Unit Three: The Secondary Level: The Producers of Apparel

unit three THE SECONDARY LEVEL:
THE PRODUCERS OF
APPAREL
2008 Fairchild Publications, Inc.
Everything you always wanted to know about
the product development process in the
apparel and fashion related industries
Key Concepts
• The major advantages and disadvantages of the contractor
system
• The six-stage process of developing and producing a line
• The major industry practices of licensing, private-label and
specification buying, offshore production, CAD/CAM use
of factors, and chargebacks
• Industry trends, such as brand extensions,
globalization,and industry cooperation
• The Quick Response movement and the mass
customization theory and their effects on the product
development chain
• The new SIC/NAICS codes and how manufacturers and
retailers can use them
chapter eight Product

Development
Product Development
• Product Development is the
teaming of market and trend
research, with the merchandising,
design, and technical processes
that develop a final product.
Product development is used by
both wholesale manufacturers
and retailers.
Chapter 8
Product Development 2008 Fairchild Publications, Inc. 3
Product Development
• What is a product line and who
develops it?
• Product development process
• Specializing by product
• Industry practices
• Advanced technologies and
strategies
• Industry trends
Chapter 8
What is a Product Line
and Who Develops It?
• Lines encompass the entire season’s production from
a manufacturer
• Lines are divided into groups linked by common
themes like color, fabric, or style
• Lines are used to describe moderate and popular priced
apparel, while collections describe an expensive line in
the U.S. or Europe
• Knock-offs are copies of expensive designs in a
cheaper fabric
• Anchors are designs reworked from a prior season
in a different color or fabric
Chapter 8
What is a Product Line
and Who Develops It?
• 4 to 6 lines are produced each year
–Spring
–Summer
–Transitional or fall I
–Fall or fall II
–Resort
–Holiday
• Merchandisers, designers and producers

execute to create the product
Chapter 8
Seasonal Lines
Chanel’s couture and

ready-to-wear (RTW)
for 2007 and 2008
Chapter 8
Role of Merchandisers
• Merchandisers have been described as the “glue” that
holds the whole product development process together.
• They are the link among the design staff production
facilities, and sales staff to successfully produce a line
for the “right customer”
•The 6 Rights of Merchandising Product

