Product Development Final Exam

China

#1 COP in the world

Mexico

#1 maker of jeans

Country of production (COP)

$ Volume & SME Square Meter Equivalency -A common unit of quantity, constant across categories and time -Sometimes MM2 = Million square meters

Macy's contribution in retail sales

$3.5 billion

Aesthetic finishes

- are finishes that improve the hand feel of appearance of a garment/fabric. These finishes may be mechanical, thermal or chemical. Some examples are chemical burnouts, abrasion such as brushing to make a fabric more warm handed or stone wash to distress denim and enzyme wash to soften fabrics. (Bring examples of enzyme wash, brushing and burnout) Examples: •Chemical __burnout__ •Brushing •_Stone_ Wash •_Enzyme_ Wash

Pilling

-(sometimes referred to as bobbling) is the formation of fuzzy balls or surface defect on textiles (carpet, clothing, bed sheets, furniture) -It begins when individual fibers are abraded from friction either during the manufacturing process, from consumer use/wear and at home in consumers' laundry machines. -This abrasion brings the fibers to the surface where they then get entangled with neighboring fibers and create little balls or other unsightly surface wear -Fabrics with shorter, thicker fibers are more likely to pill, as it's easier for these fibers to be abraded up to the surface. -Both the raw material and the manufacturing processes impact a fabric's propensity to pill. -This wear can be simulated on a laboratory machine to test how much abrasion the fabric can handle before pilling.

Intertek

-3rd party testing -Works with global retailers, brands and manufacturers to ensure safety, the quality and performance of their clothing and accessories through their comprehensive apparel testing and inspection programs

Outsource (utilize an agency)

-An agency is a business that provides a service of organizing transactions between two other parties -Partners with retailers, works as a liasion or agent between factories and the retailer -provides services as an agent in the categories of apparel, footwear, accessories, home and toys, for design, development, sourcing, production, quality control, shipping etc. (Li & Fung is an agent for many retailers & brands #1 customer is Kohl's)

The World is Flat by Thomas Friedman

-Asserted that technology, globalization & other forces have & will continue to transform the way we do business -Geography is no longer an obstacle with the internet, personal technologies & workflow software -New opportunities will continue to arise

Small items on children's clothing

-Buttons should be affixed securely -Buttons that all off due to poor attachment and quality control may pose a choking hazard or be a defect. Report this immediately as a possible hazard to the CPSC Toys and apparel must not release small pieces; this is determined through flexure, torque, tension and compression testing. These tests simulate the forces that toys and products can experience during normal use and abuse by children under 3. If these forces cause parts to break off those parts present a risk of choking, aspiration or ingestion to children under 3.

Audit coverage

-Child or forced labor -Wages and benefits -Working hours -Health and safety -Freedom of association -Non-discrimination -Harassment or abuse -Homeworkers (take it home rather than in the facility)

Levels of risk

-Country -Natural disaster -Supplier

Direct

-Does not use an agent or have a satellite office and work directly with the factory or suppliers -Negotiate best cost upfront and negotiate ownership transfer to take place at any of the following (Departure Port of Origin, Incoming USA Port or USA Warehouse) Typically takes place after a retailer/brand has worked with a factory either thru an agent or satellite office for a matter of time and has developed a relationship or trust

Other considerations besides cost in sourcing in the flat world

-Duties/taxes -lead times (order time to delivery time) -time vs location -delivery reliability -weather related risk/time -minimum order quantities -size and flexibility of production capacities -product quality, product design, and technical skills -social conditions of production facilities/compliance (ethical and social standards) -green sourcing -availability of raw materials -sufficient production capacity -geo-political risks -weather related risk/time -who vs. where

Basic treatments of textiles

-Dyeing -Printing -Finishing

Identify brand positioning

-Fashion focus -Quality focus -Cost focus

Natural disaster

-Flood, typhoon, tsunami, earthquake - unpredictable

Sample approval

-Green locks indicate the sample has been approved while red locks represent a sample that must be re-worked -A single factory produces 400 samples per year solely for Kohl's at the factory's expense (not all of these samples are approved)

Satellite office

-Having overseas offices that handle/coordinate design and production -ie. Macy's offices in Hong Kong, South Korea et.c -ASCENA offices in Hong Kong & Bangalore, India

Harmonized System code (HS code)

-Internationally standardized system of names and numbers to classify traded products -Came into effect in 1988 -Developed and maintained by the WCO (World Customs Organization) an independent intergovernmental organization based in Brussels, Belgium, with over 200 member countries

Color samples

-Lab dips -Tech design evaluates color visually in both (various controlled lighting samples and digital spectrometer)

Quantity is key

-Li & Fung manager randomly pulls the number of pieces to inspect based on quantities ordered (if the order is a smaller quantity then only a single size run is pulled) -Garments are counted at the beginning and the end of production to ensure correct order quantities

Childrens tops

-No drawstrings on hoods and children's upper outerwear in sizes 2T to 12 -Alternatives could be snaps, velcro, buttons or elastic

Childrens bottoms

-No toggles, knots and other attachments at the free ends of waist drawstrings -No more than 3 inches of a drawstring outside of a casing when the garment is extended to its fullest width

Two things you can do if you have supplier risk

-Order execution non-performance -Substandard manufacturing working conditions

Quality control

-Pre-production meeting at 0% complete -In-line inspection at 30% complete -Final inspection at 100% complete

Labor

-Production patternmaking, grading & marking -Spreading & cutting (impacts # of pattern pieces and # of layers of fabric that can be cut together impacts) -Assembly (time to sew the entire garment * hourly pay rate) -Finishing (pressing, folding, packing)

Factors that influence COP (country of production) choices

-Proximity to fabric source -Competencies -Wages -Trade agreements -Risk mitigation

Li & Fung

-Started in 1906 in Guangzhou; now headquartered in Hong Kong -First few products: -1970's Victor & William Fung were Harvard professors - left their jobs & went back to China to takeover the family business -Bought out family members & merged western and eastern processes

Developing a sourcing strategy

-Strategic partnerships with best in class manufacturers throughout the world -Diversified countries of production to mitigate risk -Factory capacity management & competency expertise -Understanding of geopolitical climate & economic environment

Stretch and recovery

-The amount of stretch a fabric has is typically measured by a percentage -Bad stretch recovery will leave garments looking saggy and worn. -Better quality stretch goods typically have better recovery.

