COMING OF AGE WITH THE INTERNET

As a student of history I’ve often wondered if people that were alive during the transition between one cultural/economic age and the next realized they were witnessing a critical evolution in the human experience. Did Johannes Gutenberg realize that even though he would be given the credit for the first use of movable type (a technology that had been developed years before). His marketing choice to print the Bible encouraged church to sponsor widespread literacy that ultimately led to individual property ownership and the science and technology of the Age of Enlightenment. History can be very obscure if you happen to be living in the middle of it. Now as we stand at the twilight of the Industrial Age and the rising Information Age, can we use our historical experience to choose the smoothest transition.

Product development in the information age

 Starting with the fundamentals, what’s the difference between the industrial age and the transition we are now in to the information age. In its simplest form products developed for the industrial age were generally focused on capacity and manufacturing efficiency in a specific technology. In the information age product development has to focus on the integration of critical data and functional translation across technology lines. Sometimes that concept is a little difficult to visualize but in the information age everything from pictures, to airplanes, to cars, to fashion is visualized, stored and manufactured in digital form. So in the information age the synergy of products, manufacturing, marketing and purchasing occurs in real time in a digital stream.

Integration vs Specialization

Dealing with this transition means that ideas, concepts and physical products have to focus not so much by building barriers to entry for their competition but, to create market power and profits by integration with manufacturing and communications systems. This means that any product development needs to be aware and if possible to embrace all four pillars of the information age. Let’s examine those four pillars one by one; first, the one we are all familiar with, is the real-time instant communication over the Internet. This ability to communicate, influence, decide, transact and even harm individuals and organizations anywhere in the world in real time is a dimension of our life that most of us have not yet learned how to safely and effectively use. The second pillar of the information age AR is just coming into its own, whether you call it Augmented Reality or virtual reality it is the ability to communicate at personal sensory level that transmits imagination and future reality in real time. How we use this requested or intrusive sensory experience has yet to be determined. There is no question however that represents a fundamental tool for marketing ideas, influence and products in the information age. The third pillar of the information age is Artificial Intelligence (AI) or the ability for digital machines to remember, learn, infer and ultimately decide based on more information than most humans can process in real time. In other words, AI allows us to distill and use much more information than we can normally process in the human time continuum. Most of us who visit the Internet have experienced websites that help us decide we want to buy, who we want to talk to or even which “ facts” we want to believe. As we’ve all experienced in the last few years weighted AI can drive huge herds of individuals and the direction of specific products, ideas or actions. Finding a way to understand and control the weights that are applied to this elementary use of AI is one of the first conundrums of the information age. As AI becomes more sophisticated it will drive even the machines that we make that in turn, make the things we buy. This ability leads us to the fourth pillar of the information age, the sophistication of Digital Manufacturing. Digital manufacturing is not limited to the antiquated industrial age concepts of automation. Traditional factories were built primarily based on efficiency and capacity so the idea of automation was to do individual tasks more accurately and efficiently than humans.  Digital manufacturing is the integration of AR, AI and Internet communication to transform Virtual Inventories into individual physical products.  Products can be customized, individualized by order or focused by demand and are manufactured in real time from a virtual inventory of digital information.

The Unintended Effect

If we examine the impacts and imbalance of the development of each of the basic components of the information age it is easy to see why the development of integration technology is more important at this point than the development of individual technology. One of the clearest examples is the development of the Internet as an economic engine without the co-development of the matching digital manufacturing technology. Even though digital printing has developed a rapid rate the integration of digital coloration of apparel and textiles or the integrated development of 3-D printing of toys, auto parts and tools has lagged behind as a viable economic engine. The economic focus of the Internet has been in support of traditional manufacturing, outsourcing and the search for cost savings. In the future this omnipresent communication tool has much to offer including the increase in marketing reach, product focus and merchandising and manufacturing consumer customization. Today's reality is however, growth of the Internet without synchronization with the other pillars of the Information Age has in turn increased the waste, pollution and labor abuse caused by the stockpiling, clearance and dumping of traditional mass-produced inventories.

