ISKO PRESENTS DENIM TRENDS FOR SUMMER 2012 - www.sportswearnet.com:
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Wednesday, October 19, 2011
DENIM WASHES & FINISHING PROCESS
The ultimate display of detail is found in true vintage denim. The story of each wearer has been indelibly recorded on each pair- each abrasion pattern, area of wear and whiskering, each grease stain are tell tale signs of what each pair has lived through. To achieve this effect naturally takes years of wearing in dry denim without washing- the patinas created through wear are completely personal to you and tell a very special story.
This also takes a great deal of patience. A lot of blood sweat and tears has gone into discovering techniques to speed up denim aging and wear processes that produce a naturally vintage look. The majority of this very skilled work is done by hand and the process is very time consuming.
A
ABRASION
Process of making garments look worn and aged by scraping or rubbing the surface of the fabric causing abrasion. Pumice stones are most frequently used by industrial laundries.
ACID WASH
(Marble/ Moon Wash/ Snow Wash)- This finish gives indigo jeans sharp contrasts. The process is achieved by soaking pumice stones in chlorine and letting these stones create contrast. The process was created in Italy and patented in 1986.
ATARI
Japanese term describing the selective fading of the ridges of creases. The most common areas for ‘Atari’ are along side seams, on the front and back of the knees, the upper thigh, along the hem, on belt loops and along pocket seams.
Atari effect on belt loops - Martin Margiela Blue Jeans pictured
B
BLEACH
A chemical used to make denim fade. Liquid bleach is usually an aqueous solution of sodium hypochlorite, and dry powdered bleaches contain chloride of lime (calcium hypochlorite).
C
CAST
A term that describes shading. Depending on the method and type of dye used, indigo denim can have a black, brown, gray, green, red, or yellow cast to it.
CELLULOSE ENZYME WASH
Enzymes which are like yeast , are used to physically eat away the cellulose in cotton. Since the colour in denim fabric is actually on the outside of the yard, when the denim is washed in a cellulose enzyme bath the indigo is removed along with the fiber. When the desired colour has been achieved, either changing the alkalinity of the bath or heating the water stops the enzymes from reacting. A rinsing and softening cycle follows. This process is more environmentally friendly than stone washing because strip-mined pumice stones are not used.
D
DESIZING
An amylase enzyme rinse (desize) used to soften denim. A type of size such as cornstarch is added to the warp yarns prior to weaving in a process called slashing, which adds stiffness to the yarns. During the desizing step, the amylase enzyme attacks the starch and removes it from the fabric. Although this process reduces colour slightly, it is primarily used to give a softness and drapability to denim.
DIPS
Used to describe fabric or yarn when they are immersed in dye. Indigo yarns are usually dipped in an indigo bath six times.
E
ENZYMES
Enzymes, which are proteins present in all living cells, speed up chemical processes that would run very slowly if at all. They are non-toxic and readily broken down. Enzymes are used in textile processing, mainly in the finishing of fabrics and garments.
ENZYME WASH
Considered a more efficient and environmentally sound way to stone wash jeans. Rather than using pumice stones, organic enzymes (proteins) are used that eat away at the indigo. Jeans finished using enzymes tend to be stronger than those broken down by traditional stone washing, as the fabric is not subjected to the same level of abuse.
F
FINISHING
The techniques or processes performed on a garment, which give it it’s unique look.
G
GARMENT DYE
A dyeing process performed on finished garments, as opposed to a yarn dye, which takes place prior to the weaving of yarn. If you see pocket linings or labels that look the same colour as the self-fabric, the garment was likely garment dyed.
H
HAND
A description of the way a fabric feels. A subjective judgement of the feel or handle of a fabric used to help decide if a fabric is suitable for a specific end use. The hand can be described as crisp, soft, drapable, smooth, springy, stiff, cool, warm, rough, hard, limp, soapy etc. Finishing and garment wash will affect the final hand of a fabric.
HANK DYEING
This is a very special dyeing process that very few people use. The yarns are loosely arranged in skeins or hanks. These are then hung over a rung and immersed in a dye bath being dipped in and out and left to oxidize in the air between each dip giving the yarns a natural irregularity of patina and caste. In this method, the colour penetration is the best and the yarns retain a softer, loftier feel.
