Fashion Industry Data Research
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Individual Assignment
Industry Data Research
Industry: Textile Industry
Research Issue: Production Data
Date of submission: 22 NOV 2010
INTRODUCTION
Manufacturing in the clothing industry is best described as the conversion of fabric and textiles (which are typically produced by textile-specific manufacturers) into finished, wearable apparel products. With a market value of $480 billion in 2008 and expected growth to approximately $700 billion by 2012 (Global Textiles and Clothing Industry, 2010), the textile industry as a whole continues to be a massive economic driver. The clothing industry is one of textiles most viable and visible pillars, as it maintains a swift growth rate as well. Globally, the apparel industry has shown a compound annual growth rate of 2.6% from 2001-2009, and is expected to increase to 3.24% for the period 2006-2011 (Bombourg, 2010).
Despite great advances in technology over the past few decades, the apparel industry continues to be incredibly labor-intensive. Due to the high labor content in apparel manufacturing, there are very few economies of scale (First Research, 2010). This has led to a significant shift in the global production from the traditional producing power-regions (North America, Western Europe) to those with significantly less expensive labor costs (China, Southeast Asia, Mexico, Eastern Europe). This will be discussed in further detail a bit later.
PRODUCTION STRUCTURE
In order to fully understand clothing production data, it is first necessary to be au fait with the clothing production circuit. Since the apparel industry is a highly fragmented one, where each task within the production process needs a certain skill and technology level (Dicken, 2007), it is not uncommon for every step of production of a particular garment to be performed in a different country or continent. As a result, the less sophisticated, labor-intensive work typically relocates to developing countries that offer lower wages and a high work force, while the technology and capital-intensive aspects of the production circuit remain in the more developed countries.
Excluding the manufacturing of raw materials (e.g. cotton), Dicken breaks down the production circuit into six phases, which are illustrated in Figure 1 below.
FIGURE 1: The clothing production circuit
Source: Dicken, 2007, p.250
Beyond these six phases, Dicken further differentiates apparel into three types:
Basic garments
Fashion-basic garments
Fashion garments
Basic garments describe a mass product in which the manufacturers concentrate on quantity rather than on quality. The aim is to produce as much as possible and as cheaply as possible, since the target markets are almost all apparel markets around the world. The target group, in this case, is defined by income rather than by age or fashion orientation. Basic garments are labor-intensive and less sophisticated goods, and therefore typically produced in more developing countries.
Producers of fashion-basic garments, on the other hand, set the value of their product more on quality than the previous class. Their focus is producing the highest possible quality at the lowest possible price. Appropriate markets for this type of production are the western regions of the developed countries, as well as many of the Newly Industrialized Countries (NICs). Target groups in this sector are also characterized somewhat by income, but more heavily by age and fashion orientation. Therefore, workers with the highest possible skill-level and the lowest possible income are needed.
The last group, fashion garments, is a purely high quality product that requires highly sophisticated technology and equally qualified workers. The fabrication focuses primarily on the product quality, while monetary efforts (cost limits) are rather secondary. Target markets for this product class are developed countries, and the target group is defined by a higher income and a distinctive fashion orientation. These products most often manufactured in these same developed countries.
Ignoring the production of fabrics, the process of making apparel starts with the design phase. This step usually takes place in the headquarters of the large apparel companies, which are most often located in developed countries. High-skilled designers and engineers start with the preparation of pattern and colors, which are transferred (nowadays typically via internet) to the next production facility.
Once equipped with fabrics and pattern, workers start the physical part of the production process. Since sub-contracting in the clothing industry has become a very popular practice (Dicken, 2007), the cutting phase (though still considered part of preparation) is often the first production step to be outsourced. This part of clothing production is less sophisticated and commonly takes place in developing countries in Asia (e.g. Indonesia) or North America (e.g. Mexico). Sub-contracting will be discussed in further detail a bit later.
The actual production of the garment is the next step in the process, and is most likely to be outsourced to sub-contractors in countries with low wages. This includes such manufacturing tasks as sewing and further assembly, as these require low-skilled workers.
Once the final pieces of the garment are assembled and sewn, the article finds its way back around the world to the Newly Industrialized Countries, often also in Asia (e.g. South Korea) or in Eastern Europe (e.g. Romania), to be finished. The subsequent quality control either happens in these countries or back in the developed countries. The final product is then distributed to its final destination, where it is ready for the end customer.
With respect to sub-contracting, the process is best understood when looking at the two types of sub-contractors. The first types are those who produce the same products as the parent company; in this case, employees of both countries are in direct competition. The others are sub-contractors who produce only parts for the production process. Often single production steps are dislocated to the workers physical homes,