TEXTILES ─ Sustainability
SUSTAINABILITY IS KEY TO
GROWTH How quickly can the apparel supply chain adjust to new demands? By Cary Sherburne
“A
pparel is an old industry that is not doomed to being low profit and low technology. It’s in the midst of a reinvention, and that can be very exciting.” So says John Thorbeck of Chainge Capital, a company name that is a play on words meant to communicate change in the supply chain. Thorbeck has collaborated with Stanford Professor Warren Hausman over the past decade to study supply chains outside of the apparel industry. John Thorbeck, “We wanted to see what Chainge Capital we could learn from the experiences of other industries,” Thorbeck said, “most notably the electronics and auto industries, that could apply to the fashion industry. Our answer is a resounding ‘yes,’ there are lessons to be learned. We have focused on process innovation from those industries that might be transferrable into apparel. That learning in terms of research, case studies, models and financial metrics runs very deep and leads to our conviction that the global apparel system can perform much better than it historically has.” The apparel industry has a very large, established and complex global supply chain that is highly inefficient, a fact that has become quite apparent during the last year, according to Thorbeck. As an example of how the auto industry could provide guidance for a redefinition of the apparel
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supply chain, he and I reminisced about the NUMMI project in Fremont, Calif., an automobile manufacturing company jointly owned by General Motors and Toyota. New United Motor Manufacturing, Inc., opened in 1984 and closed in 2010. It was in many ways a breakthrough operation that built on the quality movement of the time. General Motors saw this joint venture as a way to capitalize on the significant advances in quality achieved by Toyota, a learning experience that could be transferred to other GM plants. For Toyota, it was a way to begin to establish a manufacturing base in the lucrative U.S. market. Despite its 2010 closure, as a side note, the plant currently operates as a Tesla manufacturing site. “The reference to the Fremont plant is good on several levels,” Thorbeck said. “Toyota’s breakthrough was they could bring greater quality at lower cost. At that time, quality was the mission in manufacturing. And I would say the mission today is sustainability – how can an industry respond to sustainability demands but do so at a lower cost? These are major challenges that clearly include references to the transformation of the auto industry. Current industries, like apparel, are undergoing some of the same challenges today. “The greatest costs are not in manufacturing and sourcing. The greatest costs are actually more related to risk. It’s a system that is built on lowest cost countries, wages and materials, but in fact, the largest costs are in the discounts, markdowns, lost sales and the working capital required to finance that long lead time supply chain. It’s an embedded system. It doesn’t change overnight, but it does
WhatTheyThink - Wide-Format&Signage | May 2021
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