How Fashion Brands Source Overseas the Right Way

Speakers

Bret Schnitker, Emily Lane

Date:

May 12, 2026

Transcript:

Bret Schnitker  00:01

Sometimes those factories are struggling because they have failed to perform, and they're trying to buy business, and you end up getting less or inferior product. Or over the years, I've had this happen too. They bought business all sudden. They got better business. Your production got shifted. You had late production. Those could all be costly.

Emily Lane  00:32

Welcome to Clothing Coulture, a fashion industry podcast at the intersection of technology and innovation. I'm Emily Lane

Bret Schnitker  00:39

I'm Bret Schnitker. We speak with experts and disruptors who are moving the industry forward and discuss solutions to real industry challenges.

Emily Lane  00:48

Clothing Coulture is produced by Stars Design Group, a global design and production house with more than 30 years of experience.

Emily Lane  00:58

Welcome back to another episode of clothing Coulture, where we talk about the business, the craft and the culture behind what we wear. Today, we're diving into a topic apparel brands face sooner than later, manufacturing offshore. Why do brands do it? Why it actually works, and how to identify red flags and avoid common mistakes. Let's start at the very foundation of this conversation. Bret, why are we going offshore, as opposed to, you know,

Bret Schnitker  01:32

us keeping

Emily Lane  01:32

it close?

Bret Schnitker  01:33

Yeah, the reality is, is that America makes, I don't know, somewhere between six tenths and nine tenths of 1% of all production of apparel that comes into the US. Of that very fractional number, a lot of that is reserved and built for the US military. Under this very compliant act, there's actually two to three acts that the US government has that requires partial or full US manufacturing. And so the actual number for fashion brands is much, much smaller. Therefore the infrastructure is also much smaller. Recently there's also been additional pressure on that infrastructure where the US government isn't buying as much, and so that fragile infrastructure continues to collapse. Things like dying mills and cm centers and things like that. If they don't have production for a long period of time, they can't sustain themselves, and they close, right? So it continues to get smaller and smaller, more complex and more complex. So you have more limitations on fabrication, more limitations on technical needling. It's really an industry that's surviving mainly because of this whole requirement for apparel and things like that, for government institutions to be made. Without that, it would be really, really challenging, because one, it's super expensive. Labor cost in the US is super expensive. That labor cost that skilled workforce to make apparel is very, very small, and there's not a ton of people that are super anxious to get into that production and sit on a production line eight to 10 hours a day, and so that it really is not, it's not something that that that we see a big future for now, robotics and technology will change that space. This whole conversation about Shima sake installs whole garment knitting. A lot of new technologies are coming into place around the world, that is, that are replacing kind of humans in different tasks. And so perhaps in the next five to 10 years, some of that will change. You know, with respect to domestic manufacturing, but in the meantime, it's a challenging business

Emily Lane  04:07

skill sets overseas. So you know, one of the things that I think also drives this conversation is the fact that, unlike other industries, apparel hasn't seen the same rate of annual inflation like you know it, costs have incrementally gone up over the last several decades as compared to other goods. So people are always chasing to make product for the same, if not lesser, of a price. Yeah,

Bret Schnitker  04:37

every time we ask people, Hey, think about what you paid for a T shirt or a polo shirt or something in the 80s or 90s. If you're that old, I happen to be and it's not much different. Although even around the world, labor costs have gone through the roof. Raw materials costs have gone through the roof. You know, the industry has been besieged by 10. Tariffs today, which add taxation to the US consumer and increase costs, which put pressure on the entire supply chain. Now we have, you know, fuel costs going through the roof. Current situation. So it is a it is an industry that is constantly trying to figure out innovative ways to stay kind of competitive, knowing that the consumer still, still looks to this industry, the mass part of the industry, and says, Hey, we're we pay X amount for our goods. There have been success stories in our industry, jeans have moved to a luxury sector right for years, jeans were 49 and $59 and now, over the past number of years, there's jeans in the $200 range. Consumers are like, Okay, I'm there. And we've talked about on other episodes, that this kind of better business is growing, and that's good news for the industry. There have been a lot of research done talking about how the entire economy and infrastructure of industry could be supported simply by incremental increases throughout the chain of increases in costs and increases in MSRPs at the consumer level, and therefore there wouldn't be so much pressure on massive production that's filling landfills and everything else. So

Emily Lane  06:37

one of the things that we've talked about in the past is how this kind of manufacturing apparel manufacturing is often the first stage of industrialization for a country, and I think it's interesting, as you see countries grow up, the evolution in the types of products that they're making in apparel may shift as well. Is that right?

