Leading retailers and manufacturers,including the chief executives of high street giants Next and New Look, recently took partin an industry-wide debate on the future of UK manufacturing. And the over-riding messageto come out of the day-long discussion was clear: there can be a successful future for theindustry but only if immediate changes to many areas of business are made.
The setting for the event was the DrapersRecord Challenge Conference in London, organised in conjunction with The Apparel andTextile Challenge, a government backed organisation aimed at improving links betweenmanufacturers and retailers.
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Speaking at the conference, Jim Hodkinson,chief executive of New Look commented: “We care about UK manufacturing because if wedesert our UK manufacturing base, we destroy UK jobs. We take money out of the pockets ofour own customers which means they can no longer afford to shop with us. And when thosejobs go, that places a burden on the social security system which we have to bear in theform of higher taxes. It is in the interests of everyone that this situation does nothappen”.
He continued: “We need to hold on toour manufacturing base. The question is how? There’s got to be something in it for theretailer – and it’s certainly not price. On the whole, labour costs here make it hard forUK manufacturers to compete on price alone. And it is price, above all, that is drivingjobs out of this country”.
So does this mean the future is withouthope? “No. I believe there is a great deal UK manufacturers can do to fightback”. This includes developing the right mindset: one that is open to change,flexible and responsive to the needs of customers. New Look prides itself on getting a newproduct from the drawing board to the sales floor in just fourteen working days – oftentaking the decision to source in the UK to achieve this target. And one of the ways ofmaking this a success is by working in “true partnership” with the manufacturer.”By working closely with the retailer”, he said, “manufacturers may be ableto achieve a much higher level of efficiency that enables them to compete much moreeffectively with overseas competition”.
Total Flexibility
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By GlobalDataDavid Jones, chief executive of Next added:”The quicker the retailer can get from order to delivery the better, as consumerdemands are so swift to change. One of the most important things to help this is achievingan attitude of total flexibility within the business”.
He also offered advice for UK manufacturershoping to work with Next – and although all the pointers put forward seem obvious in theirmessage they underline the fact that many manufacturers could be losing potential businesssimply by presenting themselves and their companies in the wrong way. For example, MrJones recommended that companies draw up a full assessment of their business, includingdetails of what they produce, who they supply, what production facilities they have (bothUK and overseas), and make sure their financial affairs are in order. They should alsoidentify and evaluate the retailer, visiting the stores and making sure that they producethe type of merchandise it sells.
“You will only have one opportunity toimpress”, he cautioned, so to make the most of this the manufacturer should plan hiscampaign, perhaps by identifying weaknesses in the retailer’s supply chain, and by makingsamples of items already being sold in the stores. Approaches should be made to a namedbuyer, and two people should attend the resulting interview. Above all, manufacturers mustlearn to sell themselves and their facilities.
Key Strengths
Stuart Stephens, deputy managing directorof Arc Sports, discussed the ways in which this sports and leisurewear manufacturer hasbuilt on its key strengths of supply chain management, coupled with fast reactionproduction in the UK backed up by commodity low priced goods from Egypt, to achieve steadyprofitable growth. “UK manufacturers must do more than just make garments”, headvised, “they must focus on customer service, lead times and price. By doing this,retailers and brands will be able to concentrate on their core strengths, and maybe sharethe burden”.
Arc Sports has organised its lead times toa critical path to ensure the quickest response possible. “If delivery time needs tobe cut even more we can offer a straight to store delivery service so cutting out thewarehouse altogether”, concluded Stuart.
Nick Hollingworth, managing director forsourcing and supply chain management at Arcadia noted: “The only customer for all ofus is the end consumer. Everyone in the chain is involved. Consumers now have a PhD invalue and know exactly what they want. If you deliver they will pay”.
He also added that Arcadia has addressedthe disadvantages of sourcing overseas, such as import costs, and this gives newopportunities for UK manufacturers.
Action Points
- Changes to the culture and attitudes of the industry. An environment needs to be created where openness to change is at the forefront of any business decision. The only manufacturers to succeed will be those who are customer focused and can react immediately to the ever changing needs of the consumer.
- UK manufacturers cannot compete on price but have a future in fast fashion if they capitalise on its ability to predict trends and turn around orders swiftly, unlike overseas suppliers.
- If UK based suppliers want to retain a share of the more basic market where lead times do not have to be so short, they should look to moving some production overseas to take advantage of inexpensive labour.
- Manufacturers and retailers need to work together to maximise effectiveness in the supply chain.
- Retailers need to look beyond the price of merchandise to areas of real profitability. It is the garments purchased months in advance from far afield that often end up on the sale rails.
- On the product development side, closer collaboration is needed between buying, designing and retailing to ensure that accurate and quick decisions are made. The focus must be on the UK’s strength in innovation and the need to continuously improve the product offer.
- There is a need for manufacturers to get closer to the final customer.