In-line sewing inspection

-This report is done everyday by the factory's quality assurance team -Red arrows are used to point out flaws (ex: the t-shirt below had puckering at the bottom of the hem) -White threads mark garments in the sewing line -Quality assurance managers measure every part of the garment -The measurements must come within 1/4 inch in order to be approved

Color comments

-Too blue/dull, should be yellower/brighter -Much too light, should be much darker

Bumps in the road in a flat world

-Trade regulations -Natural disasters -Currency risks -Political instability -Terrorism -Pandemics

Audit parameters

-Unannounced basis -Physical facility assessment -Audit of records/documentation (payroll/age verification) -Private worker interviews (randomly selected) -Living facilities/dormotories

Domestic importer

-Utilizing various US vendors that handle design, production & importing -Acts as the importer of record for the purchase orders for the brand or retailer Ideal for: -Fashion (quick turnaround) -Re-create/re-order a style that is selling well -Smaller niche categories (maternity, product needing specialization, swimwear, lingerie)

Li & Fung

-World's largest sourcing company -Global supply chain manager -Consumer goods design, development, sourcing and logistics -Primarily for US and EU brands & retailers -Mostly apparel and toys -Network orchestrator (Does NOT own factories but rather orchestrates the production at these factories for brands and retailers) -Contracts with manufactures to produce products for retailers and brands -Supply chain solutions -Assisting brands and retailers in entering new international markets

Wrinkle resistance

-Wrinkling diminishes the visual aesthetic of apparel and home textiles -Fabrics can be evaluated in terms of their resistance to creasing and wrinkling

3 goals of the fashion pact

1) ) achieve zero greenhouse gas emissions by 2050 2) restore biodiversity by reinstating natural ecosystems and protecting endangered species 3) address ocean pollution by eliminating single-use plastics by 2030

Advantages of textile and apparel cluster locations

1) Convenient transportation: close to highway 2) Market vicinity: close to major cities, especially Hong Kong, Guangzhou and Shanghai 3) Excellent technology and resources available: communication and transportation infrastructure in the area

Chinese holidays

1) January 1st = New Year's Day 2) 1st day of 1st Lunar month = Spring Festival 3) 5th solar term (April 4 or April 5) 4) May 1st = Labor Day 5) 5th day of 5th Lunar month = Dragon Boat Festival (usually in June) 6) 15th day of 8th Lunar month = Mid-Autumn Festival (usually in September) 7) October 1st = National Day

Labor differentiators

1. Availability 2. Cost 3. Skill level 5. Collectiveness (Union Activity)

Top 10 locations for Macy's imports

1. China 30% 2. Indonesia 22% 3. Vietnam 12% 4. Inda 6% 5. Phillippines 4% 6. Bangladesh 4% 7. Taiwan 3% 8. Cambodia 2% 9. Sri Lanka 2% 10. Malaysia 2%

Kohl's

1. Climate 2. Waste & Recycling 3. Sustainable Sourcing 3 ways what retailer is going to achieve 100% sustainable sourced cotton in proprietary brands by 2025?

Product Quality

1. Conformance to internally established product standards and specification 2. Consistency between identical products 3. Meets the customers expectation... aesthetics, functional performance, care, fit and comfort etc. 3 perspectives of what? (a factor Macy's does NOT compomise)

5 strategies in sourcing production

1. Joint venture 2. Outsource (utilize an agent) 3. Satellite office 4. Domestic importer 5. Direct

Certified B corporation

A certification that measures a company's entire social and environmental performance. The B Impact Assessment evaluates how a company's operations and business model impact their workers, community, environment, and customers. From supply chain and input materials to charitable giving and employee benefits, proves a business is meeting the highest standards of verified performance.

Bill of lading

A document that states what purchase orders, carton count, weight, cost, etc. are on the trailers. There can be more than one bill of lading per trailer or container since each vendor will have their own

Critical issue

A needle hole was found in a shirt -Deemed as this -Indicates that one of the machines could have been broken -Every shipment of that color was re-opened and re-inspected -Each broken needle found is report -If a hole is present (can re-sew wovens, can't re-sew knits)

Jumper

A term used for a sweater in the UK

Rat

According to the Chinese calendar, 2020 is the "year of the..."

Functional finishes

Add performance elements to fabrics and garments such as moisture repellents and flame retardants. Examples: -Moisture Repellents (Waterproof most expensive, water-repellent, and water resistance least expensive) -Flame Retardants -Moisture wicking

NAFTA

Agreement that involves USA + Mexico + Canada

Fiber examination

All cashmere fibers are doubled checked for quality and purity through authorized third party laboratories and then also at Artwell's on-site laboratories.

