Bridging the Gap: Apparel 3PL Can Help Make Up for Poor Infrastructure


There's been a mild resurgence of manufacturing activity taking place, of all places, in California over the past few years. If when you think of the state you think of it primarily as the Golden State - a place defined by its beaches, its vineyards, its idyllic weather or its unparalleled entertainment industry, this might make sense. Who wouldn't want to be based there? If you think of California as a place plagued by sky-high living and labor costs, heavy regulatory burdens and other hurdles to doing business, the manufacturing revival might be more surprising.

But sure enough, many companies are indeed happily setting up shop on the West Coast . This fact highlights an important aspect of apparel logistics:

Sometimes, labor costs are the most important factor driving decisions about where to set up shop - but not always. Take Tesla, for example , the electric car manufacturer that builds its wares in the Bay Area:

"California from a manufacturing perspective is not the place for site selection," he said. But certain factors common to the Bay Area - a spirit of innovation, pool of skilled workers and high-quality infrastructure - can at times offset the state's economic disadvantages. [...]

Good infrastructure is critical to Tesla, especially when it comes to receiving components in a timely fashion. Taylor said the U.S. system of roads and other logistics resources is far superior to that of India and even China, when one ventures beyond the latter's coastal regions. "If you don't get that part on time," he said, "you don't build a car."

Other notable companies manufacturing in California include Intuitive Surgical, a maker of high-end surgical robots that relies on the expertise and technical capabilities readily available in California, and Hitachi Global Storage Technologies, which benefits from the cheap energy and research and development resources available in Silicon Valley.

Note, however, that most such companies (with the notable exception of American Giant, an apparel e-tailer) are producing either luxury products, which tend to have much higher profit margins, or technologically sophisticated products, which require a more educated workforce and highly developed infrastructure.

For lower value, higher volume products common to the apparel industry, controlling labor costs can be much more important.

In these situations, speed-to-market in fashion can still make the difference between profit and loss. Thus, superior supply chain logistics are necessary to overcome the frustrations inherent to manufacturing in distant corners of the globe. At The Apparel Logistics Group, our third-party fashion logistics capabilities - especially our apparel supply chain management expertise - can help bridge the gap between labor costs and infrastructure.

Posted: 2/5/2013 3:51:44 PM by Global Administrator | with 0 comments

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