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Saturday, November 24, 2007

VAR virtual manufacturing network

Outsourcing

Does outsourcing create opportunities for Value-Added Resellers (VARs), retailers and independent contractors (ICs)? What outsourcing leaves behind is a vacant facility, unemployed workers, VARs, and. . .customers. Essential components and players toward startup of a manufacturing facility. Conventional wisdom dictates workers re-deploy to other employers or enter new industries. Resellers and retailers may opt to continue with the overseas manufacturer or work with domestic suppliers to fill their system and component requirements.

A wealth of resources

However, unconventional wisdom sees a wealth of resources outsourced companies leave behind. These resources consist of the Knowledge, Skills and Experience (KSE) workers acquire and accumulate over their years of employment. These resources are overlooked by those who once depended on that company, namely, workers and retailers. Something else that is much overlooked: The difference between a name-brand computer or server at any major electronics retailer and one at an independent VAR? Other than price and location: None. What if VARs and resellers leveraged their experience with suppliers where they themselves took on the role of supplier for these ICs? What if these ICs could extend a VARs sales, service and support market reach through a VAR manufacturing network?

VAR virtual manufacturing

That is, the individual who supports the assembly process of a system on the production floor as an employee builds the same, at home, as an IC with a wealth of KSE, an entreprenuer, for VARs and retailers. These individuals may include non and certified computer technicians, software and electrical engineers, hobbyists and others. It's their choice to make whether to focus on service (build) or support (installation) or both. Effectively, VARs become suppliers to their own manufacturing force, independent contractors, not employees. These ICs represent a VAR virtual manufacturing facility.

Compensation

An area of opportunity between ICs and VARs that is quite common with other areas involving ICs is compensation. It stems from a mutual tendency to mis-apply employer/employee compensation structures. Assuming, for the moment, a fair compensation of ICs by VARs. It's been said individuals with vast KSE resources would not be content or satisfied with nothing less than a hefty fee for their services. Right. So, don't go there. There are, on the other hand, more than a few people who would not pass on the opportunity to create a constant source of income as ICs, at their own pace, in their own home.

Networks

A vital difference between actual versus virtual manufacturing is the virtual can be expanded endlessly through networks. Networks may start locally, but they can expand regionally, state and nationwide. They generate income for network members, both, Independent Contractors and VARs. The opportunity exists for VARs and mom & pop businesses to network the wealth of KSE resources in the tech community left behind by the corporate practice of outsourcing.

Thursday, November 22, 2007

Making a cool dress hot

I like dresses।

Whoa, there! Rein it in, ladies and gentlemen। That is, I like the sight of a dress. . . with a woman in it.

The overall comment I hear out there is that women like them, too. Typically, those comments revolve in differing order around style, color, size, fabric, fit and price. The presence of all these in a dress, so as to ensure customer satisfaction, is nigh to implossible. Retailers buy from suppliers who buy from manufacturers. It's about quantity and expediency with price being the modifier. On one hand, large quantity purchases versus small quantity purchases on the other, but price is the determining factor and how well its affect is managed around the sale margin of profit. Quality issues are turned over to the expertise of alterations boutique owners.

So, how does an independent apparel retailer take a cool dress and make it hot?

A customer shops your boutique for a dress while her friend tags along। It's a great day! Your customer finds the only (or last?) "cool" dress on the rack that's "just right", she says, for her. Her friend lavishes her with joyful compliments.
Now, she decides she would really love a dress just like that, but she has just seen the only (the last?) one taken by her friend.
"If I could only change the color from green to red that would be great" she cries aloud.
"I can do that" you tell her.
You note her measurements, color, fabric and quote her a price।

No need to bore your customer with what she does not know। Namely, you have the capability for such delivery because of your local, direct model network of dressmakers। There's no inventory to stockpile. There's no supplier stockpiling large amounts of your cash in his bank account, also.

"You may pick up your hot dress in three days" you say to your excited customer.
You either post the order on the web for your local network to access or a network contractor picks up the order at your boutique later that day।

Happy Holidays!

Thursday, November 15, 2007

Brainstorming facility in Texas

I was brainstorming with a friend about the "facility in Texas" post. I respect her vast range of experience in apparel. She shared her thoughts about some common expectations, costs and a vision. She did not wish to trouble herself with this blog business so she gave me a go-ahead to share her thoughts. Her thoughts inspired the following questions.

What if "manufacturers", or "contractors", that is, the individual(s) who bring workers together, revised the way in which they obtain their compensation?