Development
1. The Right Merchandise
2. At the Right Price
3. At the Right Time
4. In the Right Place
5. In the Right Quantity
6. For the Right Customer
Chapter 8
Role of Designers
Designers are categorized into three types:
– High Fashion
• “Name” designers, i.e.,
Ralph Lauren
• They are responsible for
designs, fabric, texture, and
color
• May also be involved in the
development of production
model and promotion of the line
Chapter 8
Role of Designers
Stylists
– Takes name designer style and
adapts or changes from high fashion
– Comes in at late rise/early culmination
stage
– Usually not involved in production or
promotion
Freelance
– Shows sketches to various houses
– Once sketches are delivered they are
finished with their responsibility
Chapter 8
Role of the Producers
–The manufacturer does it all, from
buying fabric to cutting, sewing, selling,
and shipping finished garments
–The jobber handles the designing,
planning, cutting, selling and shipping,
but not the sewing
–The contractor does the reverse of the
jobber and only does the sewing
Chapter 8
Contract Manufacturing
Advantages Disadvantages
• Investment capital not • Responsibilities get
required confused
• Hiring and training issues • Other manufacturers
eliminated may get priority
• Capital savings due to no • Quality can be uneven
payroll
• Faster delivery during
peak times
• Unnecessary to keep
factory busy year round
Chapter 8
The Product Development Process
6 Steps
1. Plan line
2. Create design
concept
3. Develop
design
4. Plan
production
5. Produce
6. Distribute
Chapter 8
STAGE 1
• Planning a line
– Designers and merchandisers
research trends, colors, and fabrics
using forecasters
– Budgets are set and advertising
planned
Chapter 8
STAGE 2
• Create design concept
– Sketch and drape garments
– Select initial colors, initial fabrics
– Cost out the product
– Styles are judged on:
• Individual merit
• Suitability to the line as a whole
– Many designs are discarded here
Chapter 8
STAGE 3
• Develop design
– Develop all specifications needed to produce the design
and create a sample of the designs most likely to succeed
– Both costing and fabrication receive intense scrutiny
– CAD, computer aided design, gives designers freedom to
explore and manipulate designs easily and inexpensively
– Linked with CAM, computer aided manufacturing and
CIM, computer integrated manufacturing, information is
provided to supplier and retailers globally
Chapter 8
STAGE 4
• Plan production
– Examine and sharpen sourcing options
– Contract to purchase fabric and components
– Exact costing is developed
– Samples are made for shows where retailers
placed orders, determining successes and
failures
– Production contracts are often finalized as
garments are being shown to retailers
Chapter 8
STAGE 5
• Production
Cutting involves
– Grading, where sizes are made
– Markers, where patterns are laid out on paper
“markers”
– Spreaders, machines where material is carried
along a guide on either side of the cutting table
– Bundling, where sleeves, collars, fronts and back
pieces are tied together, often by hand
Chapter 8
• Sewing has been dramatically altered by
technology
• Single hand operation still exist, where one
person sews the entire garment
• This is usually for very high priced garments of
a limited quantity
• The majority of production occurs using
modular manufacturing systems, where cross
trained teams complete garments
Chapter 8
• Finishing requires various tasks to prep the garment
for the selling floor:
– Sewing labels in
– Adding buttons or buttonholes
– Washing to prevent shrinkage
– Wrinkle resistant processing
– Garment dyeing
• Inspection occurs along the way:
– Fabric, dye, cutting, sewing, fabric, thread, buttons,
snaps, zippers, hem tape, linings and shoulder
pads are all subject to quality assurance, or q.a.
Chapter 8
STAGE 6
• Distribution
• Distributing the line requires sales tickets and bar
codes to be added
• “Floor ready” procedures may include carton
labeling, shipping documents and other tasks
being performed to speed the movement to the
selling floor
• “Floor ready” also occurs during the finishing
stage
Chapter 8
Specializing by Product
• The industry is generally
divided into three main
categories based on gender,
age, size and by classification
– Women’s
– Men’s
– Children’s
Chapter 8
• Brands and labels can be classified
into 5 main categories:
1. National/designer brand
2. Private label
3. Retail store brand
4. All other brands
5. Nonbrands
Chapter 8
• National/designer brands or labels are owned by
a manufacturer who advertises nationally
• Private labels are owned by a retailer and found
only in their stores
• Retail store labels are used by chains as an
exclusive label on all items in their stores or
catalog
• All other brands not in the first three categories
are used by sports teams, cartoons, colleges,
cultural institutions
• Nonbrands - usually found in discount or off
prices stores
Chapter 8
Nordstrom uses
private designer
labels to convey
the store’s image I.N.C. sold by The retail store J.Crew
Macy’s is an uses its own label on
example of a merchandise sold in
private label the store and catalog
Chapter 8
Industry Practices
Manufacturers acting as retailers
•It affords control of presentation, service, space
and atmosphere, and increased profits
Ralph Lauren paved the way for other designers
•Department stores and specialty stores have
reacted against the trend
•Manufacturers’ outlets allow manufacturers to
dispose of poor sellers, overstocks, and seconds
and make more profit than selling to discounters
Chapter 8
Industry Practices
Licensing
•Royalties of 2 to 15 percent, greater exposure
and little investment make it an attractive
proposition for designers
•A potential drawback is the loss of some quality
control in manufacturing and exclusivity in the
eyes of the consumer
•Corporate licensing as exemplified by Nike’s
“swoosh” and Harley Davidson’s T-shirts, are
part of a rapidly growing segment of the
licensing market worth $15 billion
Chapter 8
Industry Practices
Private label and specification buying
– Private label manufacturers are
allowed to design product by the
retailer (Macy’s does this)
– Specification buying is when the
retailer tells manufacturer their
standards (J.C. Penney does this)
Chapter 8
Industry Practices
Offshore Production
• Offshore production is the practice of producing
goods out of the country or “offshore” to take
advantage of cheap labor in foreign markets
– 807 is when garments are designed, cut and
finished domestically with only sewing taking
place abroad
– Duty is paid only on the value added offshore
– NAFTA has substantially shifted offshore
production from China to Mexico
Chapter 8
Other Industry Practices
•Factors fund the deals by purchasing
accounts receivable or lending money
•Chargebacks are the retailer’s way of
financially penalizing the manufacturer
for late, incomplete, mistaken or wrong
ticketing issues on garments
•They are a contentious issue, with both
sides arguing the other is too inflexible in
their interpretation of the order agreement
Chapter 8
Advanced Technologies and Practices
• CAM, CIM, and CAD
all make use of
computers to aid in
the process of
manufacturing,
integrating or designing
• QR, or quick response, shortens the time from
raw materials to design to production to finished
product to consumer
– It requires manufacturers, suppliers, retailers and
customers to have closer associations to all parties
Chapter 8
• Barcodes make tracking easier and the 14
digit UPC (Uniform Product Code)
automatically identifies items scanned at cash
registers
• From push marketing where product was
“pushed” on customers to pull marketing,
where information about what consumers
want, bar codes keep information flowing
• Scanners promote the instantaneous capture
of accurate data and are integral in almost
every step of the production, inventory and
sales cycle
Chapter 8
• EDI, electronic data interchange, sets
standards for data transmittal that make
date migration possible across disparate
platforms
• Mass customization is the idea that
“individual” garments for people are
created at the pace and cost of mass
production
• Body scanning customizes patterns to fit
an individual’s body
Chapter 8
Intellift allows shoppers to get better fitting clothing, without

having to waste too much time in the dressing room.
Chapter 8
Industry Trends
Brand Extension
• Brand extension allows a company to use its
name to launch or modify products
• Fossil “extended” from watches to handbags
and belts
• Chanel and Schiaparelli paved the way for
clothing manufacturers to create fragrances
during the 20s and 30s
• Accessories, men's, women's, and, lately,
children's have seen brand extension
initiatives
Chapter 8
Industry Trends
Brand Extension
• Home furnishings, led by Bill Blass and followed
by Ralph Lauren, became popular in the 90’s
due to a downturn in women’s wear and growing
sales of home furnishings
• Price lines blur as designers move into different
price levels
– Donna Karan’s D.K. line sales do not suffer
from the lower priced DKNY line
• Eddie Bauer allied with Ford to sell over 700,000
select Eddie Bauer versions of Ford vehicles
Chapter 8
Industry Trends
• Industry co-operation is key to the future
• Producers, manufacturers, and retailers
must take advantage of the prevailing
technology to reduce costs
• 2 efforts to meet this goal include:
– VICS, the Voluntary Inter Industry
Communication Standards Committee,
who set standards for UPC
– ANSI, which is the standard for EDI,
directly effecting QR capacity
Chapter 8

Unit Three: The Secondary Level: The Producers of Apparel

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Unit Three: The Secondary Level: The Producers of Apparel

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unit three THE SECONDARY LEVEL:

chapter eight Product

• Merchandisers, designers and producers

Chanel’s couture and

•The 6 Rights of Merchandising Product

Intellift allows shoppers to get better fitting clothing, without

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