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Roger that apparel11/8/2023 ![]() “So if we take an order we’ve got to deliver, even if that means we airfreight it ourselves.” Of the group’s eight value drivers, the top three are quality, on-time delivery and profitability. From a pure manufacturing point of view, that’s a day-to-day challenge we face.” The next challenge, of course, is that “now we’ve built up all the additional capacity, in the second half of 2018 we’d better get enough orders to fill that capacity…which then becomes a cyclical issue. “So why did we take so many orders? The fact is we asked customers to give us all their orders for a specific programme, and when you do that there’s no way to just say ‘no,’ because you’re their one and only supplier, they’re going very deep with you, partnering strategically, with more innovation.” We lost money during this period because it costs money to build additional capacity and add people, the training time is long, we had a lot of overhead costs, airfreight costs. “The second half of 2017 was much stronger than we expected, so we went from a comfortable capacity situation to a completely overbooked situation. “More customers are truly believing in our capability, giving us more control on what they buy.”īut there is a downside too, and Lee admits TAL recently became a victim of its own success when orders soared.Įven in dress shirts, “probably the most basic, stable category there is,” there’s constant demand for something new and different, be it seasonal patterns, different fabrications, different handfeels, and a wider range of fits, delivered on a weekly basis One consequence of these strengthening relationships is “huge” demand for TAL’s vendor managed inventory (VMI) system whereby it takes full responsibility for maintaining customer inventory levels, from generating purchase orders through to delivery. “They can only do that through a strong partnership with their suppliers…we have to do it together.” “They want us to give them a lot more innovation, a lot more options – so we have to be strong in that area.” Even in dress shirts, “probably the most basic, stable category there is,” there’s constant demand for something new and different, be it seasonal patterns, different fabrications, different handfeels, and a wider range of fits, delivered on a weekly basis. Brands have spent less money on training and the people working there are less knowledgeable about product they’re much better at marketing than ever before, but less on the technical product. Product development today isn’t what it used to be. “I believe that at our tier of brand they really have to have the right partner and that’s been neglected for many years. We’ve got more customers today than ever that have US$50m or more in business with us. Lee also reveals that once customers reach the tier of US$50m FOB and above, “that’s really meaningful to both sides. ![]() At our price point, brands have to provide a better product.” They realise that if you only compete on price and not on product, and don’t have a product roadmap, then you’re never going to win – unless you are at the bottom of the pyramid. The rationale, Lee explains, is that “the big brands, who are more strategic, are moving away from day-to-day pricing where they have suppliers compete against each other so they get the cheapest price. The company is also focused on working with fewer customers – partly at its own instigation, but also as retailers themselves consolidate their supply bases – “to capture more product from the same customers and be much more relevant to them.” “For us was a great opportunity to drive sales with the same customers but in multiple product categories.” ![]() We’ve got more customers today than ever that have US$50m or more in business with us” Once customers reach the tier of US$50m FOB and above, “that’s really meaningful to both sides.
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