Automated Apparel Manufacturing: A New Role For Financial Factoring

During the last week, we worked with a financial organization specializing in factoring for the Fashion industry as they attended the world’s largest tradeshow MAGIC (Men’s Apparel Guild In California), held here in Las Vegas twice a year. With more than 4300 exhibitors, covering more than 3 million square feet of space in two venues, with 66,000 attendees.

Between the design sections inside the Las Vegas Convention Center and those trendier groupings on display at Mandalay Bay, we had the chance to talk about some of the latest technology trends coming to consumer apparel, ranging from smart clothing to new automated manufacturing techniques.

As we are involved with a number of rechargeable initiatives in the smart wearables, we are concentrating on the new automation manufacturing technology currently being developed in university and private industry engineering labs.

Even with the port labor settlement, there is a continued uneasiness regarding the ripple effect from nine months of slowdowns and stoppages. Even the announced resolution will still put goods currently in port back an additional 6 to 8 weeks before deliveries get to a level of normalcy.

The fashion industry has felt the economic effects of cost of living increases in China, the working conditions of the factories inside of third world countries and the fact that the former traditional sewing nations are now outsourcing to lower labor markets such as Vietnam and Bangladesh. A recent Policy Research Working Paper from the World Bank points out both the challenges and the opportunities. The report also talks about the areas of unrest such as Turkey and Pakistan where transportation logistics and uncontrolled stoppages are frequent.

For these reasons and the fact of national pride, the goal of bringing manufacturing back onshore is becoming a priority. To do this, technology will be critical to control both quantity and quality of finish goods.

Computerized "nesting" of pattern parts and stacked automated cutting allows precision parts that are optimized from textiles is one of the earliest forays into the blend of manual and technology. Now, prototype development in a public/private partnership between Georgia Tech and SoftWear Automation are working on robotics that are able to manufacture and manipulate fabric pieces through traditional sewing machines with the same precision as humans.

The use of computers reaches all the way back to the initial design phase where 3D avatars are used as models and there is an open source initiative to help collaboration among designers.

Companies such as Materialise of Belgium are working on 3D printing technology has successfully developed the Parametric Sculpture Dress which was inspired by Lady Gaga’s commissioned artwork. The company worked with TechHaus collaborators Studio XO in London. The high gloss pieces were produced using the patented Mammoth Stereolithography machines, the world’s largest 3D printers.

Another company, Continuum is using 3D printed technology to produce their line of couture shoes called “Myth”, as well as the D.dress collection that is an actual application that lets you draw a dress, which is turned into a 3D model, and exports a cutting pattern to make a real dress. A laser cutter cuts the pattern out of the fabric, which is then sewn into the finished product (currently using manual labor).

Long term goals from groups like the Virtual Inventory Manufacturing Alliance are to produce mini and micro-factories that can contain order processing, design, pattern and marker generation, duel-sided dyeing, printing, labeling in a single pass, optical cutting, robotic handling, sewing, finishing and shipping. The company is working with Cal Poly Pomona University to build a prototype. Retailers are actually interested as the potential of a micro-factory could live in the back of the house with a retail showroom in the front.

While fashion experts don’t expect the general public to become their own apparel designers, the technology is advanced enough to allow for the proper fit of “unique shapes” to provide both a more flattering and better fit. That in itself could be a major incentive for the use of the technology.

But the underlying goal is to be able to continue to use the domestic design talent and find ways to keep manufacturing in North America at a manageable cost when compared to much lower labor markets.

The naysayers who have posted hundreds of comments about job loss to automation but the reality is that they could not afford to buy the apparel manufactured under even minimum wage and benefits packages required in the US. Having made this controversial statement, the truth is that fully automated apparel manufacturing will not happen anytime soon, but you can be assured that the blending of advanced computerized automation along with qualified sewers and finishers will be needed in this new domestic model if it is to be reasonably competitive.

The workforce for this InSourcing model will need to be more technically savvy in terms of design, programming, machine maintenance and troubleshooting to keep the next generation of manufacturing moving forward. There will also be jobs in the machine manufacturing sector as these concepts go from prototype to commercial volume.

As for the financial factoring of this segment of the apparel market, we learned that what is traditionally the signing of receivables over in exchange for capital advances, can be utilized in the Sourcing side of the industry where the textile suppliers, the raw supplies such as elastic, buttons, zippers and lace that will be supplying these micro-factories will need funding with terms.

Typically the challenge for Factors has been the credit-worthiness of the buyer. Even major retail brands such as JC Penny have become challenging financial bets. These new mini and micro-factories will have significant capital infrastructures in place with equipment, technology and real estate to house everything. This will provide better financials for non-traditional lending sources which fit well in the apparel marketplace.

We will continue to monitor the technology and InSourcing efforts for our financial clients.

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