I
INDIGO
The dye used for denim, initially taken from the indigofera tinctoria plant. It was synthesized 14 years after it’s chemical structure was identified by Adolf Bayer in 1897. Indigo’s inherent features are good colour fastness to water and light, a continual fading and it’s inability to penetrate fibers completely. This allows the blue colour in jeans made dyed with indigo to always look irregular and individual. Pre-1920’s jeans were generally dyed with natural indigo and were- as far as one can tell by comparing vintage examples- paler in colour, with a green cast. Later jeans were a darker blue, particularly used in combination with sulphur dyes. The majority of indigo used today is synthetically made. Natural indigo has a slightly red cast.
IRO-OCHI
Japanese term referring to the fading of indigo dye in denim. The term specifically relates to fading in exposed areas and not across the entire garment.
L
LAUNDRY
In the ‘Denim Industry’, a Laundry is a manufacturing company that takes unwashed jeans and processes them. This processing includes washing, stone washing, sandblasting, garment dyeing , finishing, use of ‘Tonello’ machine with abrasive bristles, applying enzymes to simulate a ‘whisker’ effect and sandpapering by hand. Laundries today are critical in making jeans look commercial and wash development has become as important as fabric development in the denim industry. The best Laundries and wash developments come from the U.S, Japan and Italy.
LOOP DYED
One of the three major industrial methods of dyeing indigo yarns. In the loop dyeing process, the yarn is dyed in a single bath instead of several. The desired depth of colour is attained by passing the yarn through the vat several times. Subsequently as part of the same process, the yarn is sized.
M
MERCERIZATION
An industrial process used on yarn or fabrics to increase it’s lustre and dye affinity. For fabrics used in the denim industry, mercerization can be used for keeping dye on the surface of the yarns or fabrics and to prevent dyes from fully penetrating the fibres.
Mercerised cotton yarn reels
MICROSANDING
In this fabric treatment process, a series of cylindrical rolls in a horizontal arrangement, either wrapped with an abrasive paper or chemically coated with an abrasive , are used to create a soft, sueded hand. The denim is pulled over the face of the sand rollers creating a raised surface finishinig. Some colour reduction is experienced.
O
OVERDYE
A fabric dyeing process in which additional colour is applied to the fabric or garment to create a different shade or cast. ‘Dirty Denim’ is often created by applying a yellow overdye to denim. By localising the application of the tint, you can create specific areas that look dirtier than the surrounding areas.
OXIDATION
Occurs when oxygen and another substance chemically join. This occurs when indigo yarn comes out of the bath between dips.
P
PIGMENT DYES
Dyes that do not have an affinity for fibre and must therefore be held to the fabric with resins. They are available in almost any colour and are used extensively in the denim industry by fabric dyers who want to create fabrics that fade more easily.
PUMICE STONES
Volcanic stone used for stone washing garments. Pumice is popular because of it’s strength and light weight. Before the use of pumice, rocks, plastic, shoes and just about every other material was used to wear down and soften denim during the laundry process.
Pumice stones
R
RING DYEING
Describes a characteristic unique to indigo dye in which only the outer ring of the fibres in the yarn is dyed while the inner core remains white.
RIVER WASHING
A washing process using a combination of pumice stones and cellulose enzymes to give denim a vintage, worn hand. The washer is loaded only with stones and fabric for the first cycle. Enzymes are introduced for the second stage in combination with the stones and they are tumbled until a naturally aged look is produced.
ROPE DYEING
Considered the best possible method to dye indigo yarns. The threads of denim yarn are twisted into a rope, which is then fed through sequence of being dipped into a bath of indigo dye, followed by exposure to air, multiple times. The frequency determines the ultimate shade of blue.
Rope dyeing machine at Shandong Wantai
S
SANDING/EMERSING
A fabric finishing process where fabrics are sanded with real sandpaper to make the surface soft without hair. It can be performed before or after dying.
SANFORIZATION
A pre-shrinking fabric process that limits residual fabric shrinkage to under 1%. The process includes the stretching and manipulation of the denim cloth before it is washed. Raw, un-sanforized jeans will shrink 7-10% after the first wash, and continue to shrink slightly up to the third wash. Developed in the late 1920s by the Sanforize Co. and patented in 1928, the process was reportedly first used by Erwin Mills in 1936 to make denim for overalls marketed under JC Penney’s Big Mac label. Lee jeans were made from Sanforized fabric soon afterwards, Lady Levi’s introduced around 1935 were also Sanforized although most other Levi’s jeans remained shrink-to-fit for another three de
This also takes a great deal of patience. A lot of blood sweat and tears has gone into discovering techniques to speed up denim aging and wear processes that produce a naturally vintage look. The majority of this very skilled work is done by hand and the process is very time consuming.