ELC (Estimated Landed Cost)

All costs with the acquisition of imported goods

Indonesia

Alternative to china

Worldwide Responsible Accredited Production (WRAP)

An independent, objective, non-profit team of global social compliance experts dedicated to promoting safe, lawful, humane and ethical manufacturing around the world through certification and education

Raw materials

Artwell collects the best cashmere from cashmere goats of __Inner Mongoloia__Between April and May the goats are manually combed rather than sheared so it is completely harmless to the animal. Once the raw cashmere fibers are collected, they are sorted, dehaired, and washed to remove coarse outer hair, dirt, and any impurities mixed during the combing process.

Spinning

Artwell had optimized this process and integrated it with its garment production. This creates efficient manufacturing processes while minimizing quality issues. Customization can happen with spun-to-spec production that allows yarns to be fitted to different knitting gauges, stitching, tension, and finishing requirements so yarns can be knitted freely on computer machines with no knots and breaks. The knitting process is also included in the same area to maximize production as well as causing less chance of damage to the fibers.

Finished product

Artwell meets the compliance requirements of all its customers. It is important that these values and standards of their customers are met and taken seriously and that processes are followed in order to maintain those standards. These ideas are carried out even in the packaging and shipment process to ensure the customer is receiving the very best cashmere product.

Research and development (R&D)

Artwell's excellent quality begins with their on-site laboratory where special trained technicians test and examine the wool fibers before they even begin the manufacturing process. This allows them to make sure their product will meet the market's expectations and needs such as the fibers' strain, water and oil resistance, pilling prevention, and different garment care options.

China manufacturer specialties

As a result of government & private investment, China has become the leading manufacturer of apparel • The Chinese govt. has established centralized development zones to specialize in certain products • This maximizes economies of scale because they can out perform decentralized manufacturing firms in other countries Industrial parks planned by the government get tax breaks and partnerships with logistic providers • Private companies host massive dormitory complexes for their workers; providing shelter, food, basic necessities and health care

New manufacturers

Audit application -Approved for use only after the facility has undergone a third party audit that verifies compliance with our code of conduct

Existing manufacturers

Audit application -Subject to re-audit every 12 to 18 months as a condition of continuing to be an approved Macy's manufacturer

Tech pack and spec sheets

BOM •Communicates with a manufacturer all the necessary components needed to construct a product. •Typically includes at least info regarding: •Measurements •Materials •Color specifics •Trim •Grading •Labels •Hang tags •Illustrations •The more detailed a tech pack is, the less room there is for error

Trade

Benefits retail consumers to have many choices of products at the best price Why what matters?

Better prices

Better strategy for retailers: Purchase raw materials =

Spinning process

Blend, card, comb, twist, stretch, pull, knit, bleach and dye

The World is Flat

Book by Thomas Friedman -Start of Fast Fashion & Cross-docking

Competing in a Flat World

Book by Victor Fung, William Fung & Jerry (Yorum) Wind -Dispersed manufacturing -Process orchestration -Network orchestration -30/70 principle (the goal is to have more than 30% of the business of a given supplier, to be meaningful and ensure commitment, but no more than 70% of it's capacity, to ensure flexibility and encourage learning)

Chroma

Brighter/duller

Trimmings

Buttons, zippers, snaps etc.

Certificate of Origin

COO

Finishing

Can be done in the fabric or final garment stage of production and is used to help enhance the comfort, maintenance, safety and durability. Most finishing processes are a chemical process.

Pressing

Can be used to fix quality issues -To fix puckering (knits can be pressed, woven's have to be re-sewn)

Beijin

Capital of China?

China-Pakistan economic corridor (CPEC)

China + Middle east countries = China global production

Choking hazards

Clothing made for children ages 3 and under need to be evaluated for potential this

Childrens wear

Clothing requirements in the united states 1. Choking hazards 2. Lead tests & phthalates -Flammability

End to end architecture of STM process

Collaboration, active decision making, upfront planning, clear ownership at all levels and shared calendars and adhearance

Vietnam

Complex knits and activewear are made here

Decreased

Consumer prices of apparel has BLANK dramatically

Materials

Cost per yard

1/4

Cotton prices are nearly what fraction of what they were at their all-time high in 2011?

Garment making

Customer service is especially important to Artwell and before even starting production, group meetings and training takes place so that workers of different departments can take special notes for orders and specific requirements.

Sock city

Datong is also known as this

Single or multiple

Depending on where you are traveling, a visa can be valid for how much visits?

Higg FEM

Designed to: Measure and quantify the sustainability impacts of a facility • Reduce redundancy in measuring and reporting sustainability performance • Drive business value through reducing risk and uncovering efficiencies • Create a common means and language to communicate sustainability to stakeholders

Sourcing

Determines the manufacturing locations and suppliers

Process orchestration

Different places of the process can be handled at different places (dispersed manufacturing) to create the right product at the right time at the right price

Garment dying

Dyeing an entire garment after it has been constructed. Suitable when all components of a garment are dyed the same color but not suitable if a garment has different colored elements such as thread, zippers, lining, cuffs, applique or piecing details. (Bring Garment Dye Sample)

Piece goods/fabric dye

Dying of fabric after it have been woven or knit. Economical and fast, this is the most common method in solid colored garments. Not ideal for very thick fabrics and dye may not penetrate the most inner parts of fabric and will not absorb, creating an inconsistent end result.

Estimated Landed Cost

ELC

First cost + overseas shipping + agent commissior + customs + risk + overhead

ELC =

Why are most of China's production facilities on the East coast?

Easier to produce and access ports to export

Quality

Ensured by the direct purchase of fibers from herders. To ensure purity and supply while cashmere fibers are scarce, all collected fibers are stored in a climate-controlled warehouse.