Using the new digital tools

Synchronizing individualized offerings through micro merchandising, while limiting on hand inventory through demand sourcing and matching production with sales through digital manufacturing will become the profit ensuring norm of the information age. Using AI to offer targeted product over the Internet, while offering the augmented AR experience of visual try on and tailoring measurement in store will begin to restore personal value instead of just tolerating almost the right product based on price value. For the basic products that the store must stock in order to preserve its market positioning merchandisers and buyers will use AI-based learning algorithms to predict the individual on hand inventory lifecycle of each SKU by store location. This demands sourcing will take advantage of the pollution free 3 to 5 day replenishment available through the close proximity digital manufacturing. Using these new tools to create a seamless path synchronizing selling and manufacturing will create smaller, but responsive on hand inventories through distributed micro-factories tied directly to profit making products.

INTEGRATED MICRO-FACTORIES, THE FORECAST GAP & DEMAND SOURCING

FINDING A HOME FOR YOUR MICRO-FACTORY

One of the questions that vexes anyone interested in building or using an apparel micro-factory is: “where exactly does it fit?”  Hundreds of millions of dollars have been spent perfecting the technologies that go into a micro-factory but very little money has been spent on the application of the micro-factory to the process of sourcing product. There are four current practical applications of the micro-factory. The first, is as a sampling site that allows brands to physically produce a product for fit, production modeling or real-time consumer testing. The second, application is a print for pay model that usually uses direct to garment printing on T-shirts or other casual wear. Third, there is one-off production for online customized apparel sales.

The fourth application the conversion of a virtual inventory to physical inventory is by far the most important application for returning domestic production of apparel to the US market. The use of micro-factory integrated technologies to replace risky print and licensed products reduces the losses from unsold inventory that plague the retail market and to some extent the online market. Having to make decisions for large inventory investments in print and licensed products in the age of the Internet, fashion influencers, instant trend promotion and tribal identification has caused huge unsold inventories and the resulting profits stealing clearances.

 The Forecast Gap

 Remarkable advances in the technology of design and visualization have allowed apparel designers, brands and product developers to reduce the time required to visualize and prepare a new apparel design or decoration. However, these advances even though they are portrayed as reducing time-to-market really only reduce time to production. Coloring/printing the fabric, the cutting, sewing and transportation/distribution of product still creates a huge time gap between the initial concept and the presentation of the product for consumer sale. Decisions about color and print that occur this far in advance represent the huge risk that a market shift will cause a volume stocking order to go mostly unsold at retail price. Unfortunately, that retail price is what planning and profits are often based on. This gap in time and money is what we call the “forecast gap”. Placing an integrated micro-factory directly in the supply chain as a replenishment source after a minimal initial stocking order can reduce risk and in fact guarantee both profits and appropriate product stocking. Using a micro-factory for direct point-of-sale replenishment allows each retailer or online site in the distribution system to match their product availability with local demand. This means that on hand inventory can be calibrated to avoid inventory clearances but still provide accurate product availability.

Merchandising Agility

 Placing the integrated micro-factory in position between the general production sources and the consumer creates a level of sourcing agility that allows merchandising to react to out of stock situations by size, gender or color and to avoid overstock clearances by location. For the highest efficient use of the integrated micro-factory in a replenishment role, the factory (which produces no pollution) should be placed in or near the appropriate distribution center. It is important to remember that the physical space taken up by the factory can be designed to match the space that was previously taken up by the physical inventory. As a rule of thumb, hundred thousand square foot of inventory storage equals about 1 TB of space in the virtual inventory. It is also important to remember that the cost of the micro-factory is probably less than the initial stocking cost and discount losses on product in a period of less than a year. So, if you’re going to employ and integrated micro-factory to fill the forecast gap the sourcing paradigm for some products may have to change from forecasting to demand sourcing.

