We often receive urgent and out of hours calls at the studio. Designers look for last-minute manufacturing or product development because they were let down by a factory or their negligence or messed up planning. There was recently a call that struck me the most and prompted me to write this blog. A well-established brand was looking for urgent manufacturing capacity for over 500 pieces with extremely short lead times.
A conversation started and that is what we discovered:
The brand was using the same supplier for over 5 years. That’s the only supplier they ever had for their dress production: they took over 80% of the factory capacity and with very favourable prices (in fact, the brand was aware that the factory was underpaid) they were happy with the current set-up. Until one day when the brand came to collect production and the factory was shut down forever… This is an extreme example. I truly hope that a brand owner who cares about long-term growth would not be so reckless. The end of this story was obvious right from the start: an underpaid supplier couldn’t sustain the business and had the only option to go into bankruptcy. The factory doors were closed forever with all the orders sealed inside.
What should a brand owner who cares about the sustainable growth and longevity of the brand do? How to avoid the temptation of working with one factory or not to spread yourself thin and work with too many?
Here are the few pinpoints you should remember when starting your sourcing journey.
- Start your brand’s 5-year manufacturing capacity planning before you start manufacturing. Looking that far ahead will help you to plan and to manage the relationship with the factories more strategically and save time and money at the stage when they are needed the most. We can help you with the strategic production planning and the Fashion Brand Audit to address these issues.
- Never ever work with just one factory! I get it, with so many hats to wear managing relations and logistics with two or more suppliers could become daunting. But if you think about business growth goals all the hurdles will make sense.
- How many factories are too many? There is no magic formula. First, you should look at your team size. If you are a solopreneur two to three suppliers will be just about right to start with. Do not spread yourself too thin. Remember that each supplier will have to make pre-production samples for you that could burn a hole in your pocket. It’s about finding the right balance.
- Most of the larger brands successfully use a hybrid approach to their production and have a mix of fully-factored and CMT suppliers. Think about your growth journey, using both types from the get-go might elevate some pressure as your brand expands. Watch out CMT vs Fully factored masterclass to gain insights into this subject.
- A manufacturer with a narrow focus on a certain type of product is usually a more cost-effective and better quality option. Yet, there is a danger of working with too many factories. Be realistic about how many factory relationships you can manage at one time and design your collection with that in mind.
Look at the materials group you have in your collection. If you have to divide one group between two or more factories you should narrow down your factories' selection. However, there is no one shoe that fits all that will be a cost-effective solution in any situation. That’s why we are so proud of the variety of tailor-made solutions we are offering to fashion brands owner who want to successfully grow their business. Check what we have in store here.