Washing

Every garment goes through a professional washing, spinning, drying, and then checked again for "flawless quality".

Pressing and packing

Every garment is pressed and shaped. This helps get out unwanted wrinkles that could affect the aesthetic of the garments. During packaging garments are paired with their correct labels, tags, care labels and then doubled check to ensure every order is correct.

Trimming

Every trimming must match the sample provided by Kohl's

Security

Facilities will maintain facility security procedures to guard against the introduction of non-manifested cargo into outbound shipments (i.e. : drugs, explosives, biohazards and/or other contraband ) Facilities will ensure adequate controls are in place to safeguard against introduction of any non-manifested cargo. In this regard, WRAP recognizes the United States Customs and Border Protection (CBP)'s C-TPAT Guidelines for Foreign Manufacturers as a best practice program, and has adopted those guidelines under this Principle.

ELC

First cost + Overseas shipping + Agent commissior + Customs (duties, taxes, tariffs, VAT, brokers fees, harbor fees) + Risk (Insurance, compliance, quality, safety stock costs) + Overhead (purchasing, staff, due diligence cost, travel, exchange rates) =

Overhead

Fixed and variable costs of operating the business

Fiber dye

For natural yarns which are spun into yarns from fibers. These fibers can be dyed prior to the spinning process. This is an expensive method so is less common than some other. Also, this method will create a natural variance ("heathered" effect) in color throughout the yarn/fabric/garment.

Eastern coastal provinces

For policy and economic reasons, Textile & Apparel (T & A) manufacturing clusters first concentrated in China's what? (Zhejiang, Jiangsu, Guangdong, Fujian, Shandong and Hebei.)

China

From what country does the USA import the majority of their clothing and footwear? (20% of the worlds population)

Ultraviolet protection factor (UPF) fabric

Functional finish -A numerical rating given to clothing to indicate how effectively the fabric blocks ultraviolet (UV) radiation

Antimicrobial

Functional finish -Helps prevent odor-causing bacteria -Capture the offensive odors within a protective barrier, shielding the "stink" until washing -Used for active and athletic wear

Testing and certification

General requirements for children's clothing in the united states -Testing and certification by a CPSC-recognized (US Consumer Product Safety Commission) third-party laboratory is required for all applicable requirements including flammability, lead and phthalates.

Digital spectrometer

Gives more of an objective measurement of color -Measure the light reflected from an object in the visible spectrum, spectral data uniquely identifies a color (like a fingerprint)

Types of printing

Hand and mechanical

250

How many brands are there in the fashion pact now? (56 companies)

32

How many brands were there originally in the fashion pact?

22

How many countries does Macy's have manufacturers in?

471

How many manufacturers does Macy's have? -Strategy has been to reduct the # of manufactures to become more important to those we do business with, yet still not have "all of our eggs in one basket" to reduce our risk

282

How many suppliers does Macy's have?

Quality focus

Identify brand positioning -Driven by R&D, technical innovation, fabrics and quality control

Cost focus

Identify brand positioning -Manufacturing efficiencies, engineering designs to a tight budget and visibility to all information across supply chain

Fashion focus

Identify brand positioning -Need for innovative research & development -Fast turnaround, an effective design process and a vendor relationship focused on innovation

Where are most factory workers from?

Inland china, and migrate towards east china for jobs

Bangladesh

Is labor cheaper in Bangladesh or Colombia?

Lucky year

It is considered your "BLANK" if the Zodiac year is the same as your birth year (Chinese year)

2025

Kohl's Plans to Achieve 100% Sustainable Sourced Cotton in Proprietary Brands by

Bill of materials (BOM)

Legal agreement with the manufacturer

1%

Less than what percent of cotton is grown without pesticides?

Connecting the supply chain

Li & Fung Collaborate -> Innovate -> Source -> Oversee -> Deliver

Trading, logistics and distribution

Li & Fung's 3 networks

Lightness

Lighter/darker

Patagonia and Athleta

List 2 retailers that are B corp cerfited

Quality control remote outpost

Locations where they post people to oversee manufacturing locations

Flammability quality testing machine

Loose fitting sleepwear, thinner fabrics(less than 2.6 oz), and fuzzy fabrics with a pile can ignite and burn quickly from small-open flames. The US Code of Federal Regulations requires that children's sleepwear must be flame resistant and self-extinguish if a flame from a candle, match, lighter or a similar item causes it to catch fire. This applies to all children's sleepwear above size 9 months and up to size 14

Vertically integrated pipline

MMG NY -> MMG international -> overseas suppliers -> manufacturers -> cargo consideration -> shipping

12-18 months

Macy's code of conduct holds suppliers responsible for the merchandise produced and are audited how often?

Inland

Macy's is moving manufacturing where because of higher min wage but remain coastal and north for shipping reasons and accessibility?

70%

Macy's top 50 suppliers handle what percent of their total volume?

Cookware

Manufacturing skill specialization in China and Indonesia -Variety of brands -Raw materials (stainless steel, aluminum, cast iron) -Production (stainless steel and aluminum)

Why a trade agreement with Mexico and Canada is important to USA retailers & brands

Many U.S. manufacturers use parts from Canada or Mexico to make "Made in the USA" products that are sold in both countries. • Many products that say "Made in Mexico" or "Made in Canada" include U.S. parts or services • Some larger U.S. retailers have stores in Mexico and Canada they stock with goods exported from the United States, and NAFTA makes it easier for U.S. retailers to make online sales to customers across the borders.

Country

Many are underdeveloped, political issues, disruptions, gov changes unexpectedly needs to be able to manage these

Provincial

Minimum wage in China is established at what level?

