Lessons from the textile industry
By Gary Evans -- Furniture Today, December 24, 2001
KEY BISCAYNE, Fla. — To cope with the shift of production offshore, the textile industry had to devise new strategies, including innovative manufacturing methods, blended sourcing and supply-chain collaboration.
That was the word from Pete Butenhoff, president of Textile/ Clothing Technology Corp., a non-profit consulting and educational organization based in Cary, N.C. He spoke at the Furniture/ Today Leadership Conference, which focused on the topic, "Survival of the Fittest."
Butenhoff said the move of furniture production offshore is similar to that in the textile industry, and that some of the same lessons may apply.
Textile production began to shift offshore in the mid-1980s, but took a big jump in the mid-'90s, he said. The prevailing reason: Cheap labor. In Bangladesh and Indonesia, workers earned about 21 cents per hour vs. the U.S. average of $8.52, he said. Many leading U.S. companies "de-coupled" from their own plants, including Levi, Sara Lee and Kellwood, he said.
"We were taking a beating," Butenhoff told his audience.
Manufacturers responded by forcing increased variety through processes designed for stability, he said. They changed old ways of production — long runs, inflexible schedules, high inventories — to new ways of mass customization — lot "sizes" of one, flexible scheduling, no inventory (everything made to order) and low-cost variety.
Blending imported and domestic product can "provide the best of both worlds," Butenhoff said — large quantities at low cost plus the flexibility to fill-in niches quickly. In addition, blended sourcing means blended cost, leading to improved financial performance that meets consumers demands for both service and low prices.
Various countries have come and gone as offshore favorites, Butenhoff said, but few will be cost-competitive with China, so a blended sourcing strategy probably will yield the best results over the long run. Sourcing decisions should be based on product quality, price point and materials considerations, and the degree of confidence in forecasts, he said.
| Butenhoff: "We were taking a beating." |
