Graphic: Made Everywhere, Even the Apparel Industry has been Globalized

“Made in China” has been a politically colored phrase not only in the US (US Olympic Uniform controversy), but also in the Philippines –the other day while on a cab, I heard a similar balderdash coming from a local radio announcer, who in ranting against China over territorial disputes included such false claims.

In reality, even the apparel or clothing industry has been about globalization, particularly the supply chain network. (hat tip Scott Lincicome)

To add, the apparel industry’s value added comes from design and post production facilities (marketing and distribution), an article from the Businessweek/Bloomberg.com points this out,

Garment manufacturing is a low-cost commodity business. Most of the value in the apparel industry comes from design, technology, sales, marketing, and distribution—not manufacturing. The successful players in apparel, such as Ralph Lauren and Nike, figured this out long ago.

Because the economics are bad, most U.S. apparel manufacturing operations folded decades ago. Only 97,000 Americans still have jobs in apparel production, according to the U.S. Department of Labor, and most of them are making highly specialized products like DuPont Kevlar uniforms that cannot be made elsewhere.

But just because America doesn’t manufacture apparel anymore doesn’t mean we can’t lead the industry. In fact, the world’s largest apparel companies are almost all U.S.-based, including Nike, VF, PVH, and Ralph Lauren, to name a few. These companies have grown a combined 146 percent during the past 10 years, adding more than $27 billion in revenue. Nike has created more than 15,000 new jobs in the U.S. during this time, Ralph Lauren almost 10,000. And unlike the low-paying production jobs next to sewing machines, these are well-paying jobs in marketing, accounting, design, and management.

These companies are winning globally by out-designing, out-innovating, and out-marketing the competition. Nike, for example, is unveiling a new TurboSpeed running suit at the London Olympic Games that it claims can reduce 100-meter sprint times by .023 seconds. Nike’s gear will be used by teams from many countries, including Russia, China, and of course, the U.S.

What Nike and Ralph Lauren don’t do is make their own products, in the U.S. or elsewhere—and this has become their competitive advantage.

Both companies source products from hundreds of independent manufacturers in more than 30 countries (less than 3 percent coming from the U.S.). The flexibility allows them to be cost-competitive globally. It also allows their design teams to focus on creating the most exciting new products possible without having to worry whether they can be made on a legacy production line.

Remember Fruit of the Loom? Brown Shoe Co.? Cannon Mills? Levi Strauss? In 1970 these were the largest U.S. apparel and fabric companies. They all owned their own U.S. manufacturing plants. They all struggled to innovate and grow, and they either went bankrupt or were bypassed by more nimble competitors who had no factories. If only they had outsourced …

Not only is outsourcing good for business, but the future of the American economy is dependent upon it.

So let’s stop whining about a few “Made in China” tags and start cheering for all of the great athletic performances made possible by superior U.S. innovation.

So when you hear someone rail about “Made in China” you can be assured that the person regurgitating such absurdities have either been ignorant of the real developments or have been deliberately employing deception as part of political propaganda to invoke nationalist (us against them) sentiment.