1. The New Competitive Advantage in Apparel 1
2. The Past as Prologue: Historical Background 21
on the U.S. Retail, Apparel, and Textile Industries
3. The Retail Revolution: 39
Traditional Versus Lean Retailing
4. The Building Blocks of Lean Retailing 5 5
5. The Impact of Lean Retailing 71
6. Inventory Management for the Retailer: 87
Demand Forecasting and Stocking Decisions
7. Inventory Management for the Manufacturer: 107
Production Planning and Optimal Sourcing Decisions
8. Apparel Operations: Getting Ready to Sew 129
9- Apparel Operations: Assembly and the Sewing Room 151
10. Human Resources in Apparel 165
11. Textile Operations: Spinning, Weaving, 185
and Finishing Cloth
12. The Economic Viability of Textiles: 203
A Tale of Multiple Channels
13. The Global Marketplace 221
14. Suppliers in a Lean World: Firm and 243
Industry Performance in an Integrated Channel
15. Information-Integrated Channels: 263
Public Policy Implications and Future Directions
Appendix A List of Acronyms 281
Appendix B The HCTAR Survey 283
Appendix C Data Sources 289
Appendix D Companies Visited 295
or Interviewed by HCTAR
Subject Index 347
Name Index 365
Business Index 367
Retail stores have dramatically increased their use of information technology and systems in the last two decades. Their customers see bar code scanners at checkout counters in their local supermarkets, malls, drugstores, and many shops in the neighborhood, but bar codes and scanning represent just a small part of the changes that are transforming retailing as well as the manufacturing practices of their suppliers.
Increasingly, manufacturers must produce their items in an everwidening offering of styles at competitive prices and then replenish those products for the retailer in a matter of days. This book details changes in the U.S. apparel and textile industries driven by the demands of modern retailers. What is happening in these industries, two of the oldest sectors of manufacturing, is a microcosm of larger shifts that are affecting a growing diversity of consumer product industries and their upstream suppliers. Understanding the emerging competitive dynamics of what are often considered “sunset” industries sheds a bright light on the fundamental economic changes and challenges facing modern manufacturers.
Advances in information technology have reconfigured American retailing. Retailers can now exchange point-of-sales information—a relatively accurate measure of consumer demand—with their suppliers and accordingly require manufacturers to replenish orders much more quickly than in the past. This has changed the manufacturing rules of the game, particularly in the apparel sector. Garment makers can no longer afford to fill retail orders in months or even weeks; using the cheapest labor generally takes more time—time that many retail replenishment arrangements do not allow. Because “lean” retailing works in an entirely new way, manufacturers have had to reshape their production planning methods, cost models, inventory practices, production operations and workforce utilization, and sourcing strategies.
The introduction of time to market as a manufacturing metric has been a “stitch in time” to the U.S.-based manufacturers as they face competition from offshore low wage suppliers located far from our domestic market.
When we began our work seven years ago, we did not appreciate the scope of this transformation. In 1991, the Alfred P. Sloan Foundation approached Fred Abernathy, at Harvard University’s Division of Engineering and Applied Sciences, to develop one of its new industry research projects on apparel and textiles. Sloan was planning a series of studies to analyze American manufacturing industries and encourage long-term dialogue between academic researchers and manufacturing companies, as well as with government agencies when appropriate.
The Harvard Center for Textile and Apparel Research (HCTAR) was organized with the four of us as principal investigators, a team that encompasses a range of intellectual disciplines and experience. We are grateful for the continued support of the Sloan Foundation and the opportunities it has provided for periodic exchange with other Sloan industry projects. We particularly appreciate the interest and encouragement of Ralph Gomory and Hirsh Cohen of the Foundation.
We then proceeded to develop working relations with executives of the leading organizations in these industries, building on our past associations with major textile firms and apparel producers, leading retailers, and the two national labor organizations represented in the sectors, now merged as the Union of Needletrades, Industrial and Textile Employees (UNITE!). An advisory committee drawn from these executives has proven invaluable in occasional joint discussions and through more frequent individual conversations. We readily acknowledge their counsel and assistance in providing data, opening doors, and reacting to ideas. The members of the advisory committee in the formative stages of our study were: Peter N. Butenhoff of Textile / Clothing Technology Corporation [TC}2; Alex Dillard of Dillard’s Inc.; Paul Gillease of DuPont Fibers; Bernard A. Leventhal of Burlington Menswear; Roger Milliken of Milliken Corporation; Burton B. Ruby of Trans-Apparel Group; and Jack Sheinkman of the Amalgamated Clothing and Textile Workers Union.
One of the proven means in a university of developing ideas, educating, reviewing experience, and reining in intellectual exuberance is a series of seminar sessions with an outside guest, one who makes an initial presentation to advanced students and critical colleagues. We conducted such monthly seminars at the Harvard Business School from 1991 to 1994 when we were starting to gather data and forming our ideas. We recognize the contribution that these sessions and other seminars made to this volume and want to thank the guests and participants.