Bret Schnitker  06:57

Yes, I would say you definitely see apparel being kind of the beginning stages they you know before that, before apparel and industrialization, you have this kind of agrarian mindset that measures things in weeks, months and years. And with industrialization, you start measuring things in seconds, minutes and maybe ours, right? And so that requires a pretty big shift in mindset. So repetitive task processes, like Apparel does, in most cases, helps build that mindset and infrastructure within certain countries. It certainly doesn't pay that well. And so countries want to move to they move from there to appliances and hard goods, and they want to move from that once the infrastructure supports it, with steady electricity and all sorts of other things, to technology, because technology pays a lot more for those same or similar kind of systems, right? And the overall kind of benefits work, but apparel is still there leading the way, yeah, in a lot of it's

Emily Lane  08:11

kind of a moving target, in a way,

Bret Schnitker  08:14

globally,

Emily Lane  08:14

yeah, for sure, yeah. Which is leads to another conversation I want to have. You know, we've, we've often advised customers that not every country does everything well, and having diversification in your portfolio is really, really important. Can you provide a little insight as to why this is kind of, this ever moving target? And you know, why is it that the skill sets are so varied, country to country.

Bret Schnitker  08:43

Yeah.

Emily Lane  08:43

How do you navigate that?

Bret Schnitker  08:45

Well, understanding the countries pretty well and being in them. And we've kind of done that for over 30 years. I now am saying it

Emily Lane  08:53

first. I know you are saying 30

Bret Schnitker  08:58

being in about 70 countries, or over 70 countries in over 30 years, you really start understanding that infrastructure. And as long as you stay consistent with that education and involvement in those countries, you see those shifts. There are a few countries that do a lot real well, China being one of the big ones. And, you know, we talk about this shift in industrialization, you know, and they them wanting to move the benefits you have in countries, let's say like China, Indonesia, or China, India. And sometimes Indonesia is the mass population, right? There's a lot of people. And so even though a segment of those people are moving up the ladder for technologies and experiencing a better life, there's still a lot of people there that can manage the apparel business. And China has, and to some degree, India, for sure, has been investing in that apparel space China at one point. Wanted to abdicate and just do kind of the textile portion and lead the CM for others. But those countries are really proficient at a number of items, especially China. Like you can go to China for pretty much every category, and they do it really, really well when you when you have to shift, or you have to be nimble is when other forces exert themselves on an existing supply chain. So today we have political economic forces. We have socio economic forces that are saying, China bad. You know, we created that relationship with China because we didn't want to do it, and China said, Hey, we got the people. We'll do it, and we'll do it really well. And now there's this kind of broad, blanketed political kind of thing where they're like, hey, look, you know, you need to not produce in China. And it's like, well, then you start to develop challenges everywhere else, because China has still shipped a large

Emily Lane  10:58

majority of it right now you're trying to reach and

Bret Schnitker  11:01

now you're trying to reshuffle with growing demand and eliminating the largest supplier of goods, especially in our space on the planet, as a percentage level. And so that is working its way through that. But again, you have to look at countries from a full integrated supply system. And it's not just about cut and sew. It's about fabric. It's about dying, it's about trims, it's about hard goods. It's about all these different levels. And so when you're building a particular product, you have to look at the infrastructure behind the particular product you're building, if you're doing synthetics. Still, China is the number one place to do it. It's close to the mills that are producing the fabrics for the world in synthetic you can move offshore on cm, but there's lead time required and other logistics that are required. You know, you look at India. India India is slowly coming to the game in terms of these performance materials, but they were really known as a natural fiber nation, and slowly they're trying to catch up. The infrastructure isn't there, right? And if the infrastructure isn't there,

Emily Lane  12:13

it is incentivized, however, by the government,

Bret Schnitker  12:15

it is incentivized. It just takes time. And so when the core base infrastructure, like the fabric, or, you know, components of that, let's say performance fabrics. We're using that as an example. In this case, aren't there sewers don't know how to sew that fabric. It sews a little bit differently, so it kind of goes upstream in terms of the CM factories. So you want to be able to analyze each country, some some countries aren't built to manage small quantities. Well,

Emily Lane  12:45

right?

