Confirming comments made by the Benetton CEO Massimo Renon to Reuters, the group says the move is a “strategic decision to have more control over the production process and also transport costs”.
Renon said in the interview a shipping container that used to cost $1200-$1500 can cost $10,000 to $15,000 with no certainty of a delivery date.
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Benetton has had production in low wage countries since the early 2000s.
Renon told the publication even if production costs remained 20% lower in Vietnam and Bangladesh versus Mediterranean countries, that benefit was offset by longer lead times sparked by supply snags; going from an average lead time of 4-5 months to 7-8 months due to the lack of ships.
He contrasted this with production in Egypt which meant delivery time could be shortened to between two and two and a half months. In the case of wool garments produced in Serbia and Croatia, it can take just 4-5 weeks.
In those two countries, as well as in Tunisia, Benetton plans to ramp up production at its own sites, while in Egypt and Turkey it is working with suppliers.
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By GlobalDataLast week Benetton Group said it was implementing a new automation solution at its logistics facilities in Italy to make its picking operations more efficient, flexible and agile.
