Next time you buy a suit, consider supporting Joseph Abboud.
A recent Boston Globe article by Jenn Abelson (hassle-free link here) points to how the New Bedford, MA maker of menswear has charted a very different course than its competitors by keeping manufacturing at home, rather than outsourcing to China and other low-wage countries.
Over the past decade, jobs in apparel manufacturing have dropped from 443,200 to 196,500 across the country, but Abboud has expanded its workforce by about 20% to 590 employees. And the decision was not driven by some sort of patriotic fervor, but rather by an understanding of the true (and often unquantifiable) costs of outsourcing.
Marty Staff, the CEO says that
We couldn’t find a place outside our factory where we could get the quality and flexibility to satisfy our needs.
In 2004, the company did consider moving to China, where workers would be paid $1 per hour, compared to the $12 per hour of Abboud’s unionized workers. But, in contrast to Kevin Meyer’s
lemons lemmings, the CEO
also realized that outsourcing production, the favored strategy of many retailers, carried with it hidden costs. Chief among them: the company would lose control over the shipping time and probably be forced to make more merchandise than needed because of production minimums mandated at many overseas factories. . . . Abboud can better manage its inventory so that it makes suits customers are buying, rather than guessing six months ahead what they want. This agility is important to meet growing pressures — created, in part, by cheap chic merchants like H&M and Zara to provide consumers new fashions every week.
The gains made in turnaround time are remarkable. In 2004, it took Abboud about 5 weeks to make a suit. Now it takes the company 1 week. Relocating the distribution center from NJ to New Bedford reduced shipping times by 9 days.
The company has introduced other lean initiatives as well, from organizing work in cells (in this case, making one jacket at a time, rather than having individuals doing just one task on batches of garments) to job retraining and skill development.
The reporter mentions that Abboud is "investing millions of dollars in a sleek new production system." It’s not clear to me whether that’s journalistic hyperbole (has anyone ever thought of lean as "sleek" and "new"?), or whether the company is also investing in more high-tech facilities, software, and other tools. I hope that they’re not looking for technological silver bullets to expedite the lean transformation; Toyota’s experience shows clearly that technology is best used as an adjunct to human development. But based on what the company is doing so far, it seems that they’re on the right track.