Onshoring hasn’t taken off as a runaway trend even as the current political administration exacts punishing duties on offshore production markets far and wide.
There are factors at play keeping fashion brands from bringing back—or even redirecting a portion—of their sourcing to the United States, from scalability constraints to labor costs and disjointed supply chains, according to experts at the Fashion Tech Show hosted by PI Apparel in Los Angeles on Tuesday.
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Some of those issues could be mitigated by advances in technology, from factory automation to artificial intelligence that helps with design as well as inventory planning to shorten production cycles, according to Ashley Stickler, vice president of marketing and partnerships at CreateMe Technologies, Inc.
“We have 19-month lead times, we’re forecasting in advance,” and the pipeline that companies are working with for materials leaves something to be desired, as it’s a cumbersome one that relies on inputs from other markets that take time to produce and ship, she said.
CreateMe aims to solve for at least a portion of the problem, as the AI robotics company automates manufacturing for products like apparel, replacing thread with digital adhesives to enable faster and more efficient localized, on-demand production.
According to Stickler, the economic value of a garment produced overseas is already degraded “by the time it lands on U.S. oil” because of long lead times. “Trends have shifted. We’ve moved on,” she said.
However, “If we take the current system that’s in China and try to drop it in, let’s say, California, the denominator of labor is just not going to work,” she explained. “That’s what’s interesting about the push toward automation, because the current fundamental model over there doesn’t exist here. The math doesn’t math unless you redesign the system.”
Keith Hoover, president of Black Swan Textiles, LLC, a digital product development consultancy specializing in textiles, agreed with the assessment, saying that the traditional fashion calendar and the industry’s long, disjointed production chain needs revamping.
“We try to predict what people are going to want a year and a half out, and we’re always wrong. So we have either overproduction and then liquidation, or underproduction and lost revenue,” he said.
Hoover sees AI playing an integral role in product creation moving forward, starting simply with helping brands to decide what gets made. “We can identify the products in the short term that people are going to want based on data that’s readily available using AI agents… and then we manufacture smaller lots, and if it keeps selling, then we make more. If it doesn’t sell, then we make something else,” he said.
Technology that enables digital product creation, like 3D design software, is already helping accelerate progress. “Where it’s most effective is it allows a creative, talented designer to visualize ideas very quickly,” he said.
Now, generative AI has been added to the mix, fueling even faster conceptualization using a designer’s preliminary sketch or even a description of what they’re looking to create. “This isn’t AI replacing the designer; this is the designer using AI in the same way they used to use an art department to draw up different colorways of different variations,” Hoover explained. “AI enables the designer to quickly go through iterations and then present something to the merchant that has a good chance of being adopted in line.”
This kind of technology can’t solve for the physical limitations of the U.S. supply chain, however, starting with raw materials. “The U.S. is the third largest cotton producer, but we export 75 to 80 percent of that cotton offshore. Polyester is the No. 1 fiber used in the apparel industry, and that’s mostly made in Asia. We have some excellent knitting mills, and we have one good woven mill. We don’t have a lot of fabric makers in the U.S.; dye houses, same thing,” he said.
The upstream supply chain is simply missing from the domestic market, he said.
Alexander Zar, CEO of Lalaland Production and Design, Downtown L.A.’s largest leather goods producer, agreed that the limited availability of raw materials in the domestic market is both a major constraint and a burdensome cost to manufacturers that want to scale.
Lalaland produces luxury footwear and handbags for some of the world’s most well-known labels—ones that can charge a premium for goods made with expensive U.S. labor and high-quality materials.
“If you are in the luxury market, you can onshore,” Zar said succinctly. “I can make a very beautiful luxury craft product. But if I want to do it at scale, if I want to go after mass market, I believe especially on footwear, we need to eliminate labor as much as is possible,” he said.
Many have tried and failed at onshoring by attempting to replicate the factory model seen in Asia—one that relies on cheap labor and hundreds, if not thousands, of workers. “They are hoping to get close to the margins or the prices of China. That is not working, and it will never work,” he said, largely because of the cost of labor in cities like L.A.
When it comes to manufacturing, “I believe that we have to leapfrog to the future,” Zar said. “If you are going for the mass market—scalable and domestically produced—we have to look at it completely differently. We have to see the parameters that we’re working in, and work within those parameters,” he said. That means a greater reliance on automated production processes like 3D knitting, 3D bonding and 3D printing, he said.
“For instance, the upper is typically the most time-consuming part of the shoe. You can use a little bit of automation—maybe 3D knitted with a technical-knit, full-sock upper. Then you eliminate the biggest bottleneck,” he said.
Zar illustrated the problem as well as the opportunity.
“We are importing 2.3 billion pairs of shoes annually in the United States,” he said. “Building that kind of infrastructure to support that domestic capacity and that kind of production is impossible. We are dreaming, and it’s never going to happen.”
Companies could ostensibly hope, however, to eventually capture 10-20 percent of that market for footwear domestically if they can accept the capital-intensive nature of the enterprise—and the associated cost—or if they “can look… outside of the box” and adopt new technologies that replace the high-touch aspects of production.
“That is the only way we can have a ‘dark factory’ and build and produce 24 hours a day, and that’s what we are working towards,” he added.
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