The Textile and Apparel Business

One of the most globalized industries in the world 10% of world business USA consumes more product per capita than any where else More than 200 countries export products to the USA
Domestic production on the decline for 10 years

Product types
Home Textiles
Growth

Industrial
Road bed stabilizers Tyvek Tents Heart valves

Apparel
To protect or enhance the appearance of the human body

Merchandising
Many product types
Grocery, video, gas, clothing, etc

Merchandising Defined
Area of an apparel company that develops strategies to have the right merchandise, at the right price, at the right location to meet the wants and needs of the target customer
Burns and Bryant1997, pg.. 429

The process
Fiber Fabric Design Manufacturer Wholesale/buyer retail

Compared to Retailing
The process of planning , developing, and presenting product lines for identified target markets with regard to pricing, assorting, styling, and timing.
Kunz, 1998

Retailing
Selling goods and services to the ultimate consumer One component of the trade matrix
Material manufacturer and supplier Finished goods manufacturer Retailer Consumer

The activities involved in buying and selling: finding customers, providing them with what they want, when they want it, at prices they can afford, and are willing to pay.
Jarnow, Guerreiro, and Judelle, 1987, pg. 506

Merchandising is a business function that may operate at any level

Compared to Marketing
Marketing is the act of bringing together buyers and sellers R. Kean: merchandising as a subset of marketing G. Kunz: Interactive yet equivalent functions
The process of planning , developing, and presenting product lines for identified target markets with regard to pricing, assorting, styling, and timing.
Kunz, 1998

Three major functions

Line planning
Forecasting Budgeting Assortment/mixing Delivery and allocation Merchandising plans

Line development
Buying at wholesale Internal product development Combination
Product development
Design Line adoption Technical design/Samples

Line presentation
Internal
For adoption

Wholesale Consumers
Multi-channel

Constituencies
Executive Constituency
Management
Sets goals Mission and business plan Target markets, Price lines, Product selection,Quality

Merchandising Constituency
Interprets consumer preferences Profit center of company Plans, develops and edits product lines Sourcing and production capacities Oversees development of product
Design, fabrication, styles, assortments, pricing, visual presentation , timing

Job titles
CEO, COO, CFO, VPs, directors,manager, etc

Success measured by obtainment of objectives and ROI to stakeholders

Job titles:
Buyer Designer Merchandise manager Product development manager

Marketing Constituency
Defining target market Branding and imaging Promotion Sales opportunities Strategies for growth Research

Success measured by GM, inventory levels, turnover, ROI, markdown percentage, costs, sales per square foot, sell through

Job titles
Advertising manager Manufacturer representative Market researcher PR Sales manager

Operations Constituency
Manages people and physical property
Human resources Inventory Facilities Equipment Quality control

Success measured by market share, advertising/sales ratios, rate of sales increase

Jobs
Information manager Inventory controller Receiving manager Distribution manager Personnel manager Recruiter/headhunter Technical design functions here also

Success measured by employee retention, stock/sales ratios, materials utilization, labor productivity, breakeven

Finance Constituency
Evaluating profitability Setting future goals All the money stuff Jobs:
Financial analyst Accountant Investment manager

Quick Responce Constituency

Time to market Minimize time form concept to consumer Cuts across all other constituencies Focus on IT and telecommunication

Success measured in terms of investment and profit

Chapter One
From Spinning Machine to Quick Response

1789-1890 Mechanization of Spinning, Weaving, and Sewing

Several inventions
Spinning jenny - Samuel Slater Power loom - Francis Cabot Lowell Cotton gin - Eli Whitney Sewing machine - Walter Hunt, Elias Howe, and Isaac Singer

Ramifications
Decrease in production time Increase in demand for ready made clothing
Increase in demand was an economic issue Need of sailor, miners and slaves Increase in middle class consumer who wanted affordable, not custom clothing.

