International Garment Sourcing
Globalization has changed the way garment-printing companies compete, both in the US and abroad.
Did you know that much of the high-volume contract printing work once handled by domestic garment printers is now going to foreign shops? Learn why offshore competition has increased and how US printers can take advantage of this trend.
In the past ten years, the textile screen-printing industry has progressed through a metamorphosis that no one could have imagined. Mass merchandizing and low labor costs in foreign countries have driven garment prices down to levels that have not been seen since the mid 1970s. As a result, a large number of the biggest garment manufacturers in the US have been forced to consolidate their assets, sell off their domestic production capabilities, or fold altogether.
At the same time, many of the largest garment screen-printing operations have also downsized or closed due to foreign competition or a decrease in business. The larger facilities that remain are left to devise ways of staying competitive and profitable.
The trend became noticeable with the passage of the North America Free Trade Agreement (NAFTA). After NAFTA, a number of large contract-printers moved their operations to Mexico, lured by NAFTA incentives, as well as lower production costs. For some US firms that relocated, the experience was eye opening as they learned that business practices in Mexico bare little resemblance to business dealings in the US. Many of the print shops that were quick to move south of the border have either returned to the US to start anew or gone under. Others, however, discovered quality and cost savings that make foreign manufacturing very appealing.
One of the changes that came with the globalization of our industry was that large contract printers were forced to diversify into new and/or different applications. Some became specialty printing companies, mastering new special-effects techniques, such as high-density printing. Others expanded beyond printing into new applications like embroidery.
While all of this diversification was taking place, the overall market for imprinted garments shrank, due in part to unstable economic conditions and decreased consumer spending. To keep their businesses alive, contract printers had to expand their services until they could offer full packaging programs. Full packaging meant that the companies now offered or controlled garment manufacturing, printing, packaging, and shipping, all to the customer's specifications.
This change created an exceptional challenge for contract printers, who had little previous knowledge about garment manufacturing. When a printing operation decides to offer a full package program, it is that company's responsibility to ensure that the entire garment-manufacturing and printing process meets the customers' requirements.assuming responsibility for garment construction, printers face unfamiliar challenges. Today, they may be responsible for such things as new fabric development, confirmation of pattern accuracy, fabric color development and approval, prototype production, and of course, printing and overall quality control.
Needless to say, this requires a big change in mindset by contract printers who were used to simply taking the customer's garments out of a box, printing them, and returning them to the customer. But despite the obvious difficulties that come with such a change, quite a few large garment-printing companies have taken the challenge and have begun to offer full package programs.
How markets measure up
Almost all domestic garment manufacturers and full-package printers now offer custom garment production for large customers and are quite competitive in the right markets. Yet they are hard pressed to compete on certain fabrics and styles offered by foreign competition. Among domestic printers still using garments from domestic suppliers, the most successful ones are those who service specialty and regional markets.
What makes things even more difficult for textile printers today is the fact that garment printers and manufacturers in foreign countries are also offering full package programs. Depending on the country where the manufacturer is located, the cost of a full package program can be far below the level at which any domestic companies can afford to offer them. Today, domestic screen printers are competing for large garment orders not only with one another, but also with companies in Asia, Mexico, and the Caribbean Basin.
The Caribbean Basin Initiative (CBI) is another special trade program. It allows special discounts on duty for offshore manufacturing facilities that construct goods with American components. The introduction of the CBI was good for domestic fabric manufactures because it encouraged the use of their materials by foreign garment producers. But it struck a blow to domestic garment manufacturers, who couldn't maintain competitive pricing.
In the past, one advantage that US screen shops had over garment printers in less developed nations was a better record on health, safety, and environmental issues. Many large corporate print buyers refused to conduct business with offshore printers if they felt human rights were being violated, pay scales were too low, and working conditions too poor.
But many overseas garment printing facilities have developed into safe and efficient operations that rival their US counterparts. What this means is that US contract-printing companies are really competing on an international level and have to work harder than ever to win new business.
Ironically, one way US contract garment printers are protecting their bottom line is by going to less expensive foreign sources for their garments. But finding a suitable garment-manufacturing source requires extreme caution on the part of domestic shops. All it takes is one late delivery because any of the previously mentioned garment parameters didn't meet specifications, and you could loose the entire program to another contractor who can deliver the goods on time.
You may be considering foreign sources for your garments. Or you even may want to contract out full package programs to foreign manufacturers. If so, here are some things to keep in mind:
1. Search for a manufacturing facility with a solid (and preferably long) history of servicing custom merchandizing accounts. You can verify this through the foreign manufacturer's other customers. Most manufacturers will even provide the names of customers you can contact for referrals.
2. Confirm that the company has a solid on-time delivery history. The company's other customers can verify this as well.
3. Know the laws and regulations that apply to garment manufacturing and exporting in the country where the manufacturer is located.
4. Have a clear understanding of the duties and costs that you'll face in sourcing abroad, especially when the goods are produced from foreign yarns, fabrics, or components.
5. Establish a clear understanding with the foreign manufacturer of your turnaround expectations after final production samples are approved. Keep in mind that shipping time can increase by 4-6 weeks if the goods come from Asia.
6. If you opt to have a full package produced overseas, printing included, make sure that you know what the printing facility's capabilities and capacities are. Remember that it is easy to produce a perfect sample. The question you have to ask is whether the facility can reproduce that sample 5,000 times or more.
7. Determine whether language differences will hinder communication. Make sure that you and the supplier use terminology that is similar, especially in relation to specialty applications.
Sourcing garments through foreign manufacturers can lead to substantial cost savings. But you'll only realize these savings by selecting a stable and responsible supplier. If international sourcing is a strategy you'd like to try, make sure to do your homework.