A
ABRASION
Process of making garments look worn and aged by scraping or rubbing the surface of the fabric causing abrasion. Pumice stones are most frequently used by industrial laundries.
ACID WASH
(Marble/ Moon Wash/ Snow Wash)- This finish gives indigo jeans sharp contrasts. The process is achieved by soaking pumice stones in chlorine and letting these stones create contrast. The process was created in Italy and patented in 1986.
ATARI
Japanese term describing the selective fading of the ridges of creases. The most common areas for ‘Atari’ are along side seams, on the front and back of the knees, the upper thigh, along the hem, on belt loops and along pocket seams.
Atari effect on belt loops - Martin Margiela Blue Jeans pictured
B
BLEACH
A chemical used to make denim fade. Liquid bleach is usually an aqueous solution of sodium hypochlorite, and dry powdered bleaches contain chloride of lime (calcium hypochlorite).
C
CAST
A term that describes shading. Depending on the method and type of dye used, indigo denim can have a black, brown, gray, green, red, or yellow cast to it.
CELLULOSE ENZYME WASH
Enzymes which are like yeast , are used to physically eat away the cellulose in cotton. Since the colour in denim fabric is actually on the outside of the yard, when the denim is washed in a cellulose enzyme bath the indigo is removed along with the fiber. When the desired colour has been achieved, either changing the alkalinity of the bath or heating the water stops the enzymes from reacting. A rinsing and softening cycle follows. This process is more environmentally friendly than stone washing because strip-mined pumice stones are not used.
D
DESIZING
An amylase enzyme rinse (desize) used to soften denim. A type of size such as cornstarch is added to the warp yarns prior to weaving in a process called slashing, which adds stiffness to the yarns. During the desizing step, the amylase enzyme attacks the starch and removes it from the fabric. Although this process reduces colour slightly, it is primarily used to give a softness and drapability to denim.
DIPS
Used to describe fabric or yarn when they are immersed in dye. Indigo yarns are usually dipped in an indigo bath six times.
E
ENZYMES
Enzymes, which are proteins present in all living cells, speed up chemical processes that would run very slowly if at all. They are non-toxic and readily broken down. Enzymes are used in textile processing, mainly in the finishing of fabrics and garments.
ENZYME WASH
Considered a more efficient and environmentally sound way to stone wash jeans. Rather than using pumice stones, organic enzymes (proteins) are used that eat away at the indigo. Jeans finished using enzymes tend to be stronger than those broken down by traditional stone washing, as the fabric is not subjected to the same level of abuse.
F
FINISHING
The techniques or processes performed on a garment, which give it it’s unique look.
G
GARMENT DYE
A dyeing process performed on finished garments, as opposed to a yarn dye, which takes place prior to the weaving of yarn. If you see pocket linings or labels that look the same colour as the self-fabric, the garment was likely garment dyed.
H
HAND
A description of the way a fabric feels. A subjective judgement of the feel or handle of a fabric used to help decide if a fabric is suitable for a specific end use. The hand can be described as crisp, soft, drapable, smooth, springy, stiff, cool, warm, rough, hard, limp, soapy etc. Finishing and garment wash will affect the final hand of a fabric.
HANK DYEING
This is a very special dyeing process that very few people use. The yarns are loosely arranged in skeins or hanks. These are then hung over a rung and immersed in a dye bath being dipped in and out and left to oxidize in the air between each dip giving the yarns a natural irregularity of patina and caste. In this method, the colour penetration is the best and the yarns retain a softer, loftier feel.
I
INDIGO
The dye used for denim, initially taken from the indigofera tinctoria plant. It was synthesized 14 years after it’s chemical structure was identified by Adolf Bayer in 1897. Indigo’s inherent features are good colour fastness to water and light, a continual fading and it’s inability to penetrate fibers completely. This allows the blue colour in jeans made dyed with indigo to always look irregular and individual. Pre-1920’s jeans were generally dyed with natural indigo and were- as far as one can tell by comparing vintage examples- paler in colour, with a green cast. Later jeans were a darker blue, particularly used in combination with sulphur dyes. The majority of indigo used today is synthetically made. Natural indigo has a slightly red cast.