Distribution changes
Catalogs Department Stores

The birth of Ready to Wear (RTW) Standardized sizes

Men's wear - Civil war uniforms

1890-1950 Growth of the RTW Industry

Women's and children's clothing Mass production
Sweat shops

Formation of International Ladies Garment Workers Union (ILGWU)

No part of the Union of Needletrades, Industrial, and Textile Employees, UNITE)

Women's wear centralized in New York Men's wear decentralized - Chicago, Baltimore, New York.

Invention of the zipper Increase in marketing efforts (fashion magazines) increased demand - Vogue, DNR, WWD WWI - Uniform production helped to streamline production methods.

Further equipment development

Sergers and power cutting

Beginning of globalization - Paris Synthetics - Rayon Depression of the 1930s dealt a hard blow
Recovery occurred after WWII

Nylon - DuPont

Subcontracting. Sportswear Industry immerged. Increase in information - More fashion magazines - Narrow target. Brand recognition - Arrow. Decentralization of industry occurred in the 1940s.

1950-1980 Diversification and Incorporation

Continued growth in consumer demand. Lifestyle changes drove industry.
Increase in casual, decrease in suit sales.

Incorporation
Increase in large publicly owned apparel companies. Growth in suburbia spurred the development of the shopping mall. Designer licensing. Rising labor costs
Discounters (Kmart, Target) Increase in imports - 581% (1961-1976)

Teen fashion flourished. Use of synthetics increased - Americas love affair with polyester (1970s). Couture copies in RTW.

1980-present The Era of Quick Response

Increases in costs such as labor, energy and materials. Increase in imports. American manufacturers and retailers needed to reevaluate processes.
Verticalization Store brand strategy E-commerce Multi-channel retailing

Studies revealed that products were spending too much time in inventory resulting in huge inefficiencies.
66 week cycle (1 years)
Raw fiber to garment 84% of this time in inventory

The birth of Quick response.

Developed by Kurt Salmon and Assoc. Showed increased turnover and ROI

Quick Response
A reduction in the amount of time between fiber production and sale to the ultimate consumer.
Increase speed of design Improve on communication Reduce warehouse and in-transit time Decrease reorder time Any activity that improves accuracy and reduces time

Industry Cooperation/Partnerships
Cooperation is critical to QR success Textile/Clothing Technology Corporation
TC

Shift from push system to pull-system

Premier source of assistance to the sewn products industry for improving business systems and manufacturing resources Really trying to find ways to improve efficiency, reduce labor costs, thus improve international competitiveness

Inter-Industry Linkages
Development of the National Apparel Technology Center Mission:
Demonstrate the latest technology. Educate apparel industry on ramifications of technology use. Short-term development of technologies. To encourage standards and increase accuracy Voluntary Inter-Industry Communications Standards Committee (VICS)
Bar-coding
UPC (universal product code) SKU (stock keeping unit) SCM (shipping container marking)

Track product and info about product flow EDI Standards Recently reorganized under new name Voluntary Interindustry Commerce Standards Association

Supply Chain Management

Track Textile Apparel Linkage Council (TALC) & Sundries and Apparel Findings Linkage Council (SAFLINC)
Established EDI standards between manufactures and suppliers Reformed into QR Committee of the American Apparel Manufacturers Association
Now part of American Apparel and Footwear Assoc.

A concept brought on by advancements in technology. 3 main types of companies

Companies that perform their own manufacturing Companies that specialize in a certain area of manufacturing Companies that design, market and distribute but contract manufacturing

Crafted with Pride in USA Council

Boost American economy

Sharing and coordinating information across all segments of the soft goods industry.

Goals of SCM
The collection of the activities necessary to bring a product to market
Raw materials procurement Production Transportation Distribution Managing the selling process
(Abend, 1998)

Reduce inventory Shorten production time Provide better service Sharing of information as well as product
Forecasting POS Inventory Changes

Thank you for your attention!!