Monday, July 4, 2016

Beyond Globalization: A Changing Textile and Apparel Industry

There are two distinct tiers of today’s textile and apparel industry to approach consumers. One tier embraces intricate far-flung global supply chains, a behemoth pumping endless quantities of mass-produced textiles and clothes onto the shelves of retail stores everywhere. Many of the companies operating in this tier are famous as purveyors of fashion as a commodity to the consuming masses throughout the world. 

The other tier is far smaller, comprised of local supply chains and high-value-added production. Typically produced close to consuming markets, products of this industry tier are often seen as a stylish alternative to the mass-market offerings of many fast fashion retailers. Such local industries exist in the United States and Europe; although perhaps supported by large mills, garment production is often conducted by small, specialized companies, many of which are not known beyond the confines of a regional or city market.

Indeed, the majority of consumers buy their clothes from large, integrated retailers, while a growing subset of the consuming public favors small-batch, locally produced apparel. Moreover, the appeal of local over global, small over large, reflects a shifting paradigm of consumerism.

When the forces of globalization were unleashed beginning in the 1970s -- more formally supported with the advent of the World Trade Organization in the 1990s -- the United States, the victor of the Cold War, the unchallenged leader of the global economy, enjoyed the benefits of a unipolar world. In the past, the American consumer was often seen as a buyer of last resort. Whenever the global economy tanked, American consumers were always there to take up the slack. Global manufacturers were always assured that a market existed for their products.

Sunday, May 29, 2016

How The Textile Supply Chain Can Save The Planet

Change can be difficult. It can also be disruptive. Take climate change, for example. Representatives from 192 countries recently penned the Global Climate Treaty in Paris. Although far from a comprehensive solution to the challenges of climate change, the treaty is a good start and does provide a basis for further action.

A major shortcoming of the agreement, however, is that it is so broad. Signatory countries pledged to cut carbon emissions over time, but the management of such reductions was discretionary. Further, it was unclear from the agreement text how manufacturing industries should reduce their carbon footprint over time.

But this vagueness could encourage companies, if not whole industries, to find a better way. Which brings me to our industry.

There are dozens of environmental initiatives in the global textile and apparel industry, all well-meaning and managed by determined leaders to lessen the supply chain’s environmental footprint. Taken together, the aggregate impact of these various programs falls short, pieces of an incomplete puzzle. Moreover, some of these programs are little more than marketing window dressing for consumers to feel good about their purchases and for manufacturers to bury the truth behind their business practices.

Take a look at the current state of the industry: it’s a significant polluter. For instance, a virtual plastic island floats in the Pacific, much of which is the result of product lost from container ships at sea. Moreover, those same container ships consume fossil fuels like never before; the longer the supply chains, the more fuel consumed. And there are those awful landfills, packed with endless tons of discarded clothing. There many may other examples, too. It’s not a pleasant picture.

Wednesday, September 16, 2015

Fear and Loathing Along the Silk Road

Often big ideas are hailed as history-making; that is until high-flying aspirations collide with the realities of a ceiling.

Take China, for instance. The very fabric of the country is made up of one big idea: managed growth. For a nation bedeviled by a complicated history and complex economics, the government has espoused a simple theory of social cohesion. There’s an implicit bargain between the Chinese government and the common person: stay out of politics and we’ll make you rich. Or put another way, its good to aspire to be rich, and that economic growth is essential to Chinas future.

For hundreds of years, the Chinese people have only known poverty, autocracy, and social unrest, while suffering from surly treatment by the West. China, however, now has its day in the sun. Its economic achievements are truly something to behold; advancement on a historic scale, much to the chagrin of Americans and Europeans alike.

China aspires to be a leading world power. It has succeeded. But along with its success, China has now experienced the unpredictable downside of success. Indeed, the government has prided itself on its ability to manage its politics and economy, but now the realities of economics have challenged the status quo. Growth may be good, but it has shortcomings.

Nevertheless, the growth of China would not have been possible were it not for the legions of Western buyers. Moreover, were it not for the Western demand for Chinese goods, the China miracle would not have been possible. In turn, the industriousness and creativity of Chinese workers and business leaders make this a two-way arrangement.

Life, however, sometimes injects an unexpected element. We witnessed this most recently with Chinas financial crisis. What began as a modest currency devaluation of the renminbi turned into a run on Chinas stock market. Growth comes with costs, and the bills came due all at once. Of course, these problems didn’t just happen overnight. Problems had been creeping into the system for some time now.