Canada or Mexico

Most of the USA's consumption of these items -Chocolate -Asparagus -Watermelon -Fresh & frozen beef are imported from what 2 countries?

Supplier

Multiple brands are produced by the same... (Target, Kohl's, Chicos, Fed)

North america free trade agreement

NAFTA

Trader joes and Aldi

Name 2 retailers that are working on sustainable packaging as a part of PD strategy

Levis

Name a brand that is working towards reduction in natural resources as a part of PD strategy

3%

No individual supplier at Macy's as more than what percent a share?

Tomb-sweeping day

Oingming or Ching Ming Festival • A traditional Chinese festival on the first day of the fifth solar term of the traditional Chinese lunar calendar. • This makes it the 15th day after the Spring Equinox, either April 4th or 5th • Also known as Chinese Memorial Day and Ancestors' Day • This is a public holiday in China

Quality control

Overseeing manufacturing of products in surrounding area

India

Pants, jeans and shirts are made here

Buy meeting

Place orders

Pakistan

Polos and tees are made here

Cross stocked

Pre-packaged, pre-labeled and has RFID

Solution dye

Process of adding pigments to solution before extracting through a spinnaret. Without getting too in depth about man made yarn production, know that man made/synthetic yarns are made by melting down a solution which is extracted through tiny holes in a "spinnaret" which forms the thread. Excellent colorfastness to light, washing, crocking, perspiration & bleach.

Container

Products are shipped in big metal boxes referred to as a

Quality control

Reactive during production - set of procedures to ensure product meets the quality standard. Requirements throughout production (consistent)

Hue

Redder/greener/yellower/bluer

Climate

Reduce greenhouse gas emissions in Kohl's-ownded operations by 50% 2014 baseline by 2025 • Further reduce energy consumption by 10% at Kohl's facilities by 2025, building off the company's existing 20% reduction against 2008 baseline • Expand renewable energy platforms by building off the company's • Support the transition to a low-carbon transportation system, building off of the company's existing 96 locations offering electrical vehicle charging.

Sourcing channels

Retailers use a range of different channels depending on their levels of expertise and volumes

Supplier

Risk that you give an order to a supplier and they're unable to execute in terms of quality and delivery

90%

Roughly what percent of US cotton comes from genetically modified seeds that were designed in labs (some in WI) to produce more cotton and resist pests? (Note: The Monsanto Corp. who developed genetically engineered crops was acquired by Bayer in 2018)

Special administrative regions

SARs

Quality assurance

Sets the standards and criteria - defined as a procedure or set of procedures intended to ensure that a product or service under development (before work is complete, as opposed to afterwards) meets specified requirements

Inspections

ShinSun is very brand conscious and aware of their clients values and standards. Each product goes through three different inspection processes during production and must receive 100% in all areas.

Pattern making

ShinSun's advanced software allows for a digitalized process which includes ink jet printers, automated cutters, and marker-making system.

10/25/19

Signatory companies of the Fashion Pact met in Paris for a first working meeting 1) to define the organizational arrangements for the coalition 2) agreed to report on their progress in September 2020 3) 24 more companies in the fashion & textile sector joined

Magnitude

Slightly too.../too..../much too....

Lab dips

Small fabric sample

Slivers

Snowy ropes of yarn are referred to as what at spinning facilities?

Adjusting to changes in the retail market

Sourcing in the flat world -Market polarization according to price and brand -increased competition -decreasing margins -consumer demand for newness

STM

Speed to Market

Inditex

Strategy of what fashion group: Instead of committing a large percentage of production for the next fashion season, the company commits a small amount and uses customer feedback and an efficient production network to replenish stores with new and different products weekly. • New styles are prototyped in just 5 days • 60% of the manufacturing happens locally to shorten lead-times • For Zara, it can take a new garment as little as 15 days to go from design and production to be in the store

Routine finishes

Such as removing "sizing" which is a wax finish applied to yarns for lubrication before weaving or knitting, are essential to all garments.

Functions of full service office

Take orders and do full array of merch technical and quality control

Crocking

Tests are performed for wet and dry, from a third party testing company, Intertek (this same company is used by Walmart)

Wicking

The ability of a textile material to disperse or spread liquid throughout a given area -These types of better fabrics are typically made of high-tech polyester, which, unlike cotton, absorbs very little water. Cotton typically absorbs 7% of its weight in water while polyester only absorbs 0.4%

Labels

The factory orders these from another supplier -These must arrive on time in order for the shipment to meet the date given by Kohl's Quality Assurance Managers must check UPC and gum labels throughly to ensure complete accuracy (examples: spelling, correct size, country label)

First cost

The original billed cost

Dying

The process of adding color to "_greige_ goods" (Raw fabric before undergoing dying or bleaching) 1.Solution Dye 2.Fiber Dye 3.Yarn Dye 4.Piece Goods/Fabric Dye 5.Garment Dye

Dyeing

The production processes have been fully optimized to meet requirements for environmental preservation such as Chemical Oxygen Demand (COD) under a centralized waste water disposal system. The factory is environmentally friendly, power saving, and reduces carbon dioxide emissions during production. This is also done by selecting chemical products that ensure the safety of chemicals and absence of heavy metals.

Chinese holidays

There are currently 7 official public holidays in mainland China. Each year's holidays are announced about 3 weeks before the start of the year by the General Office of the State Council. A notable feature of mainland Chinese holidays is that weekends are usually swapped with the weekdays next to the actual holiday to create a longer holiday period.

