While the overriding trend in textiles and garment manufacturing, along with most other areas of manufacture, has been for production to move to lower cost regions offshore, the topic of ‘reshoring’ manufacture closer the point of use has been of interest for many years. In 2005, Warburton and Stratton published an article  discussing the optimum split between onshore and offshore manufacturing to give the best combination of cost and response time for innovative and fashion-led products. Their conclusion is that, with the right mix, such a combination is ‘viable and profitable’.
Many retailers based in the EU recognise the advantages (and challenges) of local manufacture. Daliah Simble, head of sourcing and production for Roland Mouret (interviewed for the Guardian ) comments that “UK manufacturing not only offers duty free, fast and quality fashion. It also offers brands and retailers the opportunity to take back control of their designs and manufacturing, establish a transparent supply chain and lower carbon emissions.” Steven Barr, head of the Manufacturing Advisory Service, recognises significant opportunities for domestic production, especially with the “desire for more sustainable clothing, niche ranges and in tapping into the popularity of the Made in Britain brand in overseas markets”. The main reasons cited for reshoring are product quality, delivery lead times and in being able to bring new lines to market quickly.
As the industry now understands in many cases, digital production taps into these benefits, and indeed enhances them. The promise of introducing new designs into retail more rapidly is delivered with digital printing, and this encourages onshore production as the rapid turnaround benefits are diluted if lengthy transportation cycles are included.
Key decision factors
The main identifiable factors in any onshore/offshore production decision are production costs, shipping costs (including importation duty if applicable), response time (including design turnaround time, production time and shipping time), availability of capability in terms of skills, technology and capacity, as well as other costs. We will cover these items in turn.
Offshore production is generally more cost-effective, especially when producing large volumes, and especially for more labour-intensive production tasks. Production costs will vary from country to country, with a general trend that Western Europe and USA are the most expensive, Eastern Europe, Turkey, Brazil and North Africa being intermediate and India/East Asia being the lowest cost. Buyers looking for the lowest costs are moving to South East Asian countries like Vietnam as Chinese labour costs increase. Gaining the cost advantage from offshore production may be subject to a relatively large minimum order that doesn’t suit all business models, and the costs are also subject to currency fluctuations, having become significantly more expensive from the UK since the post Brexit currency devaluation. Onshore production may be more expensive, mainly due to higher labour costs, and this tends to be especially the case for larger orders. However this cost is likely to be more under your control, and it will also not be subject to currency fluctuations.
Shipping and importation costs
The other major cost consideration for offshore sourcing is shipping and duty costs. Import duty into the EU is typically 12% for completed garments, and 8% for printed textiles – a significant additional cost to be taken into account. This cost can be saved if manufacturing in house or importing from within the EU, although still may apply to raw materials being used in production (although the value of those materials is then commensurately lower). Shipping more than a very small order by air from overseas is prohibitively expensive, but by sea (from Asia) or overland (from Eastern Europe for example) is cost effective.
While cost factors generally favour offshore production, response time factors strongly favour production close to home. Even in our connected world, it takes significantly longer to get a design from initial concept to retail if production is remote. Assuming the procurement chain is already in place, the main factors influencing response time are the design time, sampling time, production time and shipping time. The design time may include visits to the factory to discuss possibilities, and translation of concepts into samples for customer acceptance. Samples will need to be sent back and forth between the factory and the head office to back up initial acceptance through digital files. Quality control samples created during production will also either have to be assessed remotely or shipped to the design authority for approval, which can introduce significant delays. Assuming actual production time is similar, the other factor which influences response time significantly is the shipping time for the finished product, which can be many weeks from Asia including time to the dock, time on board and time in customs (another potential source of delays).
Even a simple thing like an 8 hour time difference introduces delays which add up, as each day that is missed due to working hours not overlapping leads to another day added to the response time.
Availability of skills and equipment
Due to lower investment in manufacturing in the UK and other ‘developed’ economies, in some cases this means lower availability of the most up to date machinery, software etc. This is starting to change but high value manufacturing capacity in the West is still limited and the current economic climate can stifle investment. Another significant issue is skills shortage – with the decline of textile manufacturing many key skills have been lost, and so the right capability is hard to find, and costs more if you can source it. This is particularly true of traditional skills like embroidery, appliqué, etc, but can also apply to software and digital production skills.
