innovation in the textile and clothing industry

Sewing up the competition – innovation in the textile and
clothing industry
Manufacturing doesn’t get much older than the textile and
clothing industry. Since the earliest days when we lived in caves
there’s been a steady demand for something to wrap around us to
keep warm and to protect the more sensitive bits of our anatomy
from the worst of the elements. What began with animal hides and
furs gradually moved into a more sophisticated activity with
fabrics woven from flax or wool – and with people increasingly
specializing in the business. In its early days, this was very much
a cottage industry – quite literally people would spin wool
gathered from sheep and weave simple cloths on home-made looms. But
the skill base – and the technology – began to develop and many of
the family names we still have today – Weaver, Dyer, Tailor, for
example – remind us of the importance of this sector. And where
there were sufficient cottages and groups of people with such skill
we began to see concentrations of manufacturing – for example, the
Flemish weavers or the lace makers in the English Midlands. As
their reputation – and the quality of their goods – grew so the
basis of trading internationally in textile and clothing was
established. The small-scale nature of the industry changed
dramatically during the Industrial Revolution. Massive growth in
population meant that markets were becoming much bigger whilst at
the same time significant developments in technology (and the
science underpinning the technology) meant that making textiles and
clothing became an increasingly industrialized process. Much of the
early Industrial Revolution was around the cotton and wool
industries in England and many of the great innovations and
machinery – such as the Spinning Jenny – were essentially
innovations to support a growing international industry. And the
growth of the industry fueled scientific research and led to
developments like the invention of synthetic dyes (which allowed a
much broader range of color) and the development of bleaching
agents. There’s a pattern in this in which certain manufacturing
innovation trajectories play a key role. For example, the growing
mechanization of operations, their linking together into systems of
production and the increasing attempts to take human intervention
out through automation. Of course, this was easier to do in some
cases than others – for example, one of the earliest forms of
programmable control, long before the invention of the computer,
was the Jacquard punched card system which could control the
weaving of different threads across a loom. But actually, making
material into various items of clothing is more difficult, simply
because material doesn’t have a fixed and controllable shape – so
this remained increasingly a labor-intensive process. By the
twentieth century the industries had become huge and
well-established, with growing international trade in raw materials
such as cotton and in finished goods. The role of design became
increasingly important as basic demand was satisfied and certain
regions – for example, France and Italy – began to assume strong
reputations for design. Branding became increasingly important in a
world where mass communications began to make the telling of
stories and the linking of images and other elements into
advertising which fueled demand for clothing as much more than a
basic necessity purchase. Mass production methods and the
scientific management approaches underpinning them diffused rapidly
– and in the case of clothing assembly which remained a
labor-intensive process – led to the quest for lower wage cost
locations. So, began the migration of clothing manufacture around
the world, visiting and settling in ever cheaper locations across
the Far East, through much of Africa and Latin America to its
present home in China. Today this is a global industry embracing
design activities, cutting and processing operations, assembly,
distribution and sales – all fueled by a huge demand for
differentiation and personalization. This is an industry in which
price is only one element – non-price factors such as variety,
speed, brand and quality matter. And it’s an industry dominated by
the need for high-frequency product innovation – fashion
collections no longer run along the old seasonal track with winter
and summer collections. In some cases, the range is changed every
month and innovation in information and communications technology
means that this cycle is getting shorter still. All of this has
shaped an industry which is highly networked across global ‘value
chains’ and coordinated by a few major players. Much of the ‘front’
end of the industry is about major brands and retail chains whilst
the ‘backroom’ operations are often small-scale subcontractors
often in low wage cost areas of the world. Like so many industries
it has become somewhat footloose and wandered from its origins –
leaving behind only a small reminder of its original dominance.