Bret Schnitker  12:45

Bangladesh is really built large production facilities. And if you don't walk into Bangladesh on a overall scale, wanting to produce 10s, if not hundreds of 1000s of units, Bangladesh is generally not the place for you. So understanding the strengths and weaknesses of each country, understanding how that's shifting, because governments, people, groups, labor costs, infrastructure, all sorts of things shift all the time, having your pulse on where you got to go, yeah, is really important.

Emily Lane  13:24

So this can be really daunting, trying to figure out where to go. How does somebody who is kind of realizing, in order to make the margins work for their product, that it's time to be looking at better manufacturing overseas. How does somebody go about really researching, finding the right partner, really aligning themselves? What are the questions they should be asking? How do they know they're they're working with the right team?

Bret Schnitker  13:55

Sure, I can tell you that our experience has been that the first steps are usually not Alibaba, because so many of these organizations that start jumping off overseas will use these kind of online portals and think that all factories are kind of built the same. Let's go price something and see what the individual online will come back with for proper research, understanding and integration for production offshore. It certainly requires a lot more steps. The first is understanding clearly who you're working with. The best way to do that is be in the country, tour the factory, understand the factory, understand its certifications, its strengths and weaknesses in production. Be in the factory for a while. As we travel factories over the many years, there are all these telltale signs that separate good factories from bad factories. Trees, and some of them are even subtle, like I remember one of the first things I was told by, you know, hell, I'm a salty old garmento now, but when I was very young, there was,

Emily Lane  15:10

you're not salty, you're not old,

Bret Schnitker  15:12

okay? But when I was much younger, there was this English technician that we had at our retail organization, and he told me something that stuck with me over the years. And he said, I can tell whether factory is good or bad before I even walk in the door by its sound, right? And I was like, okay, Guru, you know, tell me the answer. And he would reply and say, look good. Factories are made good, not only by management infrastructure, but by repetitive work and constant work. And if you walk into a factory and you hear this constant just sound

Emily Lane  15:49

over, yes,

Bret Schnitker  15:51

you know that those factors are moving through a lot of goods, and therefore, somewhat logical. People are placing a lot of goods. Factories are doing good. The factories are full. And so before he walks in the door, he hears that word. He feels pretty good if he walks into a medium or large factory. Here's this chunk, chunk, chunk, stop, chunk. It's kind of silent. It's broken. He knows before he walks in. He's like, Okay, this could be a problem. And I'll tell you,

Emily Lane  16:22

yes,

Bret Schnitker  16:23

in 1000s of factories I've been in in over 30 years of traveling to all these factories, I always apply that rule if I hear it, and I got to tell you, it's uncanny,

Emily Lane  16:35

yes,

Bret Schnitker  16:36

how accurate that could be. We went into a I remember one of our last trips, we went into a really beautiful factory. The owner had invested a lot of time and money. I don't think he invested as much time and money into the management. And as I looked at this beautiful place with manicured yards and this beautiful building, and I'm like, Okay, this is sounding good. And I got to the door and I heard that Telltale, weird sound. We walked in, and of course, that that whole visit was really problematic because quality was bad, spec was bad, needle was bad, it was it was just uncanny.

