Many apparel companies, both retail and brands, are facing diving profits and rising costs. There is no doubt that the dramatically and quickly changing retail landscape is responsible for the bulk of this problem. But, given the way things are, how do you position yourself for survival and future growth (once you figure out how) if you can’t get out of your own way?
Whether your business is rising or falling, your philosophy should be “think big, be small.” But small does not mean ruthlessly dump people who have helped you succeed. It means to reorganize and refocus the way you do everything. It means to ruthlessly examine your process to discover duplication, overkill and processes that are, simply, not necessary or don’t add value.
Here’s an example so you can see what I am saying. Recently, I managed the entire overseas process from product development to shipment for a startup company that grew in exports from zero to a projected $10 million in 3 years. Here’s what is important about this: I did this with only myself and one more very, very productive person.
This is in the past tense because this company was bought over by another company (growth and ability to get orders ran away from the ability to finance those orders) who had no use for our business model. In the future, it will take many more people and thousands more emails and meetings to accomplish what we two did.
During the transition process, it became very clear to me how we managed so much with so little. Here are some key points:
1. Most important- IF you hire people who are smart, have a great work ethic (say: do the job right, don’t finish until it’s done as opposed to get through the day) and can handle a large volume of work without mistakes, you have just added value and reduced cost- even if you have to pay more to hire and retain those staff. Companies, especially in China, can be notoriously stupid by setting the lowest possible value on compensation for a position. Well, you get what you pay for.
2. Empower people to make decisions at the lowest possible level. IF your company is organized like Kafka’s Castle, where every decision has to run all the way up the flagpole, not only will you waste cost and time (time is money), but you will tend to hire people who are not willing or able to make decisions on their own. Even if you mistakenly hire someone capable, you will waste their talent and discourage them in such an environment-if they don’t quit. BUT, if you hire the right people, you can give them as much responsibility as it makes sense to handle.
3. Don’t overthink the process-be realistic about what is necessary and what is not. Keep it simple. For example: many companies insist on doing inline inspection for all orders, new or repeat. Why? IF you have a good factory in the first place and you have trained them well, they will take responsibility for producing a product that meets quality expectations. And if they don’t, they will be responsible. This thought will get their attention and they will take care. Most important-let’s calculate the money spent on inline inspection of repeat orders versus the money saved by maybe catching a critical error. Simple math. It is not worth it.
4. Keep your paperwork and reports simple but assiduous. PLM and other systems are suitable for keeping records of thousands of styles, but they don’t work if the time required for inputs is more than the value of a simple spreadsheet. So many companies waste so much time with IT that takes dozens of hands, where it could be vastly simplified. Let’s take the PSR (Production Status Report) as an example. The amount of time it takes to input small details for every styles is usually a total waste of time. If the cutting date is one or two days later, does that mean the order will be late? This can be managed much more simply by a. letting the factory take responsibility for the delivery date if they accept and holding them accountable to let you know any changes that would affect that date; and b. keeping track of the process step by step (PP samples, fabric approvals, etc.) and updating delivery where delays from the given date (given by factory) occur. 95% of the time (at least) if no delays occur in the critical processes, the factory knows how (again, factory choice is key here) to ship an order when required. The bottom line here is that the time and attention required for producing and reviewing these reports is significantly higher than the time required to deal with the issues when they do arise. And, trust me, most of those issues will not appear on a PSR report.
What is required, which I understand is difficult for larger companies that have been mired in this overkill forever, is to totally overhaul, first your way of thinking about the business and how it is done. Do- what works and adds value. Don’t do- what does not get the results needed compared to what time and cost it takes to do it. MOST IMPORTANT- you need the right people, even if they cost more, to get this done.
I have found that, without exception, companies hire people in their own image. So clearly the above requires a complete brainwashing on the part of management to become those who are committed to getting things done in the most cost-effective way. OR a replacement of executives and managers who can’t or won’t commit themselves. No need to be scared of this if you have the right boots on the ground to execute.