Demand Sourcing

 The key ingredients of demand sourcing are: product profit index, risk assessment, real-time POS replenishment and negotiating a flexible style contract. Positive real-time control of on-hand inventory by linking it directly to the demand driven Micro-Factory is the fundamental feature of demand sourcing. In order to construct and demand sourcing infrastructure the selling entity whether it is retail or e-tail needs to complete three basic pre-activation tasks.

Establish real time profit risk analysis tools

ü  Profit velocity index (PVI): point score based on gross profit times turns per week

ü  Profit Lifecycle track:  Average selling price per unit sold vs total units contracted plotted by week.

Establish period sales production for high-risk silhouettes

ü  Build or source an Integrated Micro-Factory that can provide no minimum replenishment of targeted silhouettes with variable decoration on demand.

ü  Negotiate a “Style Contract” for the on demand delivery of the total period volume of the targeted silhouette based on SKU’s from the Virtual Inventory. Establish a Virtual Inventory (VI)

ü  Using high definition visual design software build a silhouette construction and decoration TekPak inventory for the choices available in store and online for the SKU’s. (Note: 10,000 different decoration VI SKU’s will consume less than a TB of digital storage vs over 100,000 sq. ft. of physical SKU inventory warehouse space.)

ü  Test the selected greige fabric fit pattern construction of the offered sizes and/or shapes of the physical production silhouette.

ü  Install the software, communication and transportation links to facilitate POS based product lifecycle replenishment. Profit Velocity Index (PVI)

Profit Velocity Index (PVI)

Two of the newest elements in creating a demand-sourcing paradigm are the Profit Velocity Index (PVI) and the flexible Style Contract. The PVI is a competitive point index between products, which determines both the replenishment level, and ultimately SKU stocking life. In merchandising whether online or in-store the velocity of product movement is the key ingredient in determining on-hand inventory, product lifecycle and ultimately product profitability. The PVI is calculated by simply multiplying the concurrent percentage of gross profit times the turns of on-hand inventory over the period of the week. Comparing the PVI to the scores of other like product or products in a particular size or lifestyle area will determine the risk and ultimately the level of replenishment required to realize the highest possible profit levels from that particular SKU. When the PVI for a particular product dips below a predetermined minimum score the product is replaced or discontinued.

Style Contract

 The flexible Style Contract works directly with a progression of products that are driven by the replenishment lifecycle described by the PVI. The flexible Style Contract depends on digital coloration or printing which allows the integrated micro-factory to change color and/or decoration without any additional cost. In its simplest form the flexible style contract is a total volume of a particular silhouette, regardless of color or print, the brand, the retailer or the e-tailer is contracting for over a specific period of time. Once the contract is in place the buyer can determine a progression of decorations based on a real time evaluation of current trends. Whenever a product is determined by the PVI to be ready for replacement, the micro-factory moves to the next decoration or colors in the progressive list and replaces the product in the store that requires the new product. This allows the buyer and the merchandisers to work together to offer the appropriate product with the maximum PVI store by store within the distribution area. In the case of online since the product may not be made in the micro factory until after it is been purchased all of the products in the priority list of decorations can be displayed for sale since they only reside in the virtual inventory.

Where can brands and retailers learn more?

All of these applications technologies and merchandising tools will be on display and detailed in the Fashion Technology section of SOURCING at MAGIC in the unified MAGIG show August 11-14 in Las Vegas.

Where Does the Micro-Factory Fit in the Sourcing World???

Micro-Factory at SOURCING at MAGIC built by TUKATECH, Mutoh and Graphics One and integrated by Kai Buskirk   Photo by WDG

Finding a Home for Apparel Micro-Factories

Have you been to an apparel show or textile technology show recently? Seems like every show is enthralled with the "Micro-Factory", the industry’s shiny new object. It is exciting to finally see significant technology changes in the way we design product, color fabric and cut the pieces of apparel and home products. All of these wonderful demonstrations still beg the question: Where does the Micro-Factory fit?

