Chapter 7: Sustainable Fashion

What does the output per worker in one hour relate to?

The organization of the work place and the quality of the equipment being used

Brokers were called farmers. Why?

They did what any broker would do: match buyer and seller at the best price

Why did Chinese factories loose business in Cambodia and Mongolia?

This was mitigated by the sudden unilateral imposition of safe guards or limits on Chinese exports of specific categories of the US

Being lean and having happy customers is the trick.

True

Over the past decade who has been among the fastest growing economies in the world?

Vietnam

The licenses giving the right to ship these products to the United States were granted to:

exporters from the foreign government

Each country is free to decide how it will distribute its quota or allocation, which was issued according to

fiber and garment type

All of China's advantages have been sacrificed to some extent,

for better garment prices are none of those advantages translate into better prices offered by retailers to wholesalers

There is nothing sustainable about

garment manufacturing in China from a green perspective

How each country will develop its apparel sector depends largely on:

population growth and the availability of other areas of employment

A country's allocations are based on

previous years records of what is shipped in the past

China's competitive advantage is in its

productivity

What are the three key concepts in terms of manufacturing sustainability?

productivity efficient use of resources pollution control

Godowns

public warehouses

In both free and controlled markets,

quota came to have a cost

In China the values of a clean environment have taken a backseat to

short term financial gain

China's products move from factory to port in...

sixty days or less

China has low cost labor, but it isn't as low as

some Southeast and South Asian countries or Africa

Retailers try to push the unsold inventory back to manufacturers, who try to push it back to:

suppliers, which try to keep as little raw material as possible in a finished condition, adding little or no value to the raw material until absolutely necessary

Consultants call it

supply chain management

Quota System

system served as a means to serve and control (US and Europe) and developing countries (China and India)

2005 controversy between the United States and China resulted in the:

temporary imposition of safeguards is a complete red herring

Retailers call this partnering and manufactures swear daily trying to be good partners to them because

the bigger party is keen on transferring risk to a smaller one

Gross margin calculation is comparing

the costs to the selling prices

The more work that is done by machinery:

the less dependent production is on low-cost labor to remain competitive

The owner of Nordstrom explained to him that he made the investment in the equipment as well as in the workforce development because

the ongoing contractual relationship with Nordstrom made the business profitable

From the beginning, some countries saw the advantage of allowing the quota to be bought and sold on

the open market. This had the effect of ensuring that the allocation would be used most efficiently, as only a factory or exporting company with a profitable order would seek out and buy a quota

The concept of productivity in making clothes relates to:

the output per worker in one hour.

As American and European companies have become more concerned about the environmental impact of their businesses,

the pressure on their supply chains has dramatically increased

Quota is a term that denoted the license issued under bilateral agreements that accounted for:

the total amount of a particular type of garment or textile that was being shipped to the United States in any one year

Why is China successful in lean manufacturing?

the use of technology and the short supply lines have combined so that time constraints are not an impediment

The middlemen are under severe margin pressure to compete with

their own customers

Change in the profile of the Philippine apparel sector is directly related:

to a reduction of population growth.

middlemen

wholesalers

Some factories that had received an initial large allocation of quota based on their previous performance got out of the manufacturing business entirely; the cost of their continued allocation from the Hong Kong government was:

zero, which left the entire selling price as profit

China has many advantages for garment production:

1. proximity to raw materials (almost all fabrics and trims are produced in China) 2. Worker experience and skill 3. infrastructure of roads and ports 4. better and faster ocean shipping to West Coast ports

What has put even more pressure on the industry and the wholesaler?

Rising costs due to currency + in-country infection in every Asian country

Major retailers annually evaluate their suppliers using a

"green" scorecard

What are the conditions and consequences of China producing everything made to order?

1. Your instructions must be complete and correct at the time you place the order 2. Your instructions are not complete, frequently the factory will not accept the order and you may loose your place in the production line. 3. You cannot make changes. Once your instructions are delivered, then it is difficult to persuade those at the factory, that it is in fact their error

Elaborate on why Chinese workers are highly productive.

-high output relative to their wages -high per-person, per-hour output due to investment that has been made in modern, efficiently computer driven technology

In mid 2014 the dollar had decreased in value against the RMB by

26 percent since the floating started

When he worked at Tami, they were buying imports:

6 months in advance based on projections. They were inevitably acquiring hundreds of unwanted units that needed to be sold off after the season to jobbers, those wholesalers that purchase merchandise at a low cost and sell to discounters

The margins on the nylon shirts from Taiwan were typically over:

70 percent, including air freight

Domestic production for Tami Sportswear was done in a house factory of about how many sewers and how many local shops?

70 sewers and 7 shops

Why did import capacity vastly increase?

Apparel manufacturing infrastructure was built up in many other countries

Why is productivity related to sustainability?

As we've seen with fuel efficiency and organic farming, no significant shift in production can take place until the costs of the product at competitive

Who was India farming out production to?

Bangladesh, Nepal, and Sri Lanka

Why did the US turn to Mongolia, Cambodia, and Nepal?

Because Hong Kong and India didn't have enough quota and they turned to these regions to quickly establish factories and trading partners.

Why was production brought back to India in 2005?

Because it was easier to manage and coordinate manufacturing in one place under one set of eyes (But Bangladesh and Nepal suffered severe economic loss)

Why did Japan also have quotes imposed?

Because it was seen as a means of low-cost apparel

why is productivity a key element of sustainability?

Because the inefficient use of human labor is wasteful, not economically vaible, and therefore not sustainable

The language used in the Bay Area of San Franscico factories is often

Cantonese

What country is the largest single source of imported apparel?