In contrast, many offshore manufacturing centres have up-to-date machinery and CAD/CAM systems, as well as a pool of skilled and experienced specialist workers. The freedom to source skills at a reasonable cost is a key reason to place manufacturing offshore, especially for labour-intensive production.
Offshore manufacturing tends to incur a whole raft of additional costs which need to be taken into account when comparing production costs between two manufacturing strategies – in fact in some cases these may completely change the outcome, so it is vital these are looked at objectively.
One cost is the travel cost to visit the factory. This is often estimated and almost always ends up being more than expected, generally because the number of visits required turns out to be more than expected. A purchasing agent can potentially be used but this introduces further costs, as well as the risk of trusting a third party to adhere to your own standards. Additional sampling also incurs costs in production and delivery.
Translation and interpreting costs can be significant if the factory does not have people that speak your language, and there is a risk of potential additional costs due to misunderstandings across languages and cultures.
Finally, production at a remote factory can lead to increased financing costs as remote factories often expect a large deposit and completion of payment before shipping. The resultant negative cashflow may need bank financing.
Impact of digital printing
Much of the talk around ‘reshoring’ has been in the light of the impact that digital printing has had on textile decoration in the last few years. By reducing the time to production of printed textile designs, digital technology has enabled a shift in business model towards one much more oriented towards responding rapidly to trends and introducing designs into retail in response to those trends. This business model is characterised by reduced discounting and increased gross margins: WTiN numbers show a typical markdown of less than 20% over 15% of products versus 30-40% markdowns over almost half of products for more traditional retailers. Brands like Under Armor recognise this value, with Randy Harward, Senior VP of Advanced Materials and Manufacturing commenting that customers “won’t be buying because of novelty, they’ll be buying because we have the right size and right colour and the right design when they want it.” 
Of course much of the advantage of rapid turnaround from digital production is diluted if the products then take many weeks to move by ship from one side of the world to the other, so this business model relies on a significant proportion of production occurring more geographically adjacent to the retail location. Production in Eastern Europe, North Africa and Turkey has supplemented, or even replaced production in the Far East, and for short run production even closer locations are often used.
Brand case studies
Primal, a UK-based supplier of customised cycling clothing, does all its garment manufacture in the UK, importing fabric from outside the EU. The reasoning is that to provide the quick response to customer orders (which include multiple sizes of a range of jerseys, shorts etc as well as customised prints), fabric printing and garment finishing needs to be in house. The company uses all digital sublimation printing to create its designs.
In contrast, Vulpine, another cycling clothing brand that makes high-end city and leisure cycling wear, sources most of its garments overseas. They are designed in the UK, and more recently the brand has added a ‘Made in the UK’ line to its range, recognising the sales advantage of this higher priced range and allowing them to introduce new designs quickly. Sourcing whole seasons of garments from remote factories has been a significant cashflow issue for the company, which has recently undergone a refunding round.
Fashion-Enter's factory in north London produces 7,500 units a week for clients such as Asos, M&S Best of British range, John Lewis and a host of small designer businesses. The lack of specialist training and skills in the UK means that their entire workforce is from countries including Poland, Hungary, Bulgaria and China. Jennifer Sutton, development manager for Fashion-Enter, comments that “with the current workforce aging, it is time to up-skill the next generation” . Fashion-Enter uses its ‘made in the UK’ ethos to enhance brand values. The company is Sedex Members Ethical Trade Audit (SMETA) approved which means its factory is fully compliant. This approval helped it win the contract for the opening ceremony for the 2012 Olympic Games.
Tim Phillips, IMI Europe/Catenary Solutions
 Roger D. H. Warburton and Roy Stratton “The optimal quantity of quick response manufacturing for an onshore and offshore sourcing model” International Journal of Logistics Research and Applications, Volume 8, 2005, Issue 2, pp. 125-141. http://www.tandfonline.com/doi/abs/10.1080/13675560500166798
This article was originally published in Digital Textile Magazine, where Tim Phillips is Consulting Editor.