Hundreds of millions of dollars have been spent over the last 20 years to perfect digital printing, visual design, robotic cutting and new technologies for sewing. Yet with all these investments the question of where the Micro-Factory fits and its ultimate purpose is still shrouded in mystery. Is this new paradigm the forerunner of mass customization or is it just a little production site for samples. Now is the time to clear up that mystery and look at the purpose and goal of the Integrated Micro-Factory.

Purpose of the Integrated Micro-Factory

 The primary function of the Integrated Micro-Factory is to convert a digital Virtual Inventory in to a physical inventory on demand. That reality allows a direct connection between the production of product and the demand of the market. This function give sellers the ability to switch sourcing away from the risk of supply searching for demand to a real-time relationship between consumer demand and timely product production. In the simplest of terms the purpose of the integrated Micro-Factory is to create a selling environment that is, “never out of stock, or never overstocked” by removing on-hand inventory risk and cost.

Goal of the Integrated Micro-Factory

 The goal of the integrated Micro-Factory is one simple word profit. The big difference is where the profit comes from. In the traditional sourcing model the profit is determined to a great extent by the cost of goods. The problem with forecasting cost in today’s real time world of instant trends and saturating news is ordering inventory months in advance of sale. Ultimately this time gap leads to high risk of trend shifts and unanticipated over stocked "duds" or under stocked “hot SKU’s”. These common conditions can change the cost to profit ratio dramatically after the product is on hand. Since, most manufacturers offer lower per unit price based on volume, pursuing traditional volume discounts increases the probability of overstocking and the resulting clearance discounts and profit loss. Pressing for lower cost also drives lower labor costs and poor labor conditions that can result in lower quality, environmental disasters and bad press or worse.

The Integrated Micro-Factory deals with each of these profit losses. First, the virtual inventory can be converted to physical product and restocked based on actual sales, which eliminates profit stealing clearance discounts. Second, higher profits based on better sales velocity and sustained retail price can support better labor conditions. Third, the cost of product digitally colored and produced on-demand in an integrated Micro-Factory is always fixed regardless of decoration or color allowing for extraordinary decoration agility and digitally exact quality. In addition, most micro-factories operate with no emissions, no use of water or emission of toxic waste. Another amazing side benefit is that in some multicolored apparel designs digital printing can reduce sewing labor up to 35%.

 A demand-based virtual inventory converted by an Integrated Micro-Factory allows the retailer, e-tailer or brand to produce exactly the required amount to initially stock the shelf and then only replenish what is sold. This positive control of the real-time product life-cycle and the ability to replace a non-selling SKU without a loss from dumping the held inventory usually results in a dramatic multiplication of profit regardless of a slightly higher per unit cost.

Demand Sourcing

Positive real-time control of on-hand inventory by linking it directly to the demand driven Integrated Micro-Factory is the fundamental feature of demand sourcing. In order to construct and demand sourcing infrastructure the selling entity whether it is retail or e-tail needs to complete three basic pre-activation tasks.

Establish real time profit risk analysis tools  

• Product velocity index: point score based on gross profit times SKU turns per week
•  Profit Lifecycle track: Average selling price per unit sold vs total units contracted plotted by week.

Establish period sales forecast for high-risk silhouettes

• Build or source an Integrated Micro-Factory that can provide no minimum replenishment of targeted silhouettes with variable decoration on demand.
• Negotiate a “Style Contract” for the on demand delivery of the total period volume of the targeted silhouette based on SKU’s from the Virtual Inventory.

Establish a Virtual Inventory

• Using high definition visual design software build a silhouette construction and decoration TekPak inventory for the choices available in store and online for the SKU’s. (Note: 10,000 different SKU’s will consume less than a TB of digital storage vs over 100,000 sq. ft. of physical inventory warehouse space.)
• Test the selected greige fabric fit pattern construction of the offered sizes and/or shapes of the physical production silhouette.
• Install the software and communication links to facilitate POS based product lifecycle replenishment.

