Many Companies in USA are more Concerned about Made in America Apparel , but the truth is that made in America Products are very costly and that is why outsourcing to companies like Zega Apparel Becomes Necessary.
The process of giving a company’s production process to third party or external company is known as production outsourcing. Outsourcing takes the form of offshoring when outsourcing is managed by companies located in other countries.
Outsourcing usually has been identified as a management and corporate plan to transfer major non-core activities to specialized manufacturers in order to sustain and enhance competitive advantages. Outsourcing can be defined as moving activities that were formerly developed in-house to external factories. If outsourcing takes place outside the home company or country, two different concepts can be identified, namely; International outsourcing and Offshoring. International outsourcing (IS) includes moving activities developed in-house to external companies in foreign countries whereas offshoring is moving production activities outside the home company or country to foreign company or country for production.
In 2005, Multi Fiber Agreement has strengthened the International trade liberalization which resulted as an increase in competition in the apparel industry; low labor-cost countries such as Bangladesh, Pakistan, India, and China were able to export their products and compete with established manufactures in North America and Europe. In order to compete and survive, North American and European manufactures developed offshore outsourcing activities.
There are some who are producing Garments for USA from Canada or other countries, one example of that is the company Zega Apparel , which is providing cut and sew services to many brands in USA, Canada and many other countries from their factory in Pakistan.
Sometimes, companies in developed countries (lead companies) emphasize on their core or specialized activities which are mostly design and marketing and moved other tasks; mainly production to their offshore companies in developing countries. Outsourced activities generally exist where developed countries cannot be competitive like labor power and low labor cost, while knowledge and technological activities are mostly kept at the home companies.
The topmost reasons why an apparel company outsources its production process are low labor costs in developing countries, flexibility, and focus. Lower labor and operational costs are among the most common reasons why apparel companies choose to outsource their production. If outsourcing is executed properly then it has a major impact on the revenue of the company and can provide substantial savings.
One of the reasons why companies also choose to outsource or offshore is that they may continue focusing on their basic business processes like designing and developing new concepts while assigning the production processes to external specialized factories like Stylus apparel, Factory45 and Zega Apparel Manufacturing.
Offshoring and outsourcing enable companies to hit into a global knowledge base having access to world class standards and capabilities of other countries. Sometimes companies got strand with internal resource crises, many world class apparel production companies outsource to gain access to resources not available internally. By delegating the production tasks to external agencies companies can skip some functions which are difficult to control and manage. Outsourcing and especially offshoring helps companies to minimize the production risks. Some lead companies also outsource to expand and gain access to new market areas, by taking the production point closer to their end users like brands, designers, or individuals.
Part of any analysis for a leading organization choosing to outsource any of its operations incorporates the cost of labor. Labor is among the biggest expense of any manufacturing company. Having company workers on payroll means paying them good wages and for most organizations it means providing workers additional medical benefits.
By outsourcing their production, some apparel companies gain increased flexibility. Typically, production gets outsourced to a foreign manufacturer, or a company that produces goods under the label or brand of the leading company or another firm. Foreign manufacturers produce goods for two or more different companies within the same industry or product type. Since the foreign manufacturer has more ability to produce more goods than the original manufacturing company or brand, it can react to improve production requirements faster than the home company or brand. It is more flexible than making a one-time capital venture that could sit without moving if the increased demand diminishes.
Some companies have experienced extreme paradigm shifts that have encouraged them to outsource their apparel manufacturing. A company can focus on its resources, both financial and human, on the areas that increase profits and revenues. With the production outsourced, companies can increases its revenues and profit margin through a better focus on sales and marketing.
The availability of low-cost workers has also gain the attention of renowned brands and apparel companies like H&M, Gap, Wal-Mart, Zara and others who outsourced their apparel production to production factories in Bangladesh’s garment industry.
Designer brands including Giorgio Armani, Hugo Boss and Ralph Lauren also have been outsourced their apparel production to Bangladesh. In 2013, Giorgio Armani received shipment of underwear and T-shirts made in a Chittagong factory of Bangladesh. A nearby production factory supplied ladies’ pants to Michael Kors.
The name of Pakistan will be among the top countries where the major apparel brands of the Europe and United States run their overseas production and manufacturing processes. For example, apparel merchandisers like Kohl’s, Nike, Sears, Old Navy, Wal-Mart, Macy’s and Gap. There are many more globally renowned clothing brands that do outsource its manufacturing operations to Pakistani garment manufacturers like apparel brands and companies namely Morte Apparel, Cali made Clothing, Gwap Clothing, Phoenom Genes, Six Dead Kings Clothing and New Bay Apparel LLC who outsourced their production to Zega Apparel in Pakistan.
Companies undertake outsourcing and offshoring for a variety of reasons which may vary from company to company, the benefits of labor are visible among some of the leading enterprises in Pakistan, China, Bangladesh and India; where in outsourcing has become a core element of business strategies for foreign companies like Vapor Apparel, Zega Apparel USA, and Social sewing.