Defining the Key Issues of 1999

Bobbin, Dec, 1999 by Kathleen DesMarteau

The industry achieved major milestones this year -- both technologically and ethically.

Whereas the Asian crisis and year 2000 compliance concerns dominated many apparel and sewn products executives' thoughts in 1998, this year those concerns took a back seat to issues ranging from e-commerce strategies to labor law compliance.

And it was a year of exciting firsts -- Levi Strauss & Co. brought body scanning to the mainstream spotlight, and the Worldwide Responsible Apparel Production (WRAP) program gained multinational support, with new partnerships being formed between the American Apparel Manufacturers Association (AAMA) and leading apparel organizations from around the world.

Unfortunately, it also was a year of tragic natural and political disasters in some apparel-producing regions. Turkey suffered staggering losses of life in the wake of major earthquakes, eastern North Carolina was hit hard by Hurricane Floyd flooding, and parts of Mexico faced killing mudslides. Moreover, Indonesia struggled to maintain peace after much bloodshed in East Timor, and Colombia continued its fight for peace in the face of political corruption and militia pressures.

The "usual suspects" also were on the scene, in terms of ongoing issues the industry is either rigorously fighting against or lobbying for, depending on your side of the fence. The U.S. Congress' debate continued over whether the nations of the Caribbean Basin should be granted NAFTA parity with Mexico, and China continued to perch on the brink of acceptance into the World Trade Organization (WTO), but as of press time, hadn't quite made the cut.

Toward the end of this year, the industry's buzz over the potential impact of WTO quota phaseouts gained volume. This issue is likely to be one of the most-discussed topics of the early 2000s, as manufacturers and retailers plot sourcing plans with global producers who will be freed of their quota shackles by 2005.

Defining Your Space

Many apparel manufacturers may have found themselves humming, muttering or screaming the old Stones' lyric -- "Hey! You! Get off of my cloud!" -- in 1999 as textile mills, retailers and new on-line entities sought a piece of the apparel pie.

Private label programs reached all-time highs, with an estimated 35 percent of all women's wear sales going to retailers' brands, according to a Bobbin Americas presentation by the AAMA Quick Response Leadership Committee.

Major textile manufacturers shifted significant portions of their fabric production to Mexico, and began taking advantage of apparel sourcing opportunities for themselves there and elsewhere. Meanwhile, on-line "pure plays" ventured into the apparel market, ambitiously courting consumers with virtual stores, hoping to land very real profits.

The bottom line for apparel and sewn products firms, however, wasn't necessarily bleak. In the case of expanding private label programs, ifs true that more major retailers moved to cut their traditional apparel suppliers out of the loop as they sourced more goods -- lock, stock and barrel -- on their own. The well-oiled Asian sourcing machine no doubt got its fair share of this business. Still, there were opportunities for U.S. firms that gave retailers a reason to give them the business, namely by offering effective vendor managed inventory, or a better cost-value equation.

Likewise, in the on-line arena, much of what is being sold by the new breed of "e-tailers" is being made by established apparel firms. This market promises to be dominated in the future by those that can employ next generation garment design and construction techniques, such as engineered digital printing and modular manufacturing. Those that can offer state-of-the-art supply chain logistics also will lead the pack.

The Great Hook-Up

This year has seen tremendous activity in the area of computer systems integration. It's no coincidence that this trend comes at a time when seemingly every industry buzzword there is -- supply chain management, collaboration, globalization, customization, consumerism -- has some relation to implementing a form of information technology.

Whereas the past few years have yielded pilot programs and fledgling first efforts at collaborative planning, forecasting and replenishment (CPFR) by the industry's market leaders, 1999 marked a turning point at which more firms realized that they too could benefit from the information-sharing action.

It's true that retailers such as K-mart still are in the process of rolling out CPFR with only a pool of their key leading vendors, but the ripples of this early CPFR wave have prompted thousands of other apparel vendors to link themselves electronically with their customers and suppliers. These early linkages, whether for downloading care label content information or transmitting EDI documents, will be the cornerstones for taking the supply chain to new speeds, and for building new direct-to-consumer distribution networks.

At the same time, 1999 was a watershed year for the industry on the Internet. While Web apparel sales still are a small fraction of the overall business, software developers unveiled a bounty of new tools this year designed specifically for making contact with consumers on-line, and sealing the deal. Barring some catastrophe that scares the public away from e-commerce, the on-line market for apparel can go nowhere but up.