Guatemala, Honduras, El Salvador and Haiti

These 4 countries are best at making activewear and knits

The US Free Trade Agreements

These are the countries where the United States has this with -Australia -Bahrain -CAFTA-DR -Chile -Colombia -Israel -Jordan -Korea -Morocco -NAFTA -Oman -Panama -Peru -Singapore (14)

Tag and label heat press

This machine steam-presses labels into the fabric

Sewing

This process is one of the most important in production. Workers are given the tools they need to make sure each order is standardized and at peak quality. Garment samples, pictures, & in-line inspection give workers guidance & direction. Advanced sewing machines are also available tools for workers and can be set to different functions such as button hole sewing, belt loop attaching, etc. to increase quality and efficiency.

Garment inspection

To provide a clean environment with little distractions, single-directed pathways and partitioned workstations are used which is especially important during production. Each department is reviewed and analyzed so that each worker can monitor their defect rate, maintaining a higher level of quality and efficiency.

Ultraviolet protection factor fabric (UPF) and antimicrobial

Two types of functional finishes

Prohibition of labor

WRAP: -Facilities will not hire any employee under the age of 14 or under the minimum age established by law for employment, whichever is greater, or any employee whose employment would interfere with compulsory schooling

Compensation and benefits

WRAP: Facilities will pay at least the minimum total compensation required by local law, including all mandated wages, allowances & benefits. Facilities will ensure proper compensation for their employees for all the work done, by providing in a timely manner all the wages and benefits that are in compliance with the local and national laws of the jurisdiction in which they are located. This will include any premiums for overtime work or work done during holidays, as well as any other allowances or benefits, including any mandatory social insurance, required by local law.

Hours of work

WRAP: Hours worked each day, and days worked each week, should not exceed the limitations of the country's law. Facilities will provide at least one day off in every 7 day period, except as required to meet urgent business needs

USA, China and India

What 3 countries is cotton mostly produced in?

Routine, aesthetic and functional

What are the 3 main types of finishes?

Central

What area of China has the highest minimum wage?

Snap and shank buttons pull quality testing

What can a company do in order to prevent incidents/injuries based on small choking hazard items on apparel?

US

What country exports more cotton than any other country?

Shanghai Yangshan port

What is the busiest container port in the world?

$351.81

What is the minimum wage in Shanghai for 2019 converted to in USA dollars?

2480 CNY/month

What is the minimum wage per month in Shanghai for 2019?

22.8% increase

What percent difference is the min wage in Shanghai in 2019 vs 2015

80%

What percent of customers buy based on colors?

20-30%

What percent of garment cost comes from labor?

50-60%

What percent of garment cost comes from the raw materials?

10-30%

What percent of garment cost comes from transportation, duties and other supply chain costs? (Cost of labor is rising significantly each year)

Amerex group

What retailer recalled Infant fur jackets due to choking hazard? The firm has received two reports of the snaps detaching from the jacket, including one report of a child that began to choke

Selfridges

What store was one of the original signatories of the Fashion pact? Started their sustainability labeling program in 2017 • The Sustainable labelling program helps to educate and guide customers to shop with more environmental awareness • The Buying Better program highlights specific sustainable product attributes: • responsible leather • reducing waste • vegan • forest friendly • cruelty free • supporting communities

2020 CNY/month

What was the minimum wage per month in Shanghai in 2015?

Yarn dye

When yarn is dyed before being woven or knit into fabric.

Screen printing (hand printing)

Where a screen is cut into a pattern and layed over a fabric so that dye can be pushed over it and dye will reach fabric in areas where screen was cut into a pattern. Much like a stencil.

China

Where are buttons best processed?

Japan

Where are zippers best processed?

Heat transfer (hand printing)

Where heat is applied and a print from a paper is transferred onto the fabric.

China

Where is fabric best processed?

Bangladesh

Where is production best processed?

Pakistan

Where is yarn best processed?

Batik (hand printing)

Where wax is applied by hand to fabric so that when dye is applied the wax resists and dye does not penetrate the areas where wax was applied.

Ikat (hand printing)

Where yarns are tie-dyed prior to weaving/knitting

Fashion pact

a coalition formed of influential fashion brands and businesses working together on a series of commitments climate, biodiversity and oceans to reduce the industry's environmental impact • In August 2019, executives from 32 leading fashion and apparel companies signed the "G7 Fashion Pact," a nonbinding sustainability accord designed by French president Emmanuel Macron and François-Henri Pinault, CEO of Kering (a French conglomerate whose portfolio of luxury brands includes Gucci, Yves Saint Laurent, Balenciaga and Alexander McQueen).

Visa

an endorsement placed within a passport that grants the holder official permission to enter, leave or stay in a country for a specified time period.

Joint venture

ie. L Brands (Bath & Body, Victoria's Secret, Pink owns 49% of MAST industries) -one of the worlds biggest contract manufacturers, importers, distributors of apparel -have manufacturing operations and these in 12 countries -also provides private label merchandise for other brands (ie. Abercrombie & Fitch, Lane Bryant, New York & Company, Chico's etc.)

Cashmere

one of the most sought-after fibers in the world. It's fine hairs are softer, lighter, and can be up to three times more insulating than sheep wool.

Block printing (hand)

printing when a block is essentially used as a stamp.

Printing

the process of adding prints & patterns to the surface of a fabric or garment. Can be executed on greige goods or can be executed over dyed fabrics or goods.

Tie dye (hand printing)

where fabric is tied and dyed so that dye does not reach and penetrate all portions of the fabric.

