Wednesday, November 8, 2017

Saving U.S. Apparel Jobs: Automation or Integration???

Today's Solution is Integrated Virtual Inventory

Almost every day we see articles, releases and product features about the automated future of the apparel and textile manufacturing.  Magazines and PR articles regale the industry with breakthroughs and future technology announcing the “digital revolution”.  Meanwhile, retailers and brands disappear at record rates, labor abuses migrate from country to country and the deadly pollution of streams and rivers continues.  As an industry innovator and holder of a number of technology patents I can say without any equivocation, “There is no single magic bullet technology solution”. There is however a strategic business solution.
Millions of dollars are spent every year on everything from digital design platforms to robotic sewing but nothing really changes.  Sure automation, 3D printing, sew bots and AI may be in the future, but what can we do today to rebuild jobs and manufacturing. We are inundated by propaganda about the growth of American manufacturing and other patriotic come-ons while reality is that off shore apparel purchases increase every year.  Retailer, brands and manufacturers so terrified of change that they cling to the belief that third world mass manufacturing labor costs will create profits at home.  August 2017 imports of $42.6 billion were up 1.7% year on year according to OTEXA at the U.S. Dept. of Commerce.  Meanwhile, the country lost over 5,000 retail outlets and tens of thousands of jobs, while billions of dollars in new imports flooded the system.  Even though retail unit sales are increasing monthly (according to AcceleratedAnalytics, September Update) the clearance sale discounts required to move this growing surplus are destroying the profits needed to operate stores.  The consumers will soon fill their closets with these bargains and the inventory backup will reach an intolerable level of constipation that will cripple brands and manufacturers that will loose more retail selling outlets every day.  Online sales will relieve the glut ache for a while, but it can’t solve the overall problem of dependence on the out dated “industrial revolution” philosophy of leveraged volume efficiency.  Waiting for politicians or automation to solve today’s pain is a fool’s errand.  The question is what can we do TODAY!

Why Can’t the Apparel Industry Catch-Up to Reality?

It can, and here’s how!  Take the technology we have today and concentrate our efforts and money on integration.  Over the past 18 years our team has built and rebuilt demand factories in attempt to create the efficient ability to convert inventory data directly into physical apparel.  We found that building bridges of integration between the technology “silos” was the most efficient and immediate path to returning sustainable profit to the apparel industry.  The integrated focus of all the available technology clearly was to connect the risky physical inventory directly to sales at both the retail and online level.  This pursuit of the “Virtual Inventory” that literally guarantees profit on every sale represents the key to individual customization and thousands of localized apparel manufacturing jobs. 
The goal is now attainable and here are the technology integration steps required to start bringing back jobs and profits product by product:

1. Technology Integration: Adopt Modern Coloration Technology

The single most important technology requirement is shifting the sampling and production coloration of fabric from traditional mass production spot color to modern digital process color.  Mass production requires the man hours and cost of color separations, custom color mix, dip approval, screen making, registration, and production printing and drying, which, cannot match the change-on-the-fly instant capability to change the print and colors on a digital printing unit. 
The textile industry and its research organizations are focused on tuning old technology. The time and money they have wasted on mass spot coloration has blocked much of the integration required for change-on-the-fly coloration.  If they had spent one percent of those resources on process color we would be changing colors and prints on the fly just like the color printer on your desk.  Digital process color printers, like the printing units that businesses’ use every day, operate with four or six fixed colors and create visual colors by adjusting the density of the dots of each color.  The variations in density allow your eyes to process different colors from the reflections of light from the different concentrations of dots.  This is how everything from magazines to labels are printed today it is even how your television and smart phone send you images. The problem is, this is not how 99% of apparel is colored today, that process hasn’t changed in hundreds of years.  Digital process color can remove the pre press costs and press preparation labor as well as the post-printing cleanup that drives minimum inventory purchase requirements.
Example:  The critical criteria for matching colors and
 multi location output using digital Active Tunnel Infusion 
permanent dye and print coloration.
The transition isn’t easy it requires a detail understanding of the basic colors and their distribution and dot density as well as how the colorant reacts to each fiber type and construction.  Unfortunately the “help” landscape is not populated with many experienced practitioners.  The color experts are generally ink makers or printer makers and neither have experience with the multitude of fabric and fiber combinations or the multitude of care and wash tests required.  The fabric and industry experts have little experience with RIP’s and dot placement so they often have little hope of color matching.  This lack of integrated end-to-end knowledge can be a real bump in the road. But then, learning how to use process color is not any more difficult than learning how to use e-mail or a smart phone.  Skills most of us have conquered over the last few years.