Emily Lane  17:12

Yeah, I think that the on site visits are critical, and having those teams overseas that can go check on these factories. Because businesses change, you know,

Bret Schnitker  17:24

and factories change, factories can become not so good, a fact, not so great, factories, and so constant awareness of these factories, you know, if you can't be there, have other organizations that are there, go through the checklist of certifications, make sure that they're socially compliant. Rap, bsci, better work scope. There's a long list of certification companies. Ask what client lists there are. Do your vetting to make sure there are independent inspection organizations that also can go on on your behalf. We have a global contract with Underwriter Laboratories. Ul, not only do they inspect production that's been done for organizations and fabric testing, et cetera, they can also go in and view a the capabilities of factory outside of social compliance. They can sit down and tell you that, hey, we've been in the factory. The production looks really good. They're following all the contracts, but then they can also tell you about how factories are looking good too. So I think there's a lot of ways to vet factories that are better than simply going online and doing research. We all fall into these kind of habits with technology, of thinking they're shortcuts. But I would say, when you're investing the dollars you are when it comes to production, these shortcuts don't always work out.

Emily Lane  18:51

I found it interesting when we've been touring facilities, how important the you know, really looking at all levels of the organization, not just the skill set, but the QC, QA, but even looking at things like, how's that first aid kit looking? Like we really look at all of those things and make that a part of the consideration, I found that just to be fascinating, like I normally, you know, based in the United States, wouldn't walk into a business and go let me look at your first aid kit to see if you're doing right by your people. I don't think we do it

Bret Schnitker  19:26

here. I know we have band aids, but well in a factory setting, those are some of the telltale signs about social compliance and care for workers. Workers are around sharp objects, right? You've got cutters on a table with sharp band blades. You've got stars with sharp needles. Injuries do happen, and there are, there are setups within the workplace to make sure that if an injury happens, that they can be taken care of quickly. But you're right. We are very comprehensive. It's past that sound. I probably went too long. In that story about the sound, but we do spend a lot of time in the factory, and, you know, new factories and existing factories to make sure they're up to spade speed. But these processes internally about random pulling random samples from a production line, even a good sewer has bad days, going to the QC stations and making sure that those supervisors that are we call in line supervisors, or workstation QC station or supervisors, are actually going through and measuring a correct sample lot we will pull what we in our industry call tech packs that provide all of the relevant styling details, needling details and specifications. We'll go through and measure a number of these items. We'll inspect the quality of the needle. And you know, there's no getting around something that's in the middle of production, and if all of a sudden there's issues with spec or needle or things like that, even factories that look good. That's another step to ensure that that they're truly caring about the nuance and the detail of the production that comes through their production lines.

Emily Lane  21:10

We talked about how one of the key motivations of many manufacturing overseas is price driven. There are times when we've had customers reach out and say, hey, you know, we were quoted this price for this product, and it's been like, ooh, that is a dangerously low price. So what are kind of some red flags and telltale signs that maybe your price is too low and you should not go there?

Bret Schnitker  21:33

Yeah, I would say that's a that's a pretty nuanced kind of conversation and requires, I think, some experience to get that the big warning signs are sometimes geographic and low price. You know, we had a specific customer that we were talking with on some outerwear at one point, and the geographic location was in China, very, very close to the North Korean border. And knowing the experience about what fabric costs are and what prevailing costs are for labor and the complexity of the garments, you know, we had quoted some pricing, and they came back and said, Hey, we're getting this pricing and and the pricing was, I don't know, 20, 20% cheaper than what we were quoting. And, hey, look, we have margins. Every company has margins on in the world, but we've been competitive as as a company. We have been competitive with other organizations, even direct factories. And so that that that raised a little bit of awareness flag for me. And when I started to do the analysis, I started asking questions. I said, How often do you go to the factory? How recently, you know, how recently have you been to the factory? Have you been to the fact? Yeah, the answer, or the first the last question was, yes, we've been to the factory. How recently? Was a little more nebulous and gray, because what ultimately happened, literally, a day after we left that meeting, was front page news. This particular company's actual product was being made in North Korea, transshipped across the border with North Korea, North Korean slave labor. That's not something you want to normally happen. You know, everyone says good any press is good press. But I would tell you that, yeah, and so there are, there are a number of times that a great price initially is something that raises. You're like, hey, that's great, you know, because you're thinking, Man, I got a lot of profit, but if the factory isn't backing it up with social compliances and good needle and good quality, and there's some question marks in that sometimes factories will just fill space because they're desperate, because they had issues. Yeah, programs or orders. So you can sometimes get beneficial, and sometimes those factors are good, and you just get a good rate. Sometimes those factories are struggling because they have failed to perform, and they're trying to buy business, and you end up getting less or inferior product. Or over the years, I've had this happen too. They bought business. All of a sudden. They got better business. Your production got shifted. You had late production. Those can all be costly. That cost from the factory must come with quality guarantees, delivery guarantees, because if the quality isn't good,

