Garment Production Returns To Europe, China And Southeast Asia Weaken Relative Advantage

Is apparel manufacturing backing home, a research published recently by Mckinsey& Companys, shows that clothing production is rapidly returning to Europe.

The collaborator of McKinsey's research is the Institut f f r Textiltechnik of RWTH Aachen University and the Aachen digital capacity Center (Digital Capability Center Aachen).

Over the past ten years, cheap labor has prompted China and Southeast Asia to become

The main production base.

But this situation is changing now, coupled with pportation and import and export costs, the production cost of jeans in Turkey is 3% lower than that in China, and the cost of production in Mexico is 12% lower than that in China.

Karl-Hendrik Magnus, McKinsey expert, said: "for some low cost garments, it is more important to produce near Europe or North America."

However, Karl-Hendrik Magnus pointed out that the biggest reason for the return of garment production to Europe lies in the time of logistics pportation.

Shorter shipping time allows fashion companies to adjust to trends faster.

Usually, garments produced in Southeast Asia are pported.

It takes 30 days and Turkey to Germany only takes 3~6 days.

Achim Berg, a senior partner at McKinsey, said that in the era of social media such as Instagram, faster response is a necessary condition for fashion companies to remain competitive.

Consumers have been in the past for a year or so for a new garment.

Current

A company must have a flexible organizational structure so that it will not miss the fresh information on the Instagram, nor will there be any oversupply of goods.

McKinsey's research report released in March pointed out that

The most important difference between the "winners" and "losers" is that the former attaches importance to consumers' opinions and suggestions in the early stage of product design. After that, a product can only be sold for several weeks from design to sale on the shelves, which greatly improves efficiency.

It is reported that the industry "winner" product delivery cycle is less than 6~8 weeks, while most of the companies in the market have a delivery cycle of more than 40 weeks.

"Automation technology" is another important factor to promote the return of production to Europe.

At present, some automation technologies have been adopted in garment production, such as laser cutting.

In the next ten years, automation can save 40 to 70% of production time and further reduce production costs.

This means producing a basic fund.

The time will be reduced from 36 minutes to 11 minutes.

A research report released in September 2017 by McKinsey pointed out that garment manufacturers will usher in a comprehensive digital pformation.

But Colin Browne, head of Under Armour, the US sports brand, gave a different view: the clothing industry has not (at least not yet) developed towards full automation and local sourcing.

In the next ten years or more, "it will be a mode of production in low cost countries with the help of AI and automation technology."

Another advantage of automated production is that accurate mapping and cutting can reduce waste of materials and enhance sustainability of production processes.

Most experts in the clothing industry believe that by 2025, sustainability will become an important decision-making factor for consumers to buy clothes.

"The automated production process uses less water, energy and chemicals," said Saskia Hedrich, co author of "Is apparel manufacturing backing home?".

Near procurement also reduced pportation distance and environmental protection.

In addition, closer procurement allows more production on demand to reduce the risk of backlog.