Asia’s Seismic Shift
With workers striking, wages rising, factory output decreasing and labor pools shrinking, the “world’s workshop” is undergoing unprecedented change and growing pains. How will this affect you? and on a multitude of levels.
~MICHELE BELL
“Pakistan ran out of cotton two months ago. People are stealing each other’s yarn at the factory level.”
~MARTY LOTT, SANMAR
Three Critical Issues that Face Us:
Labour Costs: Many had been hopeful that the issue of Labour peace would be resolved with the wage increases granted to workers throughout Asia during the fourth quarter of 2010. Unfortunately this was not the case. Instead I discovered increasingly militant groups of employees leading vocal protests daily both in Cambodia and Bangladesh (I know this for a fact a I was personally caught up in two separate protests). What should have been a resolution will now inevitably lead to further wage rate negotiations between the employees and the factories resulting in higher production costs.
Production & Raw Materials: The dramatic shortage of production capacity has been further impacted with unbelievable rate of factory closures in Asia, making it a “producers’ market” as far as establishing garment pricing (Supply vs. Demand). In addition to the production/supply issues, the industry is faced with unrelenting cost increases on raw materials. Cotton prices remain at all time highs with additional increases sure to come, with no relief in sight until 2012. The switch to polyester as an alternative price sensitive fabric was short lived and has now been dramatically impacted as well, leaving no choice but to watch raw material costs soar.
Price of Oil: That’s not a typo; this is a serious issue for all of us in regards to overall costs. The current increase in oil prices will impact the industry’s shipping costs negatively, especially when combined with the continued shortages in vessel capacity. Higher oil prices also affect the cost od synthetic fabric production on outerwear, polos, and even basic layering pieces.
~ GARRY HURVITZ
President & CEO
Ash City Worldwide
How can you prepare your self for future changes?
Have a backup plan Be prepared for back ordered and out of stock items.
Have a back up product ready to go.
“Good, Better, Best” To combat quality versus increasing prices, ask your sales representative to quote you 3 options of the same product to better understand price alternatives.
Keep Quotes Current
Because of inventory shortages and price increases it is a good idea to keep in mind the time between a quote and the point of purchase.
A stale dated quote may not be honored.
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Eye on Asia
Asia’s Seismic Shift
With workers striking, wages rising, factory output decreasing and labor pools shrinking, the “world’s workshop” is undergoing unprecedented change and growing pains. How will this affect you? and on a multitude of levels.
~MICHELE BELL
“Pakistan ran out of cotton two months ago. People are stealing each other’s yarn at the factory level.”
~MARTY LOTT, SANMAR
Three Critical Issues that Face Us:
~ GARRY HURVITZ
President & CEO
Ash City Worldwide
How can you prepare your self for future changes?
Be prepared for back ordered and out of stock items.
Have a back up product ready to go.
To combat quality versus increasing prices, ask your sales representative to quote you 3 options of the same product to better understand price alternatives.
Because of inventory shortages and price increases it is a good idea to keep in mind the time between a quote and the point of purchase.
A stale dated quote may not be honored.