Emily Lane  24:46

then

Bret Schnitker  24:46

those defect levels that pass through to the customer and things that you have to do on discounts that FOB goes away really fast. Your profit margins erode real quickly. Or if your production gets delayed by a month. Or two months or whatever, you miss seasons, and you miss a lot of retail dollars. So, so there are these warning flags about those, but they are somewhat nuanced. But if a price seems too good to be true, sometimes it is.

Emily Lane  25:15

Yeah, absolutely. I think something that I've seen with newer people in the industry is they're, you know, starting to dip their toes in working with overseas manufacturing, and then they're looking at cost. But they're not, we're actually looking at the whole cost. Help, help our audience understand the differences between DDB and FOB.

Bret Schnitker  25:37

Sure, these these abbreviations are what we call Incoterms, and they're kind of international terms that define different things. FOB is an abbreviation for free on board and that that's really a destination abbreviation, saying Where does the ownership hand over in a relationship between a factory and a consumer, that FOB can really be anywhere. It can be at the factory, right? X works is what we call that. It could be FOB foreign port, the port of the factory nearest to the factory, right, they'll deliver the goods domestically, to the port, to your freight forwarder. And therefore the fob will be wherever the ownership changes hands. You could have fob in the US. There's all sorts of things. FOB is kind of a point of destination where the goods transfer ownership, DDP delivery duty paid references that the goods that the shipper is responsible for, all of the related costs of the product, the insurance, the broker, the import, the freight, all the miscellaneous to get it from the factory through the factory, from the factory to the to wherever you're shipping. It, US, Europe, international, wherever. And cleared,

Emily Lane  27:20

oh, okay,

Bret Schnitker  27:21

at the port,

Emily Lane  27:22

got it

Bret Schnitker  27:23

delivery duty paid so that DDP would simply mean we've cleared it. Other terms kick in on where it could be, DDP, warehouse, customers, warehouse, and then we would be the individual that quoted DDP warehouse would be responsible for all those things we discussed, plus the inland delivery to the customer's warehouse.

Emily Lane  27:46

There's a lot of steps in here.

Bret Schnitker  27:47

Yeah.

Emily Lane  27:48

What's the typical timeline from Okay, I'm ready to get moving,

Bret Schnitker  27:53

ready to get moving

Emily Lane  27:55

on this order, my production, my collection,

Bret Schnitker  27:57

so you have your tech back in place, or I'm just got a concept,

Emily Lane  28:01

I'm to say, by the time the PO is done, like I'm making my order, how soon will I get my goods?

Bret Schnitker  28:08

The general rule of thumb worldwide, everyone talks about speed to production and fast turnaround times. And there's so much that goes on behind the scenes to speed production up for these companies that have faster action times? Well, it's high volume. It's planned fabric and planned production. Zara is known for 75 day or 45 day turnaround times. In some cases, that doesn't they don't just walk up to someone's door and say, I need 45 days. There's a lot of things that go in place to speed that along. But on traditional production, it's it. There is this kind of norm in the industry that lays things out between 90 and 120 days. That's that's a good window of my PO is written to the time that it's done at the factory.

Emily Lane  28:57

Okay, then you still have to plan transit time.

Bret Schnitker  29:00

There are a couple things you have to trip plan. If you have external inspections, which we always recommend, you have to plan for the inspector to come in, inspect the shipment, approve that, provide that report. You have domestic transport from the factory to the port. You have cooling time, which is generally 24 to 48 hours at the port, in a bonded warehouse. That's sort of a security procedure. You know, if there's terrorism or things in a shipment, they put it in a secure warehouse to let it sit there to make sure everything's okay before it goes on to a multi billion dollar vessel. Yeah,

Emily Lane  29:35

and

Bret Schnitker  29:36

then there's a loading time, it goes on the vessel, then there's a sailing time, then there's an entry port time. Then there is a customs clearance. You pay your duties and customs clears it. Then there's a transit from the customs warehouse to delivery house. Then there is a pickup for a trucker. Time. Time, you know do, then there's an inland transit and there's a drop off.