Micro-Merchandising

The next step is to establish the product in-store and /or online. Using the product information from the TekPaks and the high resolution images from the visual design software build the Augmented Reality (AR) tool needed to portray the product both in-store and online in 3D/360° visualization. It’s likely that your risk analysis tools will lead to the conclusion that printed designs represent the highest risk. These are the products that will eventually have to be put on deep clearance because of sold-out sizes or unpopular decoration. It is important to remember, that integrated Micro-Factory demand production does not fit for all apparel products, therefore; it is important to use the profit risk analysis tools to select just those silhouettes/SKU’s that fit in a demand sourcing profile.

 Micro-Merchandising is shorthand for integrating the advantages of the virtual inventory and demand production to focus on niches that can represent high velocity inventory sales focused on short trends or localized opportunities. Because production can match the velocity of sales trends without the risk of volume buying and long production lead times. Buyers and merchandisers can turn on a dime to take advantage of hot events or subjects that drive the market through today’s instant communication. An additional value of Micro-Merchandising is that retailers can focus on a more timely entry of fashion decorations that match local seasons and events. In this time of wild climate changes spring season and spring fashion do not arrive at every locale right on schedule.

Where Can I Learn About the Technology of Real-Time Demand Sourcing?

 In summary, finding the proper role and location for Micro-Manufacturing is ultimately as important as finding and adopting this new technology. Integrated micro manufacturing depends on building an understanding of virtual inventory and the tools that you use to build the appropriate and efficient demand to support the factory. Many of the vendors who provide the technology for micro-factories are beginning to understand that integrating their technology for demand production with the techniques and software that support demand sourcing is critical to the continued pursuit of domestic production and apparel profitability. In addition, some of the shows and conferences in 2019 are recognizing the importance of demand sourcing along with demand manufacturing. WTiN's Innovate Textile & Apparel Americas 2019 (ITA) on May 1 thru 3 will feature both Micro-Factory and the supporting itegration technology. This August, INFORMA’s SOURCING at MAGIC in Las Vegas will feature both micro-factories and training in the tools for Micro-Merchandising and Demand Sourcing. Attendees will have the opportunity to learn the details of risk assessment methods, style contact structures and AR product visualizations. Support is always available from AM4U, Inc. the leader in Integrated Micro-Factory and Real-time Demand Sourcing development. Contact bgrier@am4u.com check out the Principles of Demand Manufacturing and related videos at AM4U.com.

Rebuilding the Profit Structure of Apparel Sourcing

Reprint of an interview of Bill Grier written by Tansy Fall of WTIN for the new journal Textile 4.0 available at: http://textile40magazine.wtin.com/

Merchandisers can drive on-demand manufacturing

By Tansy Fall 26 February 2019

Moving from a traditional supply chain model to an on-demand workflow is not as easy as flicking a switch. But AM4U CEO Bill Grier believes there is a place in the supply chain for microfactories to make this transition easier. Tansy Fall reports.

Among the biggest challenges facing apparel manufacturers today is shortening time-to-market whilst simultaneously reducing inventory. This issue has risen to prominence thanks to both ecommerce and the changing demands of consumers, which has left the traditional textile and apparel supply chain in a quandary over how to keep up with demand.

On-demand manufacturing has the potential to solve both inventory and time-to-market issues. However, the lack of data sharing in the industry is seen to be stifling brands’ and retailers’ ability to connect orders with production. If businesses could better connect to the rest of the supply chain, brands and retailers would undoubtedly see dramatic improvements in sell-through (the percentage of a product that is sold by a retailer after being shipped by its supplier) and ultimately in-store and online profits.

