Made in China, Bangladesh or America?
Made in China, Bangladesh or America?
The belief that socially responsible low-cost country apparel production can be realized on a broad scale is almost dead. Even big firms struggle to ensure that manufacturing in China and Bangladesh meets minimal social standards and might very well end up back where they came from: home.
Bangladesh is the newest frontier in apparel manufacturing. Even cheaper than China, even less restrictions on work conditions. Pretty much every large label produces there by now. One of the world’s poorest countries has become a major textile manufacturing destination. Just check your clothing’s labels, you may be surprised where it’s from. And it doesn’t matter if you wear inexpensive apparel or high-end fashion. All the major players are there, driven by the permanent search for ever lower unit costs. Never at the expense of labor standards, though. That’s what they claim.
Here are the facts: Nearly 500 garment workers have been burned to death in factory fires in Bangladesh in the last five years. They weren’t just working for unknown exploitive discounters but for major Western corporations as well. One that looks up those accused of some kind of involvement will come across many of the big names. Public uproar however has been limited thus far.
The trend we’ve seen over the last years was to increasingly buy ‘organic,’ which very often is associated with socially responsible. But while eco-friendly production standards certainly make a difference, sustainability is a broader concept. You can very well have workers sew clothing in sweatshop conditions while using organic cotton. This certainly isn’t what’s happening everywhere, but we hear of more and more stories where this is the case.
‘So what’s the way out?’ you must be wondering. There may be two kinds of solutions: As a large label, you could send your task force down to your low-cost country production location and rigorously control manufacturing conditions on location or even take over the management yourself. And hope you’re not overlooking the fact that many factories outsource some work to other factories (that often have their workers labor under worse conditions). Or you could just bring manufacturing back home. What seemed implausible in the 90s is becoming an increasingly valid option.
Companies need to ask themselves how ‘fair’ production can take place in a country where fair labor conditions are extremely hard to monitor and enforce (if not impossible). In a country where many factory owners may very well prioritize profits over humane working conditions. Let’s not stereotype, but the reports we receive from Bangladesh do in fact draw a pretty gruesome picture. It’s not just about people being burnt in factories, it’s about everyday work conditions as well. And if it turns out it’s not feasible to enforce fair labor standards, companies need to consider a plan B.
In fact, the social benefits of bringing manufacturing ‘home’ may be enhanced by the economic ones. So here’s why local manufacturing could very well be the future: First, customers love ‘Made in USA’ (or ‘Made in France’ or ‘Made in Germany’) and are willing to pay a markup for it. Not a significant one, but one that may make a difference. Plus, customer increasingly understand that ‘organic’ clothing that is shipped from overseas isn’t as eco-friendly after all. Second, local production means more flexibility. If you don’t have to ship your stuff halfway around the globe before you sell it and thus don’t need to produce in large batch sizes, you may very well be able to keep inventories lower and react to trends quicker. That’s something that becomes increasingly crucial in the fast-paced world we live in. Third, you limit the risk of severely damaging your brand. It’s happened to lots of the big brands already, where journalists found out about the conditions under which they produced, ending up paying the price in terms of revenue decreases. Or worse, where workers were in fact severely harmed.
Companies should thus increasingly consider local production an opportunity that shouldn’t be overlooked. The race for the lowest-cost manufacturing destination may after all not be the silver bullet. Companies that dare to rethink their approach to manufacturing may be the ones that surpass the ‘old-fashioned’ players. And I’m not just proposing this - we’re actually doing this right now. Together with two friends I recently launched a kids’ fashion company that strives to create affordable childrenswear (0-24 months) that is not only organic but ‘Made in USA’ as well. Interestingly, despite the fact that we don’t have the scale of a large brand, we managed to set up production in the USA. Not only that, but we were able to achieve that at production costs that enable us to sell on par with the big players. It’s true, we’re certainly not going to be the cheapest price, but we won’t be the most expensive either. And we’re not the only ones- we believe that there’s a wave of companies reconsidering this option at the moment. Global change in clothing manufacturing is possible.
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