November 20, 2024
In the face of uncertainty, brands and retailers are looking towards nearshoring their manufacturing, a move that for many European brands signals a return to European manufacturing.
Faced wth the knock-on effects of the Covid-19 crisis, conflict in Europe and rising tensions in the Middle East, Asia and China, the traditional global supply chain is being pushed to its limits, and brands are exploring options that give them more oversight and autonomy. In addition, increasing and incoming legislation for the fashion industries is highlighting the need for brands to have more transparency over their production processes.
With 90% of companies declaring that supply chain planning was a top area of focus in 2024, it's clear that brands have been seeking out ways to address disruptions and global uncertainty, while looking to better align their manufacturing with their business goals. Research from the same study also indicated that organisations were keen to start addressing their supply chain, working to standardise processes and improve collaboration throughout.
As a result, the term ‘nearshoring’ has been on the increase, and according to a recent survey, 65% of fashion executives are considering creating new manufacturing hubs closer to their home. Globally ‘friendshoring’ has also been increasing, as companies look to move their business operations to more secure ground, that’s not just physically closer, but offers an alignment on values, taking any political uncertainties out of the supply chain. Currently 90% of the world's merchandise is shipped by sea, meaning getting ahead on nearshoring and friendshoring manufacturing stages will allow brands to avoid any tension, or future tension, in global trade relations.
At present only 6% of procurement leads in the apparel industry say they have transparency of their supply chain, while 72% of shoppers view transparency to be important, or extremely important from a brand, with a 17% spike in those that would like to see brands be more transparent about their supply chain compared to a year ago. By nearshoring production brands will be able to have greater oversight while also making moves towards complying with incoming legislation.
Image: LTM
Beyond the benefits when it comes to trade and transparency, near sourcing, particularly in Europe, also allows for more flexibility, across everything from order times to skill sets. In partnering with a manufacturer such as LTM Garments , who are based in Lithuania, brands can expect lead times of just two weeks for a proto samples, 4-5 weeks for SMS and 90-100 days for bulk orders, with sea freight alone taking up to 60 days to reach Europe from China, brands are already able to expect a much quicker turnaround. In addition, many European manufacturers also have much lower MOQs, with LTM offering MOQs of 300 pieces, allowing brands to test the market or respond quicker to consumer demand, cutting back deadstock and waste in the process.
Enabling a closer collaboration with manufacturers, brands can foster partnerships with suppliers that can lead to more flexible production models. With proximity allowing for regular visits and quicker communication across the same time zones, brands and manufacturers can define partnerships that lead to clearer quality control and more confidence and transparency in ethical labour practices. By manufacturing, and in many cases also sourcing materials, closer to home, brands are also able to reduce CO2 emissions by dramatically decreasing shipping and transport times, while supporting local manufacturers and protecting against any further supply chain disruptions.
Despite the many benefits, it's also worth highlighting the potential issues that may arise from shifting manufacturing closer to home, and allowing the time and communication to plan around them. Overall there is less capacity when moving manufacturing to Europe, as well as differing skill sets and equipment from the Asia manufacturing hubs, and with higher labour costs. All signalling the need for brands and manufacturers to partner together to prioritise, plan and invest in future partnerships.
Leading brands such as Hugo Boss are investing heavily in nearshoring their manufacturing, reducing their reliance on south-east Asia, they are even looking toward smaller city factories’ that can reponse closer to regional demand. This shift is a sure sign of the confidence in nearshoring across the market, signalling that more brands are set to follow suit. Partnering with the right manufacturer will be an essential step, having one of the widest skill sets in the region, LTM Garments are also versed in 3D manufacturing and adept at working with their partners to meet their specific needs.
LTM Garments, founded in 2004 are an European garments manufacturer from woven fabrics with stong manufacturing set-up in Lithuania, Bulgaria & Ukraine. Fashion to sportswear, outerwear to soft separates. All types, but only highest quality.
Alex is the owner of Byingildsen and member of the advisory boards or advisor for fourteen unique premium garment manufacturers and printing providers, including LTM Garments.