China

What region has the largest and most efficient apparel production?

China

China is unparalleled in its productivity. This is primarily due to the development of China's highly technical industry. Why do Chinese workers hold a huge advantage over those in both the developed and developing countries?

China pays its workers relatively low wages compared to those in developed countries, while possessing in infrastructure technically superior to those in other developing, low-paying countries.

What is vital in regards to instructions?

Communication -Must be done in standardized format, with every piece of information appearing in the same location for every item. -The use of terms must be industry standard

Prices for quota by category were listed:

Daily in the newspaper just like the price of common stock

For US exporters the decrease in dollar value was of great assistance because?

For producers of high tech items, it was not significant since the labor content of such expensive object is not noticeable and in any case the market demand has absorbed the cost increase easily

When he approached several Bay Area factories with the same proposition, he found that:

He could get bids on the works, but the price per unit was far too high because the technical work, like setting pockets, was going to be done by machine operators, not with automated equipment. At US labor prices, that added far too much to the cost.

What country started an open quota market immediately?

Hong Kong

Tami Sportswear imported 2/3rds of its knit tops from

Hong Kong and Taiwan

Hong Kong has been a center of wool sweater manufacturing because many of the factories from Northern China had fled to the free market there at the time of the communist revolution. Thus,

Hong Kong had a substantial allocation of wool sweater quota despite its obvious absence of sheep

In 1973, the United States imposed a quota system for textiles and apparel on its predominatly Asian trading partners, which included:

Hong Kong, Korea, Indonesia, and Taiwan

Who has added an environmental section to their evaluation of factories?

The major international auditing and inspection companies. The inspection helps wholesalers, retailers, and the public to evaluate each factory for its commitment to environmental concerns

Who has vastly invested in Vietnam? Who else?

Korean Businesses Japan and China, American investment mainly from Vietnamese/American families in the Saigon area

The North American Free Trade Agreement (NAFTA) and the Caribbean Basin Initiative (CBI) exempted what countries from quota and cases of duty?

Mexico and the Caribbean

What places did the US give nations a "special introductory offer" and were considered "quota havens"?

Mongolia, Cambodia, Nepal

What countries with command-type economies and military dictatorship governments, made it a crime to sell or buy quota?

Taiwan and Korea

Who has one of the highest population growth rates in the world?

The Philippines

The exclusion of ramie led in short order due to:

The development of ramie/cotton and other ramie or linen blends designed specifically to evade quota requirements

What provides a framework for the understanding of global manufacturing?

The history of the textile and apparel industries quota system

The effort to be lean inevitably lengthens the time necessary to fill an order, compared to

a fully stocked shelf

China is:

a low margin industry under the best of circumstances

For the author who worked at Tami Sportswear, the gross margins on the knits from Hong Kong, comparing the wholesale selling price to the landed cost (including air freight), it came out to be:

about 65% on average

The quota system:

added cost to the consumer but did nothing to slow the decline of domestic needle trade or textile jobs

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China is highly productive and technologically proficient; therefore there is...

an embracing of lean manufacturing--virtually nothing is in stock. Nothing is wasted in China. Everything is made to order. YOU PLACE AN ORDER FOR FINISHED GARMENTS AND PROVIDE COMPLETE SPECS INCLUDING PACKING OPTIONS

For wholesalers, the increase in dollar value has been:

an exit sign to leave China or lose any chance of being competitive

Quota never had...

an intrinsic cost

Western consumer economies, especially in the US are constructed...

around the presentation of as many immediate choices for the consumer as possible

Quotas were intended to

be a means to sustain and protect domestic manufacturers from what seemed to be unfair competition from other countries. This protectionist idea went down with the quota system with an eye for developing and sustaining a global textile and apparel manufacturing system

why do Chinese workers have an immense advantage?

because they are highly productive

The private label chain stores do not buy

brands at all

Organic product may not be cheaper than produce grown with chemicals, but it may be more expensive. But the premium that this product can attract...

cannot be greater than the market can bear

The supply chain must have a mass of raw material upstream but it is as far upstream with as little labor added as possible. This type of supply chain management reduced waste, although its purpose is to

clearly save the cost of carrying inventory

The quota system was designed to

create limits not cost

Quota isn't imposed on all countries. It depends on:

desirability and suspected trade potential of the country

When the quota system ended in 2005, the principle effect was to:

dislocate production in some less developed countries

The United States and its trading partner agreed to an amount of the category in:

dozens or kilograms

What is vital to sustainable production

eliminating waste both resources and money

The shift in retail market from a market that centered on a middleman as a developer and reseller of fashion to the retailer community to a model that...

emphasizes private label developed for chain stores or private label developed for department stores (this has accelerated over the past 20 years)

For private label manufactures, the increase in dollar value:

has not been burdens as they are the same entities that set their own retail prices

Vietnam's garment industry has been

has served as an entry point for labor removed from farming and as a vehicle to collect dollars and euros

Starting in 2006, the Chinese government allowed their currency (RMB) to slowly:

increase in value against the US dollar Impact: US importers paid a steady increase in prices to Chinese factories as the dollar brought less and less)

Waste is inherently not sustainable, not only because is it damaging to the environment but because

it is ultimately not economical

manufactures want to buy fabric and trim that is in stock because

it significantly shortens the production time and makes it possible to delay production choices (which styles to cut and how many) until the last possible moment

Fibers that were not significantly imported, such as:

linen, ramie, and silk

What meeting has led to very efficient manufacturing?

meeting of culture and production

Quotas were

numerical limits on the number of products in specific categories, determined by the fiber type and garment style, that could be imported from particular countries

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