Emily Lane  30:05

Gosh, your clothes go through so much, just in the handling through trans trans transportation. It's kind of amazing. Now, if you really look at the whole picture, from fiber forward, the amount of hands that are in a garment is just truly astounding,

Bret Schnitker  30:22

especially fiber forward. I mean, when you go fiber forward, there are so many,

Emily Lane  30:27

so

Bret Schnitker  30:28

many hands. As you really break it down, you analyze it, you're like, You're amazed, because we've gone from fiber forward in terms of conversation. You're just amazed how this stuff actually gets built.

Emily Lane  30:39

Gosh, you know, when you really put the numbers to it, it is like, I'm, I'm kind of amazed I can buy a pair of jeans for a couple $100 like, knowing that, like all these resources, time, energy, care, systems, men, you know, technologies and all, all of it. It's pretty astounding. So what are some common mistakes that people make as they're getting into the space of sourcing offshore?

Bret Schnitker  31:11

There's a number of them. And we've had those conversations with people like, Hey, I went to Alibaba, and I told them, I want to short

Emily Lane  31:19

Yes. I gave them this photo. They said they could do it.

Bret Schnitker  31:21

Yes,

Emily Lane  31:21

yeah.

Bret Schnitker  31:22

And you just kind of look at that whole situation dumbfounded, because the next question you ask is, Well, did you give them a tech pack? And they're like, what's a tech pack? And it's like, well, it's a blueprint for production. It lays out all of the parameters on how you want that short made. And they're like, Well, what the hell is that they're experts. They know how to make it. And I'm like, Well, you have expert contractors that build a house. Do you just go tell them to build a house?

Emily Lane  31:49

Yes,

Bret Schnitker  31:49

a house is a house. A short is a short. And then that kind of puts things into perspective for them. But the common mistake is making sure that you have the correct tech pack that outlines all of the requirements that you want for the particular garment and a tech pack should be comprehensive, comprehensive, like a blueprint, right? Right? Because you're guiding your nuance a short is not a short, right? There's all sorts of nuances in fashion and spec and color and

Emily Lane  32:18

gradation

Bret Schnitker  32:19

and quality and grading and, I mean, trims,

Emily Lane  32:22

everything, yes, your tolerances, all of that.

Bret Schnitker  32:25

So not having a tech pack is a terrible mistake, but having a tech pack that isn't really built well is also a challenging mistake. Choosing, we talked about this already, choosing the cheapest option, just

Emily Lane  32:39

right?

Bret Schnitker  32:39

You know, you put it on a spreadsheet, the cheapest guy you go with, and you don't really look at all the nuances between all the product. Sometimes, all this product is laid out, and the person chooses the cheapest price, and they're all quoting different things because your tech pack isn't detailed enough. They're using different fabric qualities from different manufacturing places, or the factory qualities are different. So just going solely on price alone to make your decisions a challenging detail, and then so many people look at an FOB foreign This is my factory price. They're giving me a quote. Sometimes that's even an Ex Works price means the factory is complete. You got to go take care of the rest the ownership changes hands at the factory, and they don't understand

