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January 17, 2018 Leave a comment




How Big Will On-Demand Manufacturing Actually be For Apparel Sourcing?

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Photo credit: Ziel

The apparel industry is inching closer to custom-made clothing with each technological advancement and increasingly taxing consumer demand. And though on-demand manufacturing won’t remedy all of the apparel industry’s speed to market ills, it stands to serve considerable purpose in automating the processes and products best suited to it.

The win with on-demand is two-fold: the customer gets exactly what they want, and the brand only has to make exactly what they want. That means little waste, no excess inventory and no accounts receivable risk.

“Companies are losing money because of inefficient supply chain processes and the consumer is changing its behavior,” said Marleen Vogelaar, founder and CEO of Ziel, an on-demand manufacturing company making private label activewear product. It’s retail as a service for smaller and midsize brands, as Vogelaar puts it.

Massive minimum order quantities lead brands to buy beyond what they need in order to make a sale. But that leads to excess inventory, which leads to markdowns, which leads to brand dilution. And no brand can really afford that.

The apparel industry is moving to smaller orders more often, and making closer to the customer for quicker deliveries—and that’s prime space for on-demand manufacturing to move in.

“What we see happening…is we see hyper-local offerings from flagship stores, we see testing of colors, we see buying 20 percent less than Asia so our clients can have a higher sell-through and we can supply them with the right color and quantity when it’s needed,” Vogelaar said speaking during a panel on innovations in technology at the Sourcing Journal Summit.

Adding to that, she said, “And the great thing about on-demand manufacturing and some of the things that’s changing in the market, is you have to meet where the consumer actually is. And that consumer hangs out online, they hang out on Instagram, on the mobile phone, they hang out at concerts and fitness things. You have to meet them where they are in the moment and not just in a store. And buy going on demand you can connect that.”

According to Vogelaar, roughly 20 percent of apparel that’s currently being made could be done with on-demand.

XRC Labs, a consumer goods and retail accelerator focused on finding and helping fund the future movers in the space, invested in Ziel because it believes in the model. A model, XRC Labs founder and managing director Pano Anthos likens to Starbucks.

“We look at the Starbucks model for coffee and Starbucks does not command 100 percent of all coffee sales, right? But when you go into a Starbucks, you get whatever Starbucks coffee you want at a ridiculous margin,” Anthos said. “Who else has turned a commodity into a $5 liquid, literally? But it’s because you get what you want, it’s a language that you understand, and it’s on demand.”

How on-demand works at Ziel

At Ziel, on-demand orders are fulfilled in quick rotation, with no minimum order quantities and with a lead time under 10 days. In another four years, Vogelaar said that 10 days will shrink down to two.

“If you look at how long it really takes to make a garment…let’s say five hours to give it really, really a lot of time,” she said. “But what you see with most of these processes if you analyze the supply chain on average, most of the time things are in rest.”

Ziel doesn’t have to leave things lingering and eating up precious speed to market. The company receives orders and sends them out to their production partners on a daily basis. And if all of a sudden production orders were being sent to production on an hourly basis, that change in speed to market would be radical.

On-demand manufacturing will mean a shorter, more local supply chain, and it will mean cutting costs too.

“The fundamental issue with on-demand in all of these concepts is labor. The U.S. doesn’t have enough seamstresses, they cost too much, and so we have to go to China to make this or Asia, or something like that,” said Pete Santora, chief commercial officer for Softwear Automation, purveyor of the sewbots Adidas has enlisted to make 800,000 T-shirts a day in its humanless Arkansas factory, starting next year. It’s labor costs that have driven companies to source in far reaching corners of the world, with executives racking up airline miles and hotel loyalty points to visit their suppliers.

But Ziel doesn’t have to stretch across the world to produce its product.

“The most important thing is that we bring the cutting and the dying in house with the sewing. In order to do that we will need to have a few different factories over the U.S.,” Vogelaar said. “Then you make it in the U.S…and then you can start giving people a stable margin and quicker rotation.”

Where on-demand will work best

On-demand, according to Vogelaar, will be best for smaller companies that don’t have the skill or the scale, but also for bigger brands that don’t yet know how to get out of their own way.

“Even for larger brands who are very well known, they want to have hyper local store offerings, they want to be able to test products before they do a lot of things, they want to do collaborations with artists and influencers…but they have supply chains that take eight to 10 months and they can’t do that,” she said. “For things with shorter shelf life and things with higher emotional value for the consumer, and where the collections are smaller, on-demand starts becoming an opportunity.”

And when it comes to speed in the supply chain, 10 days can hardly yet be beat.