IRO-OCHI
Japanese term referring to the fading of indigo dye in denim. The term specifically relates to fading in exposed areas and not across the entire garment.
L
LAUNDRY
In the ‘Denim Industry’, a Laundry is a manufacturing company that takes unwashed jeans and processes them. This processing includes washing, stone washing, sandblasting, garment dyeing , finishing, use of ‘Tonello’ machine with abrasive bristles, applying enzymes to simulate a ‘whisker’ effect and sandpapering by hand. Laundries today are critical in making jeans look commercial and wash development has become as important as fabric development in the denim industry. The best Laundries and wash developments come from the U.S, Japan and Italy.
LOOP DYED
One of the three major industrial methods of dyeing indigo yarns. In the loop dyeing process, the yarn is dyed in a single bath instead of several. The desired depth of colour is attained by passing the yarn through the vat several times. Subsequently as part of the same process, the yarn is sized.
M
MERCERIZATION
An industrial process used on yarn or fabrics to increase it’s lustre and dye affinity. For fabrics used in the denim industry, mercerization can be used for keeping dye on the surface of the yarns or fabrics and to prevent dyes from fully penetrating the fibres.
Mercerised cotton yarn reels
MICROSANDING
In this fabric treatment process, a series of cylindrical rolls in a horizontal arrangement, either wrapped with an abrasive paper or chemically coated with an abrasive , are used to create a soft, sueded hand. The denim is pulled over the face of the sand rollers creating a raised surface finishinig. Some colour reduction is experienced.
O
OVERDYE
A fabric dyeing process in which additional colour is applied to the fabric or garment to create a different shade or cast. ‘Dirty Denim’ is often created by applying a yellow overdye to denim. By localising the application of the tint, you can create specific areas that look dirtier than the surrounding areas.
OXIDATION
Occurs when oxygen and another substance chemically join. This occurs when indigo yarn comes out of the bath between dips.
P
PIGMENT DYES
Dyes that do not have an affinity for fibre and must therefore be held to the fabric with resins. They are available in almost any colour and are used extensively in the denim industry by fabric dyers who want to create fabrics that fade more easily.
PUMICE STONES
Volcanic stone used for stone washing garments. Pumice is popular because of it’s strength and light weight. Before the use of pumice, rocks, plastic, shoes and just about every other material was used to wear down and soften denim during the laundry process.
Pumice stones
R
RING DYEING
Describes a characteristic unique to indigo dye in which only the outer ring of the fibres in the yarn is dyed while the inner core remains white.
RIVER WASHING
A washing process using a combination of pumice stones and cellulose enzymes to give denim a vintage, worn hand. The washer is loaded only with stones and fabric for the first cycle. Enzymes are introduced for the second stage in combination with the stones and they are tumbled until a naturally aged look is produced.
ROPE DYEING
Considered the best possible method to dye indigo yarns. The threads of denim yarn are twisted into a rope, which is then fed through sequence of being dipped into a bath of indigo dye, followed by exposure to air, multiple times. The frequency determines the ultimate shade of blue.
Rope dyeing machine at Shandong Wantai
S
SANDING/EMERSING
A fabric finishing process where fabrics are sanded with real sandpaper to make the surface soft without hair. It can be performed before or after dying.
SANFORIZATION
A pre-shrinking fabric process that limits residual fabric shrinkage to under 1%. The process includes the stretching and manipulation of the denim cloth before it is washed. Raw, un-sanforized jeans will shrink 7-10% after the first wash, and continue to shrink slightly up to the third wash. Developed in the late 1920s by the Sanforize Co. and patented in 1928, the process was reportedly first used by Erwin Mills in 1936 to make denim for overalls marketed under JC Penney’s Big Mac label. Lee jeans were made from Sanforized fabric soon afterwards, Lady Levi’s introduced around 1935 were also Sanforized although most other Levi’s jeans remained shrink-to-fit for another three de
Friday, October 14, 2011
Duty free benifits for textile and apparel imports into US
The lawmakers in the US Congress introduced a legislation in July to provide provide duty-free treatment to textile and apparel imports from the 13 least-developed countries that are not currently beneficiaries under any U.S. trade preference programme. These countries are Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Laos, Maldives, Nepal, Samoa, Solomon Islands, East Timor, Tuvalu and Vanuatu. Called the the Asia-South Pacific Trade Preferences Act (S. 1443) , this act , once enacted , would provide effective from 1 January 2012 duty-free treatment to garments and other products similar to those afforded to beneficiary countries under the African Growth and Opportunity Act (AGOA) from African and Sub Saharan region. To be eligible for preferential duty treatment:
A beneficiary country would have to demonstrate that it is making continual progress toward establishing the rule of law, political pluralism, the right to due process and a market-based economy that protects private property rights.
