From Our CEO
The Price, and Value, of Keeping It Local
By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE
The American textile industry is the largest in the world. Yet remarkably few pieces of clothing actually carry a Made in the USA label. This circumstance can be traced back to the 1970s, when large textile mills emerged in Asia and Latin America. They offered inexpensive labor and materials, plus the ability to produce large orders very quickly.
By the next decade, retail giants such as Gap Inc. still designed and marketed their clothing but manufactured it in these factories overseas. Such early adopters then began building massive global supply chains that made it possible to assign work to whichever supplier was willing to do it the cheapest. By 2003, Gap Inc. clothing was made in more than 1,200 different factories in 42 countries.
U.S. apparel makers couldn't compete; between 1990 and 2011, about 750,000 American textile manufacturing jobs disappeared.
“In 1980, almost 80% of clothing bought in the U.S. was made in America,” CBS News correspondent John Blackstone said in a recent segment. “Today, it's around 3%.”
Blackstone interviewed American Giant CEO Bayard Winthrop, who says that his primary goal when creating the company was to produce everything, start to finish, in the United States. “I'm a free-trade person,” he told Blackstone. “But I also am a believer in saying, 'Wait a second: You cannot gut a bunch of companies in the U.S. and move [the jobs] to Bangladesh, then import all those goods back again and sell them at the local Dollar Store to all the people who now no longer have jobs.’”
Establishing American Giant’s new business model required both reinstatement and nurturing of many essential supply chain partners, particularly those related to procurement and sourcing efforts. The elaborate process included helping a cotton plantation in North Carolina find workers, setting up a South Carolina mill with essential robotics and automation, and even coaxing a yarn dryer out of retirement.
Although keeping the work entirely in the U.S. warrants a steep price tag — an American Giant hoodie costs $108 — the company is enjoying notable success. Slate magazine even called the garment “the greatest hoodie ever made.”
Winthrop is encouraged by consumers’ willingness to pay a little extra to champion companies that support American business partners. He says he hopes his efforts will inspire others to follow suit.
Procurement and sourcing education at ASCM 2019
Things are humming here at ASCM headquarters as staff members finalize preparations for next week’s ASCM 2019 in Las Vegas. Attendees will gain essential supply chain knowledge at 65-plus educational sessions. Many of these will explore procurement and sourcing: World-Class Procurement will help participants tackle challenges associated with supply chain disruption, evolving social priorities and the emergence of the digital era. A procurement and sourcing panel will feature industry practitioners discussing the major impacts and opportunities of new technologies. And the presenter of Strategic Sourcing: 10 Things I Know to be True will delve into why it’s so critical to focus on stakeholders in order to produce a superior sourcing process.
There’s still time to register and join us. I hope to see you at The Mirage!