The US apparel industry: a supply chain review (A)

This is an excerpt from a report. The link is provided at the end of the post.

Note the following:

• This is apparel manufacturing.
• He (Paugal) "accumulated intimate knowledge" in apparel.
• Paugal is a small company.
• Paugal employs 18 employees: His productivity exceeds the capacity of his employees.
• Paugal specializes in "fashion" with a life cycle of about 10 weeks.
• Paugal is a two-category operation: women's sweaters and dresses
• Paugal makes extensive use of independent contractors

Questions to ponder:

• What are you doing with the Knowledge, Skills and Experience you have accumulated?
• How many times would a network, like Paugal, multiply your apparel productivity and retail efforts?

* * *

In apparel manufacturing, our contact is Paugal Industries. Paugal Industries is an apparel
manufacturer located in the Fashion District in downtown Los Angeles. Mr. Pierre Levy, originally
from France, founded Paugal in 1983, after working as a sales representative for a large apparel
retail chain where he accumulated intimate knowledge of the design, manufacture and retailing of
apparel. Paugal is a women’s apparel manufacturer specializing in products in the “fashion” cate-
gory characterized by product life cycle of about 10 weeks. Like many companies in the women’s
category, Paugal is a small company. Paugal employs 18 regular employees. Paugal has two types
of operations. In the first category, Paugal designs and develops women’s sweaters under the name
Ultraknits. Ultraknits has two brands; Fifi, targeting younger consumers and Loop, targeting
consumers looking for distinctive fashion. All production in this category is performed by inde-
pendent contractors. Currently, Paugal contracts its production out to four factories in China and
Bangladesh. Major customers of Paugal in this category are department stores and specialty chain
stores. Production volume for sweaters is about 40,000 units per month. In the second category,
Paugal acts as an intermediary between the local contractors and mail order companies for women’s
dresses under the brand name Olive. Paugal is not responsible for the design of these dresses. Cur-
rently, Paugal uses two contractors which are both located in the Los Angeles area. All of the six
customers in this category are mail order companies. Production volume for women’s dresses is
about 5,000 units per month. We selected Paugal for our research contact as it is a small manufac-
turing company reflecting the current situation in women’s fashion business and it is working with
major retailers and contracts some of its business to off-shore companies.

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