Emily Lane  33:33

there's additional

Bret Schnitker  33:34

inland freight broker charges, tariffs, duties, overseas, ocean freight or air courier costs, import costs. They have no idea that all that happens, and that happens a lot, and it's most painful for these smaller organizations, because they see one price and they think, oh, that's the price I'm paying. They calculate the profit margin on that, and sometimes the price can be double by the time you land it, because the units are small and you're shipping it by air. And I mean, those are things to be important, not really looking at quality control processes, setting up unrealistic timelines. I think that's important. If you're like, Man, I'm just going to push, push, push. It just doesn't happen. And that can create complexities and frustration when you're planning a launch, you know, for your product. And then lack of contracts and written agreements. Look, purchase orders are contracts. And so defining, putting a lot of definitions and purchase orders sometimes makes sense. Start ship date, cancel date. A lot of people will just put a date that they expect the factory to be done. Production is a little more organic than that, and so it's always good to have about a two week one. Window to say, Hey, I'm good if you ship two weeks earlier, and then here's my cancel date. What that does is set expectations. You might have some flexibility on your side if the factory is five or 10 days later than that because of some approval or something that didn't happen on time. But the contract itself provides you a bit of definition to the factory on your expectation for that contract sets expectations for quality, right, right? We within UL have a global contract, and we set an AQL level, and that's a completely different detailed conversation, but we set an AQ, a level of 2.5 4.0 which is an associated quality level that sits down and independent teams will go and inspect product for what we call criticals, majors and minors, right? And there's only a certain amount of allowances, not all. There is no production. That's

Emily Lane  35:57

right. I think that's a common mistake. I mean, the truth of it is, manufacturing still has a lot of humans involved, and humans aren't perfect. So having an understanding that there's, you might get a garment that has a little string, you know, that hasn't been trimmed, and things of that nature, now that AQL level that you're talking about is very strict. So it's that, like we implement, which

Bret Schnitker  36:23

the reality is, is that if you want to find a problem with a particular garment, generally, you can

Emily Lane  36:29

the

Bret Schnitker  36:30

question is, is what's commercially acceptable? That's really the what

Emily Lane  36:34

would an expert recognize versus a consumer recognize, right? And

Bret Schnitker  36:38

that's, that's that kind of critical and major column. Criticals are not, don't have a big, long list. A simple one is something that would be harmful to the body. If you have kids or infant wear and you have a needle in there, that's a critical. The entire shipments immediately rejected or re inspected. Majors are

Emily Lane  36:57

just say something,

Bret Schnitker  36:58

yeah.

Emily Lane  36:58

So this kind of goes on the factory vetting side. We've seen in the factories that we've toured, these needle detectors, like every garment goes through, which I think is really

Bret Schnitker  37:11

and people are like, when they think about that, they think, Oh, those little pins that put garments together. Well, that doesn't happen anymore. What they don't understand is that sewing machine needles break. And so in addition to needle detectors, we also inspect the broken needle log. And so when a needle breaks on a sewing machine, they're supposed to take both sides of that broken needle, tape it into a book and put a date on when that needle broke, so that they know that they've captured both sides that needle it's not getting stuck in a garment. I really

Emily Lane  37:40

appreciated seeing that. I've also appreciated seeing those huge boards where they have like, not only, you know, sewer output and those kinds of things, but if there's been a QC, QA challenge, what's the challenge been? And then even things like oil stains,

Bret Schnitker  37:55

sure,

Emily Lane  37:56

you know, if the machine isn't being cared properly, I love seeing all of that document,

Bret Schnitker  38:00

yeah, and those, again, these, you know, we talked about criticals, but majors are things that the average consumer would look at a garment and not buy it or return it for whatever happens. And so that's like open holes, unless you intentionally want to grind an open hole in a jean or something. And then miners are things that are very nuanced, that industry professionals would think it could be better, but the average consumer would never really see it, see it. And so there are levels within all of that production, and the key is commercial acceptability. If you're going down the garment business, you have to realize each industry has its own set levels. You know the garment business has to be the most flexible, because fabrics are organic. You're dealing with a specific workforce and and there has to be this understanding that that's kind of built into the system. When you go on the very far end on technology, micro millimeters of air effect results in technology. So those factories are set up on a totally different level, or automated to a totally different level. So you can't really be looking at a garment from a technology

Emily Lane  39:29

right

Bret Schnitker  39:29

perspective. It just doesn't work.

Emily Lane  39:31

Yeah, having a good understanding of mOqs is really helpful too, because every factory has kind of different capabilities. Some factories and countries you know, like you were talking with Bangladesh, higher quantities. Vietnam, higher quantities. Some other factories are maybe have more flexibility on mlq. So having an awareness of that's very valuable. Yeah.