“From a customer perspective it’s slow, but as a brand to get something in 10 days from a vendor, it’s really great,” Vogelaar said. “We have to move toward fulfilling the consumer expectations there and it’s possible because the technology is not that complicated. It’s really about changing the supply chain.”

Will we ever see on-demand at scale?

As Vogelaar has explained, on-demand isn’t for all apparel, but for the  trendy items, the smaller runs and replenishments, it could drastically improve supply chain speed and flexibility.

When Amazon was granted the patent for its on-demand apparel manufacturing system in April, naturally, more players started paying closer attention to the option. Amazon’s system would be able to start producing apparel promptly upon processing a consumer’s order. Based on what’s ordered, the custom-clothing manufacturing system would create a tech pack, print patterns and assembly instructions, then arrange those panels for a textile printer to print before moving on to cutting and assembly.

“Once various textile products are printed, cut, and assembled according to the orders, they can be processed through a quality check, photographed for placement in an electronic commerce system, shipped to customers, and/or stored in a materials handling facility for order fulfillment,” Amazon’s patent says. “By aggregating orders from various geographic locations and coordinating apparel assembly processes on a large scale, the embodiments provide new ways to increase efficiency in apparel manufacturing.”

The question for most brands and retailers that aren’t made of Amazon money is: when will the investments necessary for on-demand balance out with the benefits, from a cost perspective?

According to Vogelaar, it’s already there.

“If you lose your 20 percent write-offs, if you lost your 40 percent excessive marking down, if you lose that and you don’t have that problem and you actually have the ability to sell 10 percent more because you can actually sell exactly what the customer wants,” she said. “Then yes, [the products are] more expensive from a cost of goods made perspective than if you make it in Asia, but because my client does not have those write-offs and markdowns, they actually have stable margins. Every time they sell something, they know what they’re going to earn. And it’s a good margin.”

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January 17, 2018 Leave a comment



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The 2017 Mobile Wallet Comparison Guide

January 15, 2018 Leave a comment
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MAGIC is at Las Vegas FEBRUARY 12-14, 2018

January 15, 2018 Leave a comment


At both the Las Vegas & Mandalay Bay Convention Centers

SOURCING at MAGIC opens February 11

The February 2018 MAGIC show in Las Vegas will be bigger and better than ever!

(And MAGIC has invited AM4U Inc, your blog host, to build an actual Demand Manufacturing factory on the main floor of the show. Come watch the new ‘Magic’ of Demand Manufacturing replace the old Henry Ford parts assembly lines.)


Every February and August, the entire retail industry and convenes in Las Vegas for the United States’ most comprehensive fashion marketplace – MAGIC. Here you will find the latest in apparel, footwear, accessories, and manufacturing. From the height of advanced contemporary luxury brands, to the latest trends in fast fashion, MAGIC fuels the business of fashion.








View important show info, including dates, times, location and venue details.


Preview the most up-to-date floor plan of the show. COMING SOON.


Explore a comprehensive list of on-site events, seminars and show parties.


Get a sneak peek of the collections being showcased this season.


Plan your trip with exclusive hotel deals, transportation options and special offers.


Want more info? Need help registering? Connect with us!


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New Link to AM4U

December 18, 2017 Leave a comment
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Consumer Marketing Consulting

December 17, 2017 1 comment
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Most Marketers Have Restructured to Take Advantage of New Technologies

November 15, 2017 Leave a comment




Most Marketers Have Restructured to Take Advantage of New Technologies

They have also created explicit roles that deal with martech

November 15, 2017 | Marketing Technology

A new study from Chief Marketing Technologist underscores just how important marketing technology has become to many marketing leaders.

More than a quarter (26.9%) of respondents polled in September said they are completely restructuring their marketing and IT departments to make better use of marketing technology. What’s more, 14.9% hadn’t yet started such an undertaking, but planned to do so within the next 12 months.

Marketing Leaders Worldwide Who Have Restructured Their Marketing and/or IT Departments to Better Leverage Marketing Technology, Sep 2017 (% of respondents)

Meanwhile, others are ahead of the curve. Nearly 19% of marketing leaders polled had restructured their marketing and IT departments within the past year, while another 12.4% did so more than a year ago.

But reorganizing a department is just one way that marketers are investing in marketing technology. Having someone explicitly in charge of leveraging the technology is another.

In the study, 52.7% of respondents said they already had taken steps to name a martech leader. And while 21.5% said they didn’t have anyone in such a role yet, they had plans to within the year.

By and large, marketing technology has become a standard part of managing a business, and many companies are already shifting away from their initial focus on platforms to focus more on data.

—Rimma Kats

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