Professional Adjustments

Circumstances change over both the long term and short term. And you’ve got to be aware of both to stay on top or ahead of your game.

Even if you have great golf swing like Tiger Woods, analysis of the wind direction and speed just before the shot to the green is critical. No matter that you have practiced for hours or have just chosen your club. A keen sense of awareness as to changes in the environmental circumstances can affect your performance. Allow yourself to first accept changes and then have the courage and faith to change your decision or direction based on the new data.

Sports figures do this publicly all the time. In watching a recent Phillies game, the announcers pointed out the parameters of the strike zone according to the home plate umpire. He was calling strikes on the lower outside corner. Whether you agreed or not, that was the strike zone for that night. Batters who did not make the adjustment could be called out. Fortunately, the umpire called that pitch consistently for all batters on both teams.

As business people, we all can appreciate a predictable environment. At least some of the variables remain independent. Like it or not the batters had to go with the flow. The problem is that people don’t like to change as it is inconvenient, annoying and even frightening in some instances.

But not changing when appropriate can have far more devastating effects. Think back on mistakes you have made and the attendant costs. What could you have done differently that would have cost less money in the long run if you had known then what you know now?

If mistakes have cost you lost opportunities, then learn from them and make the adjustments so you don’t get trapped paying the same price twice. Factor in the adjustments that need to be made.

Have trade law changes affected your business? They have changed mine for the better in a couple significant ways. First, with the Cumulation Treaty between the Dominican Republic (DR) and Mexico, we are able to use Mexican wool or poly wool fabric, cut in the DR and ship into the USA duty free. Since there is a lack of this fabric of USA origin, we are able to compete against the Far East by taking advantage of the speed to market and shorter turn time to replenish inventories.

We have also expanded to produce in Haiti because the HOPE Treaty allows use of fabric from anywhere in the world, when sewn in Haiti and imported to the USA, you pay no duty. Again the duty savings can be upwards of 28% which is a significant amount to take a competitive advantage. Yes, you need to do some work on the logistics of the supply chain. You may need to change your travel plans or vendors but the effort is worthwhile.

In the apparel manufacturing business, there’s always been the conflict between being market and manufacturing driven. Arguments for efficient manufacturing resulting in lower costs and reliable quality fought against the sales department who preached making the products the customers demanded with the required delivery. Not long after you set your factories to respond to the current sales demand, the changes occur in fabrics, styles, technology, trade laws, and supply of available raw materials. The market will always be right because without customer demand, there is no business.

What can be done? Ask again what business you are in, or better, what business should you be in? The strategy you chose years ago may have made perfect sense then but things change. Here’s a case in point:

I started sourcing in the Caribbean Basin about twenty-three years ago. Up until the mid-1980’s our sourcing was solely done in the USA. There were abundant factories in many states and aside from some deep Southern accents, we all spoke one language. Life was good. Manufacturing had been migrating from the industrialized North to non-union shops in the South.

Then competition for our labor force emerged. There was a lack of immigrants attracted to be sewing machine operators and the home born work force was being wooed to jobs in health care, technology and fast food. Who can blame them? Sewing all day is tough work. So I took the next jumping off point from the US and started sourcing in Latin America. There was plenty of willing labor available at low wage rates. But there was a lack of cutting capability, trim supply, pattern and marker making. So I began to develop in house these competencies, which my customers used to provide. The contract factories in Latin America, by and large, were not nearly as sophisticated as the established factories in the USA, and understandably so. The experience level was a function of the demands of their local markets. So I had to become more manufacturing driven to assure quality and delivery.

Over time, the factories that remain in this hemisphere have become more sophisticated. They can be more marketing driven because experience and technology has allowed them to produce shorter runs of various styles and fabrics. And still they can be competitive if the supply chain is managed effectively. More collaboration is needed with customers to schedule orders and have the correct raw materials on hand in the proper time frame. And we still have the huge advantage of speed to market due to our physical proximity to the US market. One or two more turns in inventory per year become quite attractive even if a slightly higher price is paid in this hemisphere compared to the Far East.

In addition, since Greco Apparel is a virtual sourcing company, our product offerings have expanded beyond apparel as we produce men’s, women’s and children’s products from knit polo shirts through Class A tailored uniforms to include footwear, headwear and accessories. And we have expanded our sourcing to eight countries from the US to the Caribbean to the Far East.

If you asked me a few years ago if I could have done this I could not imagine such a thing. But demands of the market, coupled with increased vendor capabilities, have permitted access to servicing broad demands. The toughest thing to open was my mind. If Tiger can make last minute adjustments based on his environment, you and I can also.