Going local with your manufacturing

The combination of rising demand for increased transparency (sustainability), the COVID-19 pandemic and the conflict in Europe have forced companies to rethink their supply chain practices. This is particularly true regarding production operations and there's a burgeoning inclination to acquire domestic suppliers, especially in the garment business. Below, we've listed 5 advantages to be expected when relocating production closer to where you operate.

1. Duty - The majority of items coming from China are subject to duty rates, which can add up to a sizable sum. For example, textiles from China to Europe have a 12% duty rate, while those manufactured within the eurozone have no duty charges. Furthermore, when transportation and import costs are factored in, the expense of denim products made in Turkey is 3% cheaper than those coming from China. Therefore, it is becoming more cost-effective to base production in Europe rather than Asia for some items.

2. Lead Time is an evident advantage. Both sea and air shipping times can be drastically cut by relocating production domestically. Typically, a 30 to 40 day shipping period is decreased to a 3-5 day transit time. This results in less need to keep a large amount of inventory, thus freeing up capital to be used in other areas of the business and increasing cash flow. Reduced delivery lead times also allows fashion companies to react faster to trends. You can read more about lead times in particular in this article about how to reduce lead times

3. Oversight and control - When keeping production closer to your market, managing it becomes simpler. It's easier to hold face-to-face interactions with suppliers, assess quality and standards, and troubleshoot issues. Moreover, facility inspections can be carried out regularly while keeping travel costs low.

4. Language & Cultural barriers - When partnering with a foreign producer, you may experience language and cultural obstacles. These can make it hard to reach agreements on contracts and costs, comprehend processes and ethics, and respecting cultural diversities.

5. Automation - Experts suggest that automation is inducing production to come back to Europe. With technology ever evolving, automation is anticipated to decrease manufacturing lead times by 40% for more complex products and 70% for uncomplicated designs over the next decade, ultimately leading to lower expenses.

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