pair of the colourful socks.

Zara's success
Spanish retailer Zara came under the spotlight next in a lively presentation by Prof Ludo Van der Heyden, professor for technological innovation at the INSEAD business school, based near Paris in France.

Zara fashions

He talked about the results of INSEAD's research into the successful Zara business model. Concentrating on the company's five day supply chain, he described how the firm spent just half a day designing a garment, two days making it and then two days ticketing it and getting it on the shelves.

Prof Ludo described this process as "Fashion Without Waste" and Zara as "Wal-Mart For Fashion". He added: "Zara is a very humble player but in its niche is a very successful player. The quality is 'freshness'. It only has three shirts, sizes and colours, so has very few choices but over time that becomes a zillion choices as it can adapt so quickly."

"Zara's designers are sent to the warehouse to see what they have in stock and they have to design something out of that. Zara only produces what is sold and this reactive supply chain eliminates waste.

"Profitability at Zara is so high when margins are so low because excess stock and unmet demand are avoided by stopping production when the market saturates. Like every other business, Zara's aim is high customisation and continuous line flow.

"Its manufacturing facilities are in Spain in the Galician region and also just off the coast. This helps to speed up the supply chain process and adapt to customer buying habits."

Answering a question from a delegate, Prof Ludo said that when Zara expands its operations in America it would set up more production facilities in Mexico.

Australian wool
The final speaker of the day was Dr Peter Cull, business development and innovation manager for the recently-founded Australian Wool Innovation (AWI). He revealed how a new initiative for Australian wool producers could impact on the UK textile and clothing industry.

Funded by a two per cent levy on wool producers, the AWI has an annual budget of $35 million to provide funds for research and development and innovation aimed at increasing the profitability, productivity and sustainability of Australian wool producers.

Mr Cull described how his organisation is looking for research and development partners including spinners, weavers, designers and retailers, and how a wool pipeline study was being carried out to identify key issues and potential projects.

He concluded: "A competitive supply chain for wool textiles is an explicit part of AWI's investment goals - let's make profits together. UK designers and fabric makers are among the best in the world - AWI needs more of them."

Following the morning's presentations, delegates were put into groups for workshops on subjects such as offshore sourcing, product development, greater collaboration between companies and forecasting inaccuracies.

A group of panellists then had a lively debate on a wide range of supply chain issues facing the UK clothing and textile industry before conference chairman, Wendy Austin, brought the curtain down on a successful Industry Forum

By Richard Ewing


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