Blog: Commodity cost savings hard to pin down
Leonie Barrie | 20 May 2015
Apparel and footwear brands and retailers should be benefiting from tumbling commodity prices, especially for oil and cotton – but many are missing out on significant savings by failing to truly understand their value chains. New insight suggests that instead of focusing on where their products are made and moving production to lower cost countries and regions, companies should instead pay more attention to how they are made.
Separate data suggests global cotton stocks are expected to decline for the first time in six years during 2015/16, as higher beginning stocks are offset by sharply lower production.
Sporting goods giant Nike Inc has pledged to expand its advanced manufacturing operations in the US – with the creation of around 10,000 domestic jobs – if "fast-track" powers are passed and the Trans-Pacific Partnership (TPP) agreement is finalised. But while the action on Trade Promotion Authority (TPA) had a bumpy ride during the week, a Senate vote is now imminent before moving on to the House vote, which is likely to take place in June.
Tougher and more regular supplier audits and the phasing out of hazardous chemicals form part of Puma’s new sustainability strategy – but the company admits it still has to work to do on the use of recycled materials.
And hundreds of production facilities in India joined the Global Organic Textile Standard (GOTS) in 2014, helping the initiative to increase its certifications by 18% over the year.
VF Corporation is exploring potential apparel and footwear uses for an innovative new technology that adds high performance finishes to fabrics without the use of water or heat. The new technology will be trialled at its Global Innovation Centers.
And a team of researchers has successfully created a new way to embed transparent, flexible graphene electrodes into textile fibres – potentially paving the way for clothing containing computers, phones and MP3 players.
The US West Coast ports dispute is having a lingering impact on US apparel import figures, with the latest data for March showing year-on-year shifts skewed by logistical bottlenecks. Perhaps the one clear trend is that the big winner was China.
Visibility into the entire apparel and textile supply chain – or "monitoring down to the mill" – is one of the biggest challenges facing brands and retailers – and one that a new software tool aims to tackle.
And the latest software from Methods Workshop is designed to help retailers, brands and manufacturers accurately predict a garment’s labour costs by answering just a few questions about the product – and lets them compare costs across different sourcing locations.
Meanwhile in other news, 72 people have died in a fire that gutted a footwear factory in the Philippines; Sri Lanka’s government has agreed to set a minimum wage for private sector workers, including those in the garment industry; and Inditex has dismissed claims that its Zara retail fashion business has failed to resolve "numerous labour rights violations" in its supply chain in Brazil.
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