Manufacturers commonly rely on big ticket orders from retailers for mass production of apparel items. When the volume, or specialization, is beyond their capability
they turn to contractors, those once-upon-time countless, tiny "workshops" whose lifeline attached directly to the manufacturer. Both, take their lion's share of
of money received for goods made then dole out meager wages to those who did most of the work.

Yes, that is the traditional and conventional way of business and one I reject. If manufacturers' and contractors' compensation expectations included their workers
first, the workers themselves would be their best agents to attract an expanding workforce. Hence, manufacturers and contractors could service so many more
clients.

Alas, the above is not a good fit in the present conventional apparel manufacturing model in Texas or anywhere.


What if retailers looked more closely at their advertising dollar to sales ratio?


Retailers spend huge bucks on advertising. Even independent retailers' smaller advertising costs weigh heavily on their accounts ledger. The Internet is here. Where are you? If, as my friend says, and I have written the same, buyers are shopping for "Made in USA" or "Made in Texas" they can find it readily without you spending precious dollars on advertising.

Akeen to the Internet is word-of-mouth. That, folks, is the original social internet even before MySpace. IF, you could sell less, but without the cost of advertising, know you have an expanding awareness of your business driven for you by your customers and end up with higher margins for yourself, which would you prefer?

Alas, the above is not a good fit in the conventional apparel retailing model in Texas or anywhere.



What if an interested party were to buy up old factories and refurbish them with modern technology and well-paid workers?

I do not know this is being done. I do know the jury verdict is pending on those old factories which went into full refurbishing mode even while laying-off excess workers.
Those were workers not necessary in the operation of the new, modernized, technologically, reborn factory. I have not checked how many of those continue, still. I do know a look at Texas state job market projections as near as 2008 and 20 years down the road show no signs of apparel life in the future. No, do not be alarmed. This is opportunity!

Even if the wonders of a modernized factory were to result in considerable worker wage increases one should bear in mind the number of those fortunate workers
would be a far cry from those employed in that same factory, formerly. Clearly, I am neither an economist nor a venture capitalist, but I see a very steep climb
for the investor's dollar before he could expect a return and a good one at that in this kind of deal.

Alas, the above is not a good fit in the conventional manufacturing model in Texas or anywhere.

I do not take credit for the phrase, but I think the consumer turned-up-nose attitude, "One size fits none" to ready-to-wear is manufacturing' s karma come back on them.
The Independent Contractor Network model is driven by the expectations members place on themselves. The costs of apparel production and retail are intimately
connected between member contractors and retailers. The vision is one of esteem and value, not just of business, but of the business of people. The benefits follow.

Sunday, November 04, 2007

Apparel: Uncompromising quality?

Quality is job one.

Ford is not the only one with that goal. Local independent apparel retailer owners want to hold a tight-rein on uncompromising quality. But, how accurate is the reality, really?

Retailers rely on manufacturers and suppliers for merchandise to stock their boutique inventory. Typically, this results in retailers stockpiling more inventory than they care. The hope is for a complete sale of all inventory in right size, fit, color, fabric and style to satisfied customers.

So, if quality is defined as the complete presence of size, fit, color, fabric and style are these elements within the control of the local retailer?

I do not wish to disparage manufacturers, but can local retailers fare better in their control of quality with local production?

I have often posed the question:

What's the difference between an upscale dress on the rack at Neiman-
Marcus or Nordstroms and the local independent apparel retailer?
Except for the location and price, none. The same individual who
assembled the Neiman-Marcus dress on the manufacturing floor assembles
the same dress as an at-home independent contractor/entrepreneur for the
local retailer.

Who makes up such a local production core? You can count displaced, experienced apparel production workers among the over 40 million the Home Sewing Association
who sew in their homes. The HSA cannot say whether it is for profit or leisure.

How many of those 40 million people do you think live in your city?
How many do you suppose would enter into a profitable at-home enterprise that allows them to utilize their resources and be creative?
Do you suppose there may just be the number of quality contractors you need for your local dress production?
Do you operate with a 7 to 14 day customer fulfillment window because that's what it takes for your supplier to fill and ship your order?
How much smaller a window would your local contractor enable for your business delivery to your customers?
TSR, Inc. is committed to the development of Independent Contractor Networks together with Independent Apparel Retailers. IC-Networks are local, regional,
state and nationwide. They are more than a social club. They consist of a membership with a wide variety of resources, that is, Knowledge, Skills and Experience
in apparel. They generate income for all members.