Compared with countries like India and China, today’s European
clothing industry is a small player on the global stage. There are
some exceptions to this – and they underline the power of
innovation and entrepreneurship. Just because the dominant trends
lead in one direction does not mean that there isn’t scope for
someone to spot and deploy ways of bucking this trend. One such
player was a young clerk working in a small clothing retailing
business in northern Spain. Frustrated with his career prospects
Amancio Ortega Gaona decided to strike out on his own and in 1963
invested his savings – the princely sum of $25 – into a small
manufacturing operation making pajamas and lingerie. In classic
fashion, he peddled (and pedalled – his earliest transport was a
bicycle!) his wares around the region and built the business over
the next ten years and then decided to move into retailing as well,
opening his first shop in the north-western town of La Coruna in
1975. Things have moved on somewhat since then. Industria de Diseno
Textil – Inditex – the holding company which he established – is
now worth around $8 billion and has just opened its 2000th store in
Hong Kong. Active in nearly 70 countries this textile and clothing
business has eight key brand groups, each targeted at particular
segments or product types – for example, ‘Pull and Bear’ for
children, ‘Massimo Dutti’ for older men and women or ‘Oysho’ in
lingerie. Best known of these is ‘Zara’ – a global brand with
strong design and fashion identity running through both the clothes
and the stores in which they are sold. Its clothes combine stylish
designs with a strong link to current high-fashion themes with
moderate prices. As Lotte Freddie, fashion editor of the Danish
daily newspaper Berlingske Tidende, commented ‘If you want a
classic, Italianate look in tune with current styles and at a
reasonable price go to Zara’. Zara’s successful growth is not
simply a matter of low cost or of standardization but rather of
innovation. The company has become a leader by exploiting some of
the key non-price trends in the industry – for example, variety and
product innovation. For example, over 10,000 different clothing
models are created and sold every year – this is most certainly not
a case of ‘one size fits all’ or of long-lasting product types!
Ortega has taken the entire system for creating clothes and built a
business – and originally did so in an area which did not
previously have any textile tradition. At an early stage in the
development of the manufacturing business he moved back into
textile finishing operations to make sure that the colors and
quality of the material he used to make the clothes were up to
scratch. Not only did this give better quality control but it also
opened up the road to offering exciting and different fabric
designs and textures. There are now 18 textile designing and
finishing operations in the group as well as the clothing
manufacturing. A major part of the company’s success comes from a
strong commitment to design – they employ over 200 designers and
make extensive play of this commitment. It’s a theme which doesn’t
stop with the clothes themselves but also extends to the
presentation of the stores, their window displays, their
catalogues, Internet advertising and so on. Part of the
headquarters building in Arteixo La Coruna, Spain, contains 25
full-size shop windows with display platforms and lighting which
allow the team to see what real store windows would look like – not
only under normal conditions but also on rainy days, at night and
so on. Another key aspect of Zara’s success is the flexibility
which comes from having a very different model for manufacturing.
Around 2500 employees work directly in manufacturing operations –
but behind them is a much larger workforce spread across villages
and small communities in Spain and northern Portugal. Once the new
design has been approved the fabric is cut and then distributed to
this network of small workshops – and these represent an outsource
capability delivering a high degree of flexibility. Pre-cut pieces
and easy to follow instructions are given to workers in what is
still largely an informal economy – and their output then flows
back into the massive Zara distribution center like tributaries to
a fast-flowing river. (This is not a small operation – the center
has around 200 kilometers of moving rails on which the products
flow. Highly automated and with extensive in-line quality checking
the process transfers the incoming pieces into production lots
which are then allocated to a fleet of trucks for fast shipment,
mostly by air from the nearby airport at Santiago de Compostella.)
Needless to say, this places significant demands on a highly
flexible and innovative co-ordination system which Zara have
developed in-house. In this way, they make use of a model which
dates back hundreds of years (the idea of industrial districts and
clusters) but use twenty-first century technologies to make it work
to give them huge flexibility in both the volume and variety of the
things they make. Where competitors such as H&M and Gap must
start planning and producing their new lines three to five months
before goods finally make it to the stores, Zara manages the whole
process in less than three weeks! Their flexibility is also based
on rapid response and extensive use of information and
communication technologies. At the end of the day as the customers
leave their 950 stores around the world the sales staff use
wireless handsets to communicate inventory levels to the store
manager who then transmits this intelligence back to Spain as a
feed into the design order and distribution system. This gives an
up-to-the-minute idea of what is selling – and what isn’t – so the
stores can be highly responsive to customer preferences – which
colors ‘work’, which themes are popular, which designs aren’t
hitting the spot. But it’s not just following the market – Zara can
also push the game by making sure that no model is kept on sale for
more than four weeks – no matter how well it is selling. This has a
strong impact on their brand – they are very original and
design-led – but it puts even more pressure on their ability to be
agile in design and manufacture.
Question: You have been hired as a consultant to a small
clothing manufacturer who wants to emulate the success of Zara and
Benetton. She wants advice on an innovation strategy which takes
the key lessons from these successful firms. What would you

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