Bret Schnitker  39:53

I mean, that's a big decision where people are producing in the US, because they're buying smaller quantities they can reach. React to size and style with existing fabric and domestic factories, but they're paying a price for that, right? But when they make that decision to go offshore, there are these kind of things to really think about when you're when you're talking about jumping offshore, and mOqs are a big one, and mOqs are really broken out into two distinct categories, fabric mOqs, because there are limitations on fabric that exist. And it comes down to not specifically the knitting time on a specific machine or a weaving machine to create a fabric. But limitations occur a lot of times in dying.

Emily Lane  40:44

Yeah, I think what people don't understand is these tanks are huge, like, if you're watching our video, just the space behind us could be filled by one of these tanks.

Bret Schnitker  40:55

They're about 1000 the average tanks are about 1000 kg dying tanks, these factories, dying factories, are built for volume. It doesn't make sense to have really small tanks, but there are smaller tanks. There's even tanks that I think go down to 40 kgs or something, but they're sample dying tanks, and there's all sorts of inefficiency built into them, and you don't get as stable of a dye product as you would with the larger machines. And so most of those larger machines are utilized for production, and if you're not filling the kg tanks, then a lot of that dye stuff goes to waste. And those mills work. The dyeing Mills work on such tight margins, they really don't like taking orders that don't fill those machines, sure. So there are these kind of limitations by fabrication. And so understanding that cotton per color minimums are really should be at 1000 units per color at a minimum, they're kind of begrudgingly do that. If you do below that, 500 units, 750 or less than that, there are massive premiums in surcharges, because they're going to load in the same cost as they would for 1000 into those smaller quantities, because

Emily Lane  42:09

the resource is still needed.

Bret Schnitker  42:11

Resources still needed.

Emily Lane  42:12

And

Bret Schnitker  42:12

then when you move into synthetics, that number gets higher, because in polys and nylons, it requires pressurized tanks, because they're not hydrophilic. They you know, cotton absorbs water. So the typical cotton dying process is it just kind of this fabric just tumbles around, and over eight hours, absorbs the dye, poly and nylon. You have to force the color into it. And so it's a much more complicated process, and the disturbs are more complicated. So color per polyester, if you really want to hit mill minimums, depending on consumption, can be upwards of 1200 units to 2000 units per color. And on nylons, 3000 units per color is really a minimum, typically, and anything that you buy less than that, you're going to get some pretty substantial surcharges from dying. And then the other MOQ that you deal with is factory mo right? A lot of people don't understand line systems. And how many people are right? And how many people are involved? At the beginning you have you have planners in the room setting up paper patterns. Then it goes to the cutting stations. Goes to marking and bundling stations, sometimes on certain products that require things to go through, fusibles, all those things get bundled. And then it goes onto a line of 18 to 40 some people,

Emily Lane  43:39

all of which have been trained on that program prior to it going in.

Bret Schnitker  43:42

There's

Emily Lane  43:43

so much prep work.

Bret Schnitker  43:44

And then, as those lines go, that's why Henry Ford was famous for building these line systems. It's super efficient, right? They want to be efficient. They move through real quickly. And so some of these, depending on the complexity of their product, T shirts, you can do over 1000 units per line. Some of the more complicated items you might be doing 300 to 500 units per line per day, right? And so if you're only buying 500 units, they have to set the line up and train them. They run it for a single day, then they have to tear it down and retrain for a new one. So there's a lot

Emily Lane  44:21

of lost time there

Bret Schnitker  44:22

lost time. And so if people kind of want to understand why some prices for some people are cheaper than others, why big production units that are buying hundreds of 1000 units get a better deal, it's because they set that line up and they run that line for 30 days, and so the efficiencies go through the roof, and factories are happy to run things for a long time.

Emily Lane  44:49

That's right, we do have a wonderful download that identifies kind of the key strengths and weaknesses of various key countries of production. I. And we're happy to make sure that access to that is available in our show notes. It is goes through much of what we talked about today, and even more. And of course, we're here at stars design group to help you navigate this very complicated world of apparel design and manufacturing. If we can be a resource, don't hesitate to reach out. Thank you for joining us today, and don't forget to subscribe to stay apprised of upcoming conversations.

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How Fashion Brands Source Overseas the Right Way