This is where US-based AM4U (Apparel Made For You) comes in. The company is aiming to position itself as a leading consultant and supplier of microfactories and CEO Bill Grier is confident that there is a way to change the make-up of the supply chain, though admits it will be a gradual process. Grier has long worked in the digital printing space but has also been employed as a technical adviser to American apparel businesses. In 2012, Grier launched AM4U with the goal of demonstrating the capabilities of a demand-based integrated microfactory, for deployment in the apparel sector.

The company has since struggled to on-board the concept with brands and retailers and Grier says this is largely due to the mindset of the industry and its historic structure. “We are still mired in the industrial revolution,” he explains. “The mentality of investment, the mentality of purchase, and the mentality of stocking and inventory. We build factories for capacity […] and capacity is the antithesis of demand. […] The brands were not ready. Everyone visited us but nobody bought because they had no deployment plan.

“We do have three manufacturers right now where we have installed equipment and they have demand-based opportunities. [However] we have to balance the money involved between the manufacturer, the brand and the retailer. Because of the focus on cost, the manufacturer has been left in a position where they can’t make the kind of money they need. […] Once you focus on cost then you focus on labour, and you end up moving production.”

Most recently, the difficulties associated with working in an industry very much set in its ways has led AM4U to partner with event organisers UBM Fashion, to build three integrated microfactories on the show floor of Sourcing at Magic, which took place in February 2019. The company is endeavouring to showcase the customisation possibilities of a digital microfactory and encourage those in sourcing departments to think outside the box.

Away from the exhibition floor, Grier says he has also spent millions of dollars trying to develop a new way of making apparel, with each on-demand factory requiring an average investment of US$650,000 for set-up. From this, he has learnt that there are two key elements for success, which are now driving his business forward: integration across the supply chain and deployment planning.

Driving change

Considering supply chain integration and deployment together, Grier is of the opinion that digital manufacturing processes and microfactories will find their sweet spot if they are remote from traditional sourcing practices. He explains: “Buyers aren’t going to change. Their job description instructs them to find the lowest cost. [However] whilst buyers are responsible for cost, merchandisers are responsible for profit.”

The role of the merchandiser at a brand or retailer is to predict up-and-coming sales trends, and therefore to ensure maximum profitability. Merchandisers make certain that products appear in the right store, or online, at the appropriate time and in the correct quantities. Moreover, the merchandiser directly liaises with the distribution centre and often has access to data from the POS and the supply chain. This enables them to identify production and supply difficulties and deal with any problems or delays as they arise. As a result of this, the merchandiser is also well placed to make decisions about product quantities, however they are often bound by pre-ordered stock and are therefore also responsible for monitoring slow sellers and therefore price reductions.

“There are items where you need to have inventory, so buyers have a role there,” Grier continues. “But merchandisers deal with the distribution centres, not the manufacturers. And, you can drop a pollution-free microfactory into the distribution centre.”

Adding a microfactory to the supply chain at the distribution stage in the process is a relatively new concept for the industry. It is something that ecommerce marketplaces, such as Amazon, are implementing, however, as Grier notes: “Amazon is trying to put things in at their distribution point but it’s direct-to-garment. […] The problem is that Amazon is doing what we used to call just-in-time. This killed American manufacturing because it just moved inventory to the next level down.”

Moving inventory along the supply chain is not a solution. However, adding microfactories to distribution centres, well placed to leverage POS data, could be the appropriate first step towards digitalisation of the industry.

Mitigating risk

This is particularly applicable for high-risk products such as prints. White or black garments still lend themselves to being manufactured in bulk, responsibility for which remains with the buyer. But for those products that are more experimental, be that in colour or design, on-demand production can allow for garments to be bought before they are made; limiting the risk the brand or retailer takes in producing them. If they are successful, manufacturing capacity can then be increased.

AM4U currently has microfactories that are being tested by a handful of brands in the US. The results of this will be first realised in August and this testing will then go on for another year. “It has a direct connection with 2375 stores,” Grier adds. “They are at risk, and they have a huge pain at the moment, so they have to change. They’re therefore willing to try this. Retailers need to develop new technology to evaluate how they calculate product risk.”