Preferential treatment would be available for ten years and would be limited each year to no more than the applicable percentage (beginning at 11 percent and gradually increasing to 14 percent) of the aggregate square metre equivalents of all textile and apparel articles imported into the United States in the most recent 12-month period for which data are available.
A third-country fabric provision would grant preferential treatment through 31 December 2019 for textile and apparel articles made with yarn or fabric originating in any country.
US textile industry and even the lawmakers have been historically vary of giving duty benefits to Bangladesh , Cambodia etc because of two reasons. One reason is that providing this benefit to these countries would have an adverse impact on the countries in the AGOA region The AGOA region mainly comprises of the following countries
Angola,Benin,Botswana,Burkina Faso,Burundi,Cameroon, Cape Verde, Chad, Comoros,Congo (DROC),Congo (ROC), Djibouti , Ethiopia,Gabon, Gambia ,Ghana ,Guinea ,Guinea-Bissau , Kenya ,Lesotho, Liberia,Madagascar,Malawi, Mali, Mauritius ,Mozambique , Namibia,Niger ,Nigeria ,Rwanda ,Sao Tome & Prin ,Senegal, Seychelles , Sierra Leone, South Africa, Swaziland,Tanzania ,Togo , Uganda and Zambia.
The second reason has been that US has been aware that China would benefit in terms of yarn and fabric shipments to Bangladesh and Cambodia once the duty benefit is given as imports of yarn and fabric from third countries would be allowed under the treaty..
However, if enacted, the treaty would also chip into the already reduced pie of Chinese exports which are reeling under the increased cost pressures.
But it would help in creating alternative medium sized apparel manufacturing hubs to slowly replace the large Chinese apparel hubs over a period of time and reduce the dependence of US on China.
Which country would benefit the most ?
Apparently it looks like Bangladesh , Cambodia and Laos would be the main winners from this treaty. Bangladesh is already enjoying the huge benefits of duty free imports to EU and if it also gets the same benefit from US, it would be party time in Bangladesh !
However, one thing to consider is that in 2011 Bangladesh has exported about $2.5 billion worth of goods under chapter 52 and and 62 out of the total exports of about $27 billion. This is about 9% of the imports of these items into US. So Bangladesh is very close to the 11% limit that the treaty may initially impose and will restrict the amounts to which Bangladesh can increase its exports. On the other hand Cambodia and Laos would have substantial scope of increase in exports . For denim fabric exports, these countries would become an important destination as apparel exports increases from these countries.
Congress Approves Biggest U.S. Free-Trade Agreement Since 1994
On another note , a treaty for duty free trade with Colombia , Panama and South Korea has been passed by the Congress yesterday . A number of products would be covered and US is seeking to increase its chemical, pharmaceutical and farm exports to these countries. Duties on almost 95% industrial and consumer would be phased out within 5 years ..
More details on this treaty would be provided in a separate report.
A beneficiary country would have to demonstrate that it is making continual progress toward establishing the rule of law, political pluralism, the right to due process and a market-based economy that protects private property rights.
Preferential treatment would be available for ten years and would be limited each year to no more than the applicable percentage (beginning at 11 percent and gradually increasing to 14 percent) of the aggregate square metre equivalents of all textile and apparel articles imported into the United States in the most recent 12-month period for which data are available.
A third-country fabric provision would grant preferential treatment through 31 December 2019 for textile and apparel articles made with yarn or fabric originating in any country.
US textile industry and even the lawmakers have been historically vary of giving duty benefits to Bangladesh , Cambodia etc because of two reasons. One reason is that providing this benefit to these countries would have an adverse impact on the countries in the AGOA region The AGOA region mainly comprises of the following countries
Angola,Benin,Botswana,Burkina Faso,Burundi,Cameroon, Cape Verde, Chad, Comoros,Congo (DROC),Congo (ROC), Djibouti , Ethiopia,Gabon, Gambia ,Ghana ,Guinea ,Guinea-Bissau , Kenya ,Lesotho, Liberia,Madagascar,Malawi, Mali, Mauritius ,Mozambique , Namibia,Niger ,Nigeria ,Rwanda ,Sao Tome & Prin ,Senegal, Seychelles , Sierra Leone, South Africa, Swaziland,Tanzania ,Togo , Uganda and Zambia.