2. Financial Integration: Understanding Physical Inventory Risk and Virtual Inventory Opportunity

A Virtual Inventory (VI) is a digital warehouse of SKU’s that exists in binary form and is ready to convert to physical product on demand.  In VI form a hundred thousand square foot physical warehouse of products in all sizes and prints fits in one TB of storage on a standard computer.  A fully complete VI contains all images needed for retail merchandising and online presentation of the product in 3D/360° and all 2D nests and TekPak data needed to print/dye, sew, label and finish the product on demand.  The savings in inventory management, reduced shrinkage loss, and storage space costs are obvious but minor compared to the savings from avoiding over production.  Over production and the resulting surplus inventory is the largest single contributor to the profit erosion plaguing retailers, brands and producers today. According to “” retailers are selling less than 25% of products at retail price in the first 8 weeks on display and less than 30% after 13 weeks.  As a result of clearance discounts unit sales are up but gross profits are down.  Closing locations may improve corporate G&A but it does nothing for individual store operating costs, in fact it increases the inventory pressure by reducing selling outlets. 
The inventory glut of off-shore mass manufacturing is eroding
 profits used to operate stores and pay employees.
This systemic glut of inventory and the accompanying financial risk spreads up the supply chain to the brands and manufacturers, who order or produce volume to leverage cost, then have to absorb charge-backs and shipping order cancellations. At this level no amount of “Brand Outlet Stores” will provide anything but temporary relief for this unsustainable economic system of “Over Produce-Discount-Dump” apparel marketing.

3. Communication Integration: Adopt Real-time Sales and Ordering Data, Analysis and Communication

Since there is no demand manufacturing without demand, it is critical for manufacturing to have direct access to consolidated POS data.  This data needs to include distribution path protocols and transit times as well as status of retail on hand sales inventory.  One of the biggest problems with demand manufacturing becoming a reliable source for retail replenishment is POS systems that do not consolidate and order in real time.  The speed and accuracy of inventory movement data is a basic component of building an effective and efficient virtual inventory.  Knowing the characteristics and trends of a products movement is critical to establishing a safe and appropriate on hand inventory and a consolidated Days-of-Supply (DOS) for production scheduling.  Product movement mapping is critical for manufacturing and distribution scheduling, as well as establishing on-hand DOS inventory safety levels at every product movement stop between raw materials sourcing and final customer fulfillment.
Technologies like RFID and enhanced PAM and ERP software are available but must be expanded to process and order product on a much more timely basis to support demand manufacturing and weekly store replenishments store by store and SKU by SKU.

4. Process Integration: Embrace Fully Integrated Solutions Connecting; Merchandising to Inventory to Production to Fulfillment

The apparel and textile industry was historically built as an interrelated system of independent companies or cottages and for the most part that system remains.  The industrial revolution only increased the size and production volume of the cottages, but not the structure of the independent stations along the supply track.  The connections between the farm, factory, brand and store stations were working until the train was required to travel at a much faster speed than the tracks could sustain.
Now that the technology is available to sustain the demanded processing speed at each station we need to fix the tracks and bridges to sustain the new digital system.
One bridge must be built between digital design platforms and consumer product 3D/360° display devices that provide customization and fitting both on the Internet and in-store.  The same software must produce a corresponding 2D pattern and TekPak suitable for storage, search and printing.  Another bridge that needs to be built is between consolidated POS data and the Virtual Inventory to provide scheduling and logistics input for all the stations down the line to the store or online transaction.  Until all the stations are connected and the supply and sale are linked a light speed the system will be as efficient as its slowest link.  The biggest opportunity however is that brands and retailers can set up a test mini-factory to focus on a small decoration sensitive product group like leggings or children’s pajamas and profit from demand manufacturing immediately.


There are specific differences between a demand manufacturing plant and a traditional assembly line mass manufacturing plant. The primary profit approaches are very different. A demand plant is built to deliver product from a virtual inventory and to assure a profit by replacing product that has been sold at retail price, preventing clearance dumping. In mass manufacturing the buyer produces profit by leveraging the cost through volume and manufacturing efficiency.  The basic personnel organization of the demand plant is in integrated independent modules that move variable product traffic through a series of control and quality check points. The mass manufacturing plant, on the other hand, produces a continuous line of fixed identical production ending in the final inspection of the product.  In demand manufacturing the emphasis is on individually addressable customer value instead of cost leverage of volume efficiency of mass manufacturing.