Combining quality, speed and compliance is important, Worrall believes

Combining quality, speed and compliance is important, Worrall believes

When it comes to developing or adapting an apparel brand or retailer's production strategy, there are six key factors to consider, according to one industry expert. While flexibility, communication and the right partnerships each have a role to play, it's also important to combine quality, speed and compliance. 

"I'd love to manufacture in the UK, but what a challenge for anybody today who wants to manufacture in the UK with a minimum wage and labour costs in places like Dhaka at US$60 a month,” sourcing consultant Philip Worrall told attendees of the SVP Fashion near-sourcing event in London last month. “It makes it extremely difficult for anybody.”

There are five key factors apparel brands and retailers need to think about when managing their production base, he said, with the top one being flexibility. 

“This is a very powerful word...You need to think about your needs in the short, medium and long-term, and you need to be able to adapt to external factors that could affect you such as exchange rates.”

Often when the pound becomes weak against the dollar, brands and retailers start running back to Turkey, Portugal, Romania, and Poland to produce because the pound is too weak to produce in Asia, he argued.

Worrall, who has previously held sourcing positions at department store retailer John Lewis, Lee Cooper and German sportswear brand Puma, also believes that "size matters." 

Taking Sainsbury's as an example, Worrall explained that when the UK supermarket retailer started out, it hired Li & Fung to source and produce its products. With offices across Asia, Li & Fung helped Sainsbury's find the right manufacturer. 

Since then, the retail group has set up its own offices in Asia. With one of Sainsbury's factories in Dhaka, Bangladesh, having a turnover of US$120m, it's not surprising the retailer expects its business to be over $1.2bn in clothing this year. “So size does matter,” Worrall emphasised. 

Therefore, having a team based where your production facilities are, Worrall believes, is important. "Having eyes on the ground – this is what it's about,” he said, adding: “Those eyes can support you whether you're manufacturing close to home or offshore.”

Also key to a successful production strategy is communication, which according to Worrall, is “one of my pet hates and loves”. Production can go wrong when emails are interpreted in different ways, he noted. 

"Not everybody speaks English, but when you do communicate, keep it plain and simple. Do not try and over complicate it because that's when mistakes occur." 

Sourcing, Worrall said, is about “understanding what your goals are and your objectives”.

Quality, speed and compliance 

"Partnerships with suppliers are extremely important,” Worrall stressed. US label Brooks Brothers, he said, has a niche supply base and its manufacturers are working in close collaboration and partnership. 

Having the right suppliers is key, but it has to be a “win-win partnership.” It's also essential to review them in order to “understand what you've actually got”, he explained. Establishing KPIs and targets is necessary to find out whether individual suppliers are performing. 

“If they don't perform, you've got a tool then to go and discuss and understand and make sure changes can occur. But if they're [still] not performing, you've got a reason now to pull away from them.”

That said, if brands and retailers don't record or manage their suppliers properly, Worrall believes “you must accept what you receive – poor quality, poor service and poor prices.”

Therefore, Worrall noted: "Having a much tighter, narrower, focused production base will enable you to improve your margins and become more meaningful with a supplier."

Although having eyes on the ground and the right partnerships are factors for consideration when developing a sourcing strategy, Worrall believes many factories are suffering from “audit fatigue”. “They're being audited one week after the next by a different company,” he said, adding that one factory he visited recently passed an audit for one brand, but failed one the following week for another label.

Asking what standards the industry is working towards, Worrall suggested: “Maybe we should have one system, not try and have a dozen or so compliance companies running around the world. 

“We [the industry] have now generated a multi-million pound business just on compliance and auditing. Is that the right thing for the industry to do? Yes, but there must be a better way than we're doing it at the moment.”