The Comeback of U.S Apparel Manufacturing
U.S Apparel Manufacturing Is Coming Back
Brace yourself for the incredible shift in America's fashion industry that will be witnessed within the next five years and beyond. Just the mention of U.S based apparel manufacturing sounds like an echo from a very distant past, painting mental pictures of an America with only shades of black and gray on the color palette. Indeed, manufacturing clothes has become a true lost art decades ago to offshore manufacturing. The apparel industry is among the first to be lost to the offshore movement with other countless industries that followed right behind.
The future is shining a bright light on this lost art however, as there is an increasingly visible movement to excavate and restore it upon the discovery of it's grand economic value. Industry Week points out that in addition to the domestic industry making a recovery, rectifying the deficit of apparel trade would "reduce the overall trade deficit by $120 billion per year" and that we could see the creation of "1 million U.S. manufacturing jobs." This is only one of many examples of the benefits of bringing these jobs back and the boost it would bring to the economy as a whole but what does domestic clothing manufacturing do specifically for businesses that are in this industry? Against the rising wages and tariffs associated with offshoring, the benefits of speed and close monitoring provided by domestic manufacturing grants an upper hand for competing in the ever so quick-to-change consumer world that demands an instantaneous response.
The Fashion Industry Requires a Fast Response to Changing Trends
Due to the very low barriers of entry in marketing to mass audiences all over the world made possible by social media, big name clothing brands have been losing business to the endless supply of latest trends offered by start up brands. These traditional businesses that have been outsourcing manufacturing for years are starting to see that their success is becoming more dependent on the speed at which they can keep up with trends for very on-demand consumers. Outsourcing has been known to take an extensive amount of time. Typically it's a 6 month process of making the clothes and shipping it half way across the world. Half a year is quite a long lag time considering how quickly trends come and go. By the time the clothes are ready, they are like fruits on the table that are halfway through their ripeness. In a study by Karl-Hendrik Magnus (with McKinsey and Company) titled "Is Apparel Manufacturing Coming Home?" it is acknowledged that a 6 month cycle used to be considered fast but now the market demands 6 weeks at the longest. Along with speed, domestic manufacturing enables close monitoring which allows for the flexibility to respond to any fickle changes in trends. With offshoring, it isn't uncommon to have tens of thousands of units as a requirement for production as opposed to the acceptance of smaller batches which results in clothes that lack a certain degree of customizability. Those big traditional clothing brands benefit in supply by being able to mass produce such huge quantities but they sacrifice mass customization and that is what the market demands, which again, requires speed to catch up with.
Higher Costs and Tariffs with Offshore Apparel Manufacturing
Unless you've been hiding underground or living off the grid, you know that outsourcing manufacturing to countries abroad like China are getting more expensive. Coupled with tariffs, onshore manufacturing is starting to make more sense. Forbes even claims that "tariffs will hasten U.S manufacturing" in an article by Andria Chang. Even if costs do happen to be slightly lower abroad in some cases, the Mckinsey and Company study makes it very clear that the industry heavily relies on a "demand-focused model" and that "speed beats the marginal cost advantage." With onshore manufacturing there are the everlasting benefits of better total cost and stable margins.
Sustainability and Ethics Movement
Most Americans today have expressed that they would rather buy American made products. Somehow having a product branded with a 'Made in USA' tag is a stamped seal of approval for reliability and premier quality. Also, seeing an American flag on a tag helps justify the consumer's consumptive behaviors with the reminder that they are supporting a fellow citizen's job and contributing to the economy. This is amplified by the media's increased portrayal on the subject of recreating American manufacturing jobs in order to secure more families and help fix up the economy.
Interestingly there is also a growing segment of people that associate the 'Made in USA' tag as a humanitarian effort, combating unethical work conditions in third world countries. It's very common today for an American university student to sit through at least one class or program that devotes a lecture or two spreading awareness about the horrendous conditions of sweat shops in third world countries, riffled with grueling long hours often consisting of low pay, child labor, and unsanitary environments. The efforts to bring awareness to these issues in recent years have been very effective in associating a negative image with tags bearing the name of a third world country.
Tag teaming with ethics is the sustainability movement. Within the education system and beyond, there is increased consciousness of environmental concerns regarding many practices that are normalized in everyday life. As a result, finding new Eco-friendly solutions to the regular ways of doing things have become a trend. The practices of offshore clothing manufacturers are specifically red flags for water sustainability, water pollution, and greenhouse gas emissions.
American Manufacturing and the Future
These are interesting times indeed for all sectors of American manufacturing, especially in the garment industry. Manufacturing jobs in the past few decades had been looked down upon by much of America as a low wage college degree-less venture but it really shouldn't be. It is an art form that in many ways, the country was built on and the consequences of it's abandonment have followed up with us today. The great news is that there is a re-birthing and in the next few years, manufacturing will be substantially restored, offering lucrative careers for millions and a step in the right direction toward improving the economy and environment.