Fibres and fabrics: Cutting costs in fibre supply

3 November 2014 | Features & Interviews | Source: Raghavendra Verma

Apparel and textile companies looking keep down costs in fibre and fabric sourcing and production, at the same time as ensuring supplies keep flowing, are turning to a number of different strategies.

Software can help brands better manage their fibre and fabric purchasing, saving costs and avoiding wastage down the supply chain through earlier sourcing mistakes.

For instance, US-based Centric Software's product lifecycle management (PLM) solution can help apparel companies track all the details of their inputs. The company opened its first Asia office in August in Shanghai, China, and apparel companies operating there will benefit from the fibre and fabric management features of the Centric 8 PLM, says Ron Watson, Centric's vice president of product management.

Chris Groves, Centric's president and CEO, also notes that "as the Chinese consumer product market expands and becomes more sophisticated and complex, so too are companies' business processes..." He adds that the mainland Chinese manufacturing sector "is ripe for PLM's efficiency, business benefits and ability to manage market complexities."

Centric 8 allows apparel companies, if they choose, to grant their suppliers limited access to the system to update details about their fibres and fabrics. Brand managers can see, for instance, a detailed table listing the make-up of a fabric, down to the fibre.

"Specifically for high fashion companies, they tend to get a lot more into the detail of the product, the fibres...they want to know what the content is of the fabric they're developing so that they can use that not only for pricing but also for determining how much content is made up of substances," he says.

This is particularly important to make sure certain substances that are regulated, such as chemicals, do not exceed the allowable limit in the product and cause regulatory (and hence financial) problems later, he adds.

Companies can also more accurately track - and reduce - their costs as the system links cost information directly to the product design, monitoring costs for a particular amount of fabric used.

Some companies are also seeking supplies of fabrics that claim to be more resource efficient and save in operating costs, such as using fibres made from bamboo, notes Mike Flanagan, CEO of UK-based consultancy Clothesource.

However, he cautions brands against hastily signing on to "wonder fibres" based on lauded benefits, and encourages them to fully evaluate the merits of such solutions. He adds that some of the best solutions are often more mundane and "less sexy" by comparison; for example, he notes various projects working to raise strains of cotton that use less water to produce.

Indian chemical challenges
In India, yarn manufacturers can face tough supply challenges that require the simple solution of maintaining large reserves of polyester fibre.

One problem is their dependence on Indian chemical manufacturing firm Reliance Industries for supplies. "Normally we maintain a 15-day to one-month inventory to take care of any disruption in transportation or by the maintenance of plants," says Darshan Lal Sharma, managing director of Vardhman Yarns & Threads in Ludhiana city, adding "we have to block money and interest costs add up."

Sharma tells just-style that as Reliance supplies are made in Mumbai, far from Ludhiana, in Punjab, managers also have to take transportation time into account when planning reserves.

Meanwhile other companies keep a close look on fluctuating feedstock market prices to ensure costs are kept down and supplies are maintained. Crude oil price changes this September resulted in a 6% to 7.5% fall in key ingredients (monoethylene glycol and purified terephthalic acid) needed to make polyester yarn.

"In an environment of falling prices, everybody is waiting before buying and the stock pipeline has turned empty," Jayesh Pathak, president of the Bombay Yarn Merchants Association, told the Business Standard newspaper, adding that, "those with high-cost stocks are the worst affected."  

Meanwhile an increasing number of Indian companies are using staple fibre blends with cotton, nylon and polyester textured yarns, to equalise cost fluctuations and ease supply risks, says Surendra Kumar Agarwal, a yarn manufacturing technical service provider in Lucknow, a textile manufacturing centre. 

Furthermore, Agarwal says "there is always a regular improvement with respect to quality control systems and increase in speed of machines used for fibre making."

Blended yarns
The use of blended yarns is also proving popular in China, where cotton prices still run high - and Chinese manufacturers are also considering importing cotton yarns if necessary.

The high prices and the popularity of these alternatives was particularly evident in May, when the average price of Chinese-made cotton yarns dropped about 4% year-on-year to CNY17,434 per tonne (US$2,794.80), but sales remained stagnant. Demand for much cheaper blended yarns continued to grow. 

"As clothing made of blended yarns is getting more popular among Chinese consumers, manufacturers don't have to stick to pricey cotton yarns," says Xu Xiaomiao, analyst at SCI International, a research firm based in Zibo, Shandong province, eastern China. 

Such demand for blended yarns to replace costly natural fibres has prompted companies to invest in blending technologies. For example, one of Chinese largest wool suppliers Ningxia Zhongying Cashmere, based in the region of Ningxia, northwest China, has recently introduced a new blending technology to blend cashmere with lower cost fibres such as wool, linen and polyvinyl alcohol fibre. 

In Shanghai, researchers at Donghua University last November introduced a synthetic nano-cellulose developed from micro-organisms. According to the university, the new fibre has the same chemical structure as natural cotton fibre.

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With additional reporting by Wang Fangqing and Kitty So.