The second reason has been that US has been aware that China would benefit in terms of yarn and fabric shipments to Bangladesh and Cambodia once the duty benefit is given as imports of yarn and fabric from third countries would be allowed under the treaty..
However, if enacted, the treaty would also chip into the already reduced pie of Chinese exports which are reeling under the increased cost pressures.
But it would help in creating alternative medium sized apparel manufacturing hubs to slowly replace the large Chinese apparel hubs over a period of time and reduce the dependence of US on China.
Which country would benefit the most ?
Apparently it looks like Bangladesh , Cambodia and Laos would be the main winners from this treaty. Bangladesh is already enjoying the huge benefits of duty free imports to EU and if it also gets the same benefit from US, it would be party time in Bangladesh !
However, one thing to consider is that in 2011 Bangladesh has exported about $2.5 billion worth of goods under chapter 52 and and 62 out of the total exports of about $27 billion. This is about 9% of the imports of these items into US. So Bangladesh is very close to the 11% limit that the treaty may initially impose and will restrict the amounts to which Bangladesh can increase its exports. On the other hand Cambodia and Laos would have substantial scope of increase in exports . For denim fabric exports, these countries would become an important destination as apparel exports increases from these countries.
Congress Approves Biggest U.S. Free-Trade Agreement Since 1994
On another note , a treaty for duty free trade with Colombia , Panama and South Korea has been passed by the Congress yesterday . A number of products would be covered and US is seeking to increase its chemical, pharmaceutical and farm exports to these countries. Duties on almost 95% industrial and consumer would be phased out within 5 years ..
More details on this treaty would be provided in a separate report.
Sunday, October 9, 2011
Li & Fung - Operation, Emerging supply chain changes and More....
All of us in the apparel / textile industry surely know about Li & Fung Limited - the global trading group supplying high-volume, time-sensitive consumer goods. Garments make up a large part of the Li & Fung business which also covers the sourcing of hard goods such as fashion accessories, furnishings, gifts, handicrafts, home products, promotional merchandise, toys, sporting goods and travel goods. But do we know enough about this company ?
Let’s see !!
Li & Fung is a $15 billion company.
It is headquartered in Hong Kong and orchestrates some 14,000 factories in China and around the world.
It has around 15,000 employees, and operates a sourcing network of over 80 offices covering over 40 economies across North America, Europe and Asia.
It is targeting a profit of over $1.5 billion by 2013 and a return on equity in double digits.
Li & Fung’s recently acquired of Loyaltex Apparel, Collection 2000 and Exim Designs among five new companies .Turnover and profit before tax of the five newly acquired companies were approximately US$660 million and US$80 million respectively .
Walmart is set to become its biggest client
Liz Claiborne recently decided to sell its sourcing operations—which handle all aspects of production, from finding materials to manufacturing garments—to Li & Fung Group for $83 million. Liz Claiborne still does the design and marketing for brands such as Juicy Couture, Kate Spade, and Lucky Brand jeans.
Talbots announced its intention to make Li & Fung its main global sourcing agent.
It has also taken over production for Toys ‘R’ Us, Timberland, and Sanrio, the Japanese merchandiser of Hello Kitty. Customer list is
Actually if we want to put it another way , Li & Fung is involved in the production of 40-50% of the clothes that you find in any US shopping mall – as mentioned by Forbes.com . It supplies to over 2000 customers including Kohl’s, Abercrombie & Fitch and others…
Inspite of the recession , it still gets 62% of its revenue from the American market.
How Li & Fung manages the relations with such a huge number of suppliers ?
Li & Fung tries to foster a long term win-win relation with the factories it works with. It follows the 30:30 rule . They guarantee that they will take at least 30% of the production but never more than 70% !. This is unique because they do not want the factory to be overdependent on them and works with other clients too .. Thus it tries to maintain a very organic and strong yet not overwhelming relation with its suppliers.
Is the Supply Chain Model going to undergo a change ?
Li & Fung has been following , like most others, the traditional supply chain model .The supply chain model to date goes like this:
Asia makes stuff and provides cheap labor;
Developed nations buy it all.
That supply chain pecking order, which took decades to set down , is going to change in a big way, according to Victor Fung, group chairman of Li & Fung.