Higg Facility Environmental Module (Higg FEM)

• A sustainability assessment tool that standardizes how facilities measure and evaluate performance, year over year • A facility should complete and post one of these per year

Sustainable sourcing

• Achieve 100% sustainably source cotton in Kohl's proprietary brands by 2025 • Achieve 50% of products containing polyester to be made with recycled materials in Kohl's proprietary brands by 20205 • Require all approved facilities producing Kohl's private-and exclusive-branded products to complete the Higg Index Environmental Module by 2025 • Utilizing the Higg Index, drive substantial water reduction use in the production of Kohl's owned branded products by 2025 • Emphasize the elimination and reduction of chemicals in Kohl's-owned brand products and strive for a zero-discharge supply chain of hazardous chemicals building off of the company's existing chemical sustainability program.

Waste and recycling

• Divert 85% of Kohl's US operational waste from landfills by the end of 2025 • Label 100% of Kohl's-owned branded packaging with the How2Recycle label by 2025 • Reduce the amount of plastic and cardboard in Kohl's owned branded packaging

Inditex

• The largest fashion group in the world, operates over 7,200 stores in 93 markets worldwide. • Owns Zara, Zara Home, Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius and Uterqüe.

Markets

•A guide used in the cutting process •Typically CAD used to configure pattern pieces to reduce fabric waste as much as possible

Artwell

•A leading international cashmere sweater manufacturers that as a __vertical___ manufacturer •Everything from dyeing, spinning, and garment making is done on site. •This allows the company to control and guarantee it's cashmere purity and quality •Also shares the interests and values of its customers by ensuring no harmful substances are used

Hand printing methods

•Block •Tie Dye •Ikat •Batik •Screen Printing •Heat Transfer uncommon in mass production as it is time consuming, expensive, and it is hard to control variances in print.

Customs trade partnership against terrorism (C-TPAT)

•Created after 9/11 •To ensure security throughout supply chain Main areas of Concern •Physical security •Access control •Procedural security •Truck and container security •Personal security •Information technology security

Lead tests and phthalates

•Excessive lead in fabric dyes, trim finishes, and surface prints can poison kids! •Phthalates are chemical plasticizers used in the production of plastics and paints -There are currently six types of banned phthalates in toys and child care articles that are used to facilitate sleeping, feeding, teething, or sucking

Label laws

•FTC oversees USA label laws •Apparel items must have: 1) Fiber content 2) Country of origin 3) Manufacturer identity (usually with an RN #) 4) Care instructions •Labels must be attached permanently and securely •Labels must be legible during the useful life of the product

Points of measure - tops

•High Point Shoulder •Length from HPS @ CF •Length from HPS @ CB •Across Shoulder •Sleeve Length _Sweep

Cotton

•Represents nearly half of the total fibers used to make clothing today. •_The USA_is the largest grower of this •Most is now genetically modified, using vast amounts of water as well as chemicals. •Production is responsible for about 18% of worldwide pesticide use and 25% of total insecticide use. •Impacts of these chemicals on both land and human health are being considered

Mechanical printing methods

•Roller •Flatbed Screen •Rotary Screen (fastest) •Heat Transfer •Digital

ShinSun factory

•Specializes in women's woven apparel •a popular place for many American retailers to produce and manufacturer their goods: does work with Fortune 500 companies. •a one stop shop for retailers needs by being able to make products in a variety of fabric types •innovation and advanced automation allows them to have modern assembly lines that produce twelve million woven trousers, tops, dresses, and jackets annually

Avoid lead and phthalates design solutions

•Use fabrics with organic and vegetable dyes •Use natural fibers •Check lead content of hardware including enamel snaps, buckles, and buttons •Check lead content in non-metal trim and embellishments such as puff prints and screen prints

Points of measure - bottoms

•Waist Circumference •Front Rise •Back Rise •Side Seam Length •Inseam Length •Hip, Thigh, Knee and Leg Opening Circumference •__ Sweep __

Phthalates

•are chemical plasticizers used in the production of plastics and paints

Crocking

•occurs when excess dye rubs off of one dry fabric onto another dry fabric. •is usually more of a problem with dark and vivid colors •Bleeding is a similar problem to crocking, but occurs when dyes transfer from one fabric to another when both fabrics are wet •occurs when the dye is physically rubbed off •Transfer of dye from the surface of a dyed or printed fabric onto another surface by rubbing •The more color is transferred, the more the fabric does this •determines the amount of color transferred from the surface of colored textile material to other surfaces by rubbing. •Dye this is the result of color loss by mechanical actions such as friction and abrasion. Can be the result of lack of penetration of the dyeing agent, the use of incorrect dyes or dyeing procedures, or the lack of proper washing procedures and finishing treatments after the dyeing process. If the textile dying or printing process is not done properly, the rubbing-off of dye from a fabric may occur.

Macy's Private label brands

-Apparel 72% -Home 18% -Footwear 6% -Fashion accessories 4%

Strategic sourcing

-Costs -Quality -Product Innovation -Logistics & amp; Speed to Market -Social Compliance Major considerations in what?

How the supplier role has changed over the past 10 years

-Design and product development collaboration -R&D sourcing and positioning of inputs -Multi-country manufacturing options -Inventory management and replenishment -Financing (have access to sales figures from most of their customers) -Logistics: most everything is cross-stocked

Cotton

-Exported to Mexico to make fabric -Used to manufacture denim & other finished products -Then imported back to the US -The full supply chain cost increase would be $166 million annually if there was not a FTA with Mexico

Supply chain attributes

-Flexibility -Transparency -Speed -Variability

Import

-Government -Weather -Economy Disadvantages to what type of production?

Domestic

-Higher labor costs -Higher material costs -Could be less expertise in some categories Disadvantages to what type of production?