This test is an extension of another AM4U project. Grier continues: “We ran 100 of a major retailer’s stores on a test basis. The question was, how many [products] do we have to make to cover their entire licenced design children’s pyjamas? How many did we have to make a day? […] The most we ever had to make in one day was 174.”

This assessment highlights the validity of the microfactory concept, provided retailers and brands can be moved towards an on-demand sourcing structure. “We began to realise that the biggest issue was that nobody was ready to give us [the manufacturer] POS data. […] The manufacturers can’t change until the point where the money enters the system changes.” Therefore, the microfactory needs to be close to the end consumer, where the money enters the value chain.

One AM4U customer based in Los Angeles, US, has embraced this microfactory concept and has successfully set up partnerships with brands. The business is a leggings manufacturer, and the owner is able to pay its workers US$20/hr, Grier says, selling a pair of leggings for US$32. Grier explains that the business has ‘silhouette discipline’ meaning that the design of the leggings can be varied and easily changed whilst the tried and tested shape of the leggings remains the same.

Moreover, Grier highlights the kind of contract the microfactory has with the brands. He says that whilst the brand the microfactory works with commits to buying X number of leggings a year, they do not specify the design at the point of order. The design can therefore be changed at any time, using digital technologies, and the microfactory is given access to the brand’s POS data in order to guide its manufacturing decisions. Grier says that the mircrofactory’s “sell-through rate is 80%, compared to the average sell-through rate for women’s apparel, which is only about 23% at retail.” 

Regarding the importance of the supply chain having access to POS data, Grier draws on experience from his family’s involvement in food company General Foods, which was bought by Kraft in 1990. Grier references the impact the barcode had on the grocery industry, providing the ability to track buying patterns and apply this directly to stock quantities and production needs. He says that this same approach could be applied in the apparel industry if the retailers would release the POS data upstream and that the ‘sell-by dates’ formula that informs inventory in the food sector, should be applied to sourcing and inventory control in the clothing sector. Due to trends in the fashion industry, garments also have a sell-by date and, whilst brands and retailers are aware of this, which often results in them discounting items, they are not currently managing their inventory and supply chains in order to ensure the right number of garments are produced that can be sold by the ‘sell-by date’. Grier adds: “Sales should be based on promotion and not on clearance.”

The future of the factory

In the creation of microfactories, two areas of the supply chain that have been very separate for the majority of the industry’s history are united: “Colouration has been separated from cutting and sewing for so long that they don’t have an understanding of it,” Grier comments.

This poses a big challenge to manufacturers or brands that implement microfactories as processes are being connected that haven’t had to interact with one another before. And, connection between the textile manufacturing element of the supply chain and the apparel manufacturing element is not the only communication problem. The design process needs to better involve information from the manufacturing process as well. Grier says: “Up until the middle of last year, not one design software available could see directly into a RIP [raster image processor, which interprets and renders a design into a pattern of dots for digital printing].”

Technology also clearly needs to advance to achieve the seamless production processes that the implementation of microfactories require to be successful. With the concept of microfactories at the distribution centre, responsibility for investment could finally be brought to the table of those that hold the most capital for investment, the brands.

Integrated Merchandising and Manufacturing is the First Step to Sustained Profits

Merchandising and Manufacturing become one at SOURCING AT MAGIC this August

The Zund Cutter is one of the technologies featured in the Merchandising Integrated Micro-Factory in SOURCING AT MAGIC

August 12th thru the 15th, the Made in USA section of SOURCING AT MAGIC in the North Hall of the Las Vegas Convention Center will introduce a working model of the world’s first Merchandising Integrated Micro-Factory on the convention floor. This factory developed by AM4U, Inc. enables Demand Manufacturing for instant in-season replenishment of hot fashion sellers or replacement of slow movers. Real-time merchandising adjustments that long lead times from foreign suppliers make impossible. "No out of stock and no overstock" is a merchandiser’s dream! Featuring equipment from the top digital manufacturing vendors integrated by AM4U, Inc. the factory will produce apparel on demand displayed and ordered from an Endless Aisle merchandising kiosk.  SOURCING AT MAGIC attendees can select apparel or accessories from a Virtual Inventory displayed in high definition.  The digital SKU’s appearing on the screen in 3D will then be transformed from white fabric into colored actual finished apparel using the on site Integrated Micro-Factory.  