“For the first time, demand is coming from countries that were traditional producers,” explained Fung. “That means it’s a much more nuanced world. It’s a total shift in how the supply chain operates. You’ll be sourcing everywhere and selling everywhere.”
At the recent IBM’s Think conference in New York, he said economies and their associated supply chains will have to adjust to one key reality: Demand won’t be onshore in the U.S. and other developed economies.
As per the Chairman Fung :
China won’t be the cheapest place to manufacture goods in the world.
A supply chain restructuring will distribute work more evenly around the world.
The supply chain is at an inflection point where costs take a back seat to speed and a fast order cycle.
Referring to the US he said, “The supply chain will move closer to you and pull jobs back into the country…”.
He is probably right . Sales in China grew to $526 million, or 6 percent of Li & Fung revenue, in the first half of the current year from less than 1 percent the year before !! This clearly shows that global supply chain is going to undergo a radical change and countries like China would become important consumers themselves forcing supply chain masters like Li & Fung to source as well supply to these places. The next two countries where their activities may be focused in the future could be India , Brazil and Russia – ie all the BRIC countries . These are the countries which are showing the fastest increase in demand growth
Let’s see !!
Li & Fung is a $15 billion company.
It is headquartered in Hong Kong and orchestrates some 14,000 factories in China and around the world.
It has around 15,000 employees, and operates a sourcing network of over 80 offices covering over 40 economies across North America, Europe and Asia.
It is targeting a profit of over $1.5 billion by 2013 and a return on equity in double digits.
Li & Fung’s recently acquired of Loyaltex Apparel, Collection 2000 and Exim Designs among five new companies .Turnover and profit before tax of the five newly acquired companies were approximately US$660 million and US$80 million respectively .
Walmart is set to become its biggest client
Liz Claiborne recently decided to sell its sourcing operations—which handle all aspects of production, from finding materials to manufacturing garments—to Li & Fung Group for $83 million. Liz Claiborne still does the design and marketing for brands such as Juicy Couture, Kate Spade, and Lucky Brand jeans.
Talbots announced its intention to make Li & Fung its main global sourcing agent.
It has also taken over production for Toys ‘R’ Us, Timberland, and Sanrio, the Japanese merchandiser of Hello Kitty. Customer list is
Actually if we want to put it another way , Li & Fung is involved in the production of 40-50% of the clothes that you find in any US shopping mall – as mentioned by Forbes.com . It supplies to over 2000 customers including Kohl’s, Abercrombie & Fitch and others…
Inspite of the recession , it still gets 62% of its revenue from the American market.
How Li & Fung manages the relations with such a huge number of suppliers ?
Li & Fung tries to foster a long term win-win relation with the factories it works with. It follows the 30:30 rule . They guarantee that they will take at least 30% of the production but never more than 70% !. This is unique because they do not want the factory to be overdependent on them and works with other clients too .. Thus it tries to maintain a very organic and strong yet not overwhelming relation with its suppliers.
Is the Supply Chain Model going to undergo a change ?
Li & Fung has been following , like most others, the traditional supply chain model .The supply chain model to date goes like this:
Asia makes stuff and provides cheap labor;
Developed nations buy it all.
That supply chain pecking order, which took decades to set down , is going to change in a big way, according to Victor Fung, group chairman of Li & Fung.
“For the first time, demand is coming from countries that were traditional producers,” explained Fung. “That means it’s a much more nuanced world. It’s a total shift in how the supply chain operates. You’ll be sourcing everywhere and selling everywhere.”
At the recent IBM’s Think conference in New York, he said economies and their associated supply chains will have to adjust to one key reality: Demand won’t be onshore in the U.S. and other developed economies.
As per the Chairman Fung :
China won’t be the cheapest place to manufacture goods in the world.
A supply chain restructuring will distribute work more evenly around the world.
The supply chain is at an inflection point where costs take a back seat to speed and a fast order cycle.
Referring to the US he said, “The supply chain will move closer to you and pull jobs back into the country…”.
He is probably right . Sales in China grew to $526 million, or 6 percent of Li & Fung revenue, in the first half of the current year from less than 1 percent the year before !! This clearly shows that global supply chain is going to undergo a radical change and countries like China would become important consumers themselves forcing supply chain masters like Li & Fung to source as well supply to these places. The next two countries where their activities may be focused in the future could be India , Brazil and Russia – ie all the BRIC countries . These are the countries which are showing the fastest increase in demand growth
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