Supplier Matrix: By product family at Macys

-Home 96 suppliers -Bed & Bath 50 suppliers -Housewears/tabletop 46 -Footwear 16 -Apparel 160 -Fashion accessories 10

Macy's has full service offices in these areas

-Hong Kong -Seoul Korea -Taipei Taiwan -Florence Italy -Dehli India -Singapore -& many others

SARs

-Hong Kong and Macau are these -Former colonies - Hong Kong British and Macau Portugese - that rejoined China in the late 90s -Their economies and distinct political systems are allowed to flourish under separate regulatory regimes from the Mainland under the slogan "One Country, two system"

2 billion

-How much money worth of chocolate do US retailers import from Canada and Mexico? -Without NAFTA, 10% consumed in the US would be hit by tariffs at a total cost of $261 million annually. On Valentine's Day alone, tariffs could cost U.S. consumers and additional $13 million

NAFTA

-Is/was a free trade agreement between the United States, Canada and Mexico that took effect in 1994. • It reduced tariffs and other trade barriers between the three countries, allowing raw materials, parts and finished goods to flow freely. Doing so has increased export markets for U.S. manufacturers while lowering prices for U.S. consumers. • An estimated 14 million U.S. jobs depend on the $3.5 trillion in annual trade between the three countries. • In September 2018, the United States, Mexico, and Canada reached an agreement to replace NAFTA with the United States-Mexico-Canada Agreement. NAFTA will remain in force, pending the approval of USMCA

Import

-Less labor cost -Lead time -Higher risk Advantages to what type of production?

Why has there been a loss of US manufacturing jobs in the past?

-Lower wage labor overseas -Advances in technology including automation - -Strong US dollar

Item cost considerations

-Materials -Trimmings -Labor -Freight -Duty/Tariffs -Overhead

Manufacturing sites by Region for Macy's

-Middle East & Europe 2% -Indian Subcontinent 16% -Central American 2% -East Asia 40% -Southeast Asia 40%

Provinces

-Most of China is broken up into these -But there are several other geographical units of the same hierarchal rank as these

Other geographic units of China

-Municipalities -Autonomous regions -Special administrative regions (SAR's)

Domestic

-Quick response systems -More reliable shipping -Easier "policing" violations of human rights/child labor Advantages of what type of production?

Pre-production

-Samples -Engineering -Color approvals -Materials lined up

Margins

-Shift production to lower-cost countries -Use lower cost materials -Lower quality For retailers and brands, options to protect their...

Advantages of STM

-Shortened lead times -Streamlined development -Stronger supplier partnerships -Better able to react to market trends

Visas

-Tourist -Student -Work -Transit Most common types of...

Free Trade Agreement

-USA has these in many countries -These agreements eliminate or reduce tariff rates, improve intellectual property regulations, open government procurement opportunities, ease investment rules and much more -The agreements help level the international playing field and encourage foreign governments to adopt open and transparent rulemaking proceudres, as well as non-discrimnatory laws and regulations -To be entitled to preferential tariff treatment, goods must meet the "originating" criteria as set out on the Rules of Origin of individual FTA's

Duty rate

-Vary from 0% to 37.5%, with the average being 5.63% -Some goods are not subject to this (ex: some electronic products, or original paintings and antiques over 100 years old)

Visa

=Some require an application to be filed prior to entering the country and other visas are granted upon entering the country. • Some countries require an interview or medical screening prior to applying for this

Special Economic Zones (SEZ)

• set up to encourage development and foreign investment with tax concessions and other government measures. • began in 1980 as a provincial government initiative supported by Deng Xiaoping. • Tend to be prosperous, have foreigner communities, and have more Western restaurants and facilities. - Shenzhen - Zhuhai - Shantou in Guangdong - Xiamen in Fujian - The entire island province of Hainan - The Pudong district of Shanghai

Product development life cycle

Product conceptualization -> line creation, sourcing, pre-production, buy meeting, production and logisitics

COO

Required upon importation of preferential duty rates to apply

42 million

Retail supports about how many U.S jobs? Of which approx. 7 million are related to trade?

Lower quality

Retailers and brands cut costs =

China

What country is Macy's largest supplier?

SARs

What has... -Their own currencies -Issue their own visas -Elect their own representative assemblies through a combination of direct and indirect representation

East coast

Where are most of China's production facilities?

Passport

used to verify one's country of citizenship. If traveling outside your country, it is used to regain entry into your country of citizenship.

Chinese business culture

• Much of the business done in the culture follows the idea of Confucius which involves the influences of harmonious relationships, morality, justice, and sincerity. • Business and contracts are often done at the dining table • It is as much about the social connection as it is the actual business discussion

Datong (sock city)

• Produces approximately 1/3 of the entire world's sock supply • Makes roughly 2 pairs of socks for every person in the world, each year

Chinese lunar calendar

• Significantly impacts planning / timing of production and shipments • figures years, months and days according to astronomy. • Chinese people may select certain "good luck" days or avoid bad luck days for weddings, funerals, moving, or beginning a business.

Chinese new year

• The Chinese New Year is the most important holiday in China & is also known as "Spring Festival" • The first day of the New Year falls on the new moon between January 21 and February 20 • Celebrations traditionally run from the evening preceding the first day, to the Lantern Festival on the 15th day of the first calendar month. • The calendar is also used in countries that have been influenced by, or have relations with, China - such as Korea, Japan and Vietnam • This holiday is very important to factory workers as most are from inner China who have traveled to eastern China to work in factories. • Workers take this time to go to their hometowns to see their families and factories shut down for 2-4 weeks. • This becomes the largest human migration in the world! • Therefore, production and shipping of products should be planned around the New Year / Spring Festival