The Integrated Micro-Factory is one of the new technologies developed by AM4U to revitalize the apparel sector of the US economy by providing product choice, increased profitability and thousands of sustainable jobs. Risk free product choice from "change-on-the-fly" digital manufacturing technology, increased profitability by reducing the almost 60% overproduction driven by overseas lead times and sustainable jobs as demonstrated by the reproducible non-polluting Integrated Micro-Factories on the convention center floor.  

Witness History

For the first time anywhere, SOURCING AT MAGIC will link actual working Integrated Micro Factories to a Retail “Endless Aisle” virtual inventory merchandising portal. The Endless Aisle merchandising pop-up allows brands and retailers the ability to offer a massive a Virtual Inventory with the additional on-site benefits of fabric feel and trial fitting. Connecting merchandising to manufacturing in a real-time model is the key factor in creating profitability of the new era of Demand Sourcing.  The ability to tie retail product merchandising movement directly to replenishment product manufacturing can increase retail sell-through to levels that assure profitability at normal mark-ups.  SOURCING AT MAGIC understands that for many product groups and retailers the technology and application of Virtual Inventories and digital manufacturing is ready for commercial application.  In addition this environmentally clean technology with its ability to change colors and prints on the fly without minimums or long lead times is the ultimate in lean manufacturing.  One of the impediments to implementation is that many brands and retailers have not seen an Integrated Micro-Factory in operation and those that have seen a working factory are still unclear about the integrated merchandising strategies available.

Linking the retail “Endless Aisle” kiosk with a Virtual Inventory filled with SKU’s from on site state of the art visual design systems creates and risk free unlimited inventory.  These SKU’s exist only in digital form until selected from the Endless Aisle visual catalog and transformed into physical high quality apparel in the Integrated Micro-Factory.  The integration of manufacturing with replenishment based on actual sales allows the retailer to operate with a minimum of actual product in a localized distribution pipeline while drawing from an endless aisle of virtual product stored a no risk in digital form.

SOURCING AT MAGIC Plans to Provide a Path for Made in USA Apparel Recovery

SOURCING AT MAGIC a part of UBM’s biannual MAGIC Apparel Show the largest apparel show in the western hemisphere is unveiling a plan to return apparel manufacturing to the U.S.  The plan is based on sustainable digital manufacturing technology integrated with Demand Sourcing based on real-time point of sale replenishment.  The proven manufacturing technology will be driven by actual product sales with change-on-the-fly adjustment and or replacement for fast selling or non-selling items. SOURCING AT MAGIC will begin in August to feature more and more U.S. companies using digital manufacturing and Integrated Micro-Factories to provide this next generation of merchandising to brands and retailers.

The Plan will have the overall goal of raising full retail price sell through above an average of 60% of on hand inventory.  Since current sell through at retail price is less than 25% this increase will allow the lowering of average consumer price while almost doubling the gross sales profit for manufacturers, brands and retailers.  In addition since the inventory is stored digitally until sold the upfront costs of factoring or financing and the cost and risk of warehousing are eliminated.  SOURCING AT MAGIC understands that the only incentives for change that work in a market driven economy are profit and risk reduction, which are the principal goals of this project.  SOURCING AT MAGIC believes that pursuing this growth plan will provide needed financial incentive to the popular “Buy American” and “Made in the USA” programs we hear about every day.

More information about the key Principals of Demand Manufacturing can be found at AM4U.com