DLA Troop Support in Philadelphia recently had a meeting for industry folks. In it, they mentioned that the budget for fiscal year 2011 was 1.9 billion. They had spent 1.7 billion by that time. Yet, everyone was wondering why there have been so few solitications throughtout the year. One big reason is that the cost of fabrics is eating up alot of that budget. Now that we have made the turn to Multicam and fire retardant fabrics, the prices of these raw materials is eating up more and more of the budget. These advances are good and we should be providing these to our soldiers. But ultimately, we’re making a lot less number of units even if the overall budget dollars remain the same. Unfortunately, the number I heard for FY 2012 was $1.5b. No surprise really, but it does make the market a bit more challenging.
Made in USA is becoming more attractive day by day. Yet companies still considering or currently importing their product hear the “the China price” and it can be very appealing. On the surface, it appears as a small fraction of what domestic suppliers charge. But a quote from a China or other Far East factory is only the beginning of your cost calculation, and there are many more costs and variables that determine your total cost, which is what you should really compare.
Here is a list of additional charges:
Shipping costs: You can choose air freight or sea freight. Sea freight is much cheaper, but usually takes 20-30 days from the Far East. International air freight is quite expensive and is typically only considered in the most urgent of circumstances.
Insurance: Various insurance coverages protect the importer and shipper from unforeseen disasters such as the ship sinking, fire, accidents, pirates, etc.
Customs bond: A customs bond or surety bond is a guarantee from a bonding company to the government (customs department) that the importer will abide by all laws governing importation, will present the goods to Customs for inspection, and pay all duties and fees related to the shipment.
Customs duties/fees: You’ll need to pay duty costs on your items according to harmonized tariff schedule (HTS) code. Depending on the type of product, duties can add significantly to your landed cost. 17.6% is applied to many nylon products like bags, pouches, and cases.
Customs clearance fee: More fees to cover customs clearance and processing services.
Documentation fees: In international trade, there’s tons of documents being processed both domestically and internationally. Original bill of lading, power of attorney, documentation between ports and logistics companies, and documents to and from your customs broker.
Customs inspection: There are a number of exams that Customs and other agencies can require to ensure the safety of US citizens, wildlife and natural resources. Don’t be surprised when your shipment is held for additional inspection beyond cursory inspection.
Inland Ground Transporation: Once your freight hits the port, it’s loaded onto a truck or train to get it to its final destination.
So there it is, the composite list of what you need to import your product. Am I crazy for telling you? Not really. If people think that a sewn product is just a commodity and want the lowest price available, China is the default option.
But even if the price still looks good after adding in these costs, you have to consider one more thing. All of these additional costs don’t include potentially the most costly element of all – product issues. You just might go through the entire time and expense to get your shipment here only to discover that there’s a problem. And when you discover the problem when the shipment hits your receiving dock, then you got a big problem. Issues can include: Manufacturing mistakes, wrong counts, wrong SKUs, improper packaging, or damage to the cartons. All may leave you with unusable products. There’s no good recourse and a very long and costly delay to replace them. How do you tell China to fix their mistake in a few days? You don’t. They can’t and they won’t.
But here’s the biggest problem: the broken promises to customers. It’s likely that while you’ve been waiting for your product, you’ve made promises to customers that they will have product on a certain date. When that doesn’t happen and you need another 60 days to rectify the situation, customers walk. And quantifying this lost opportunity cost is something many companies can’t do and therefore don’t know how to fairly compare prices to domestic sources.
Unfortunately, there’s one too many purchasing folks who know they’re reviewed on acquisition costs, not total cost. Total cost is too difficult or impossible to calculate in many companies. How do you account for all the extra hand holding, extra checking, lost time communicating and resolving issues? That’s not a 5 minute conversation, so many companies live with this large unquantifiable cost until the one day the wrong product hits the dock and the s%$# hits the fan.
No one can be an expert on every product application, but customers often ask for a recommendation on which fabric to use for a particular situation/environment. I’ve accumulated a bunch of knowledge on textiles in my head, but I found this chart as a very useful guide. Kudos to American Cord & Webbing, a supplier to Bearse USA, for putting together this very handy chart. The chart compares several fabrics across a variety cost and performance issues so that you can choose appropriately.
There is a very handy on-line reference guide to Military Mil Spec Numbers. Whether you need to determine the specs on nylon, canvas, web, binding, or thread, you’ll likely find it here. It also cross-references old mil spec numbers to the current one.
I’m often asked about solution dyed webbing. Most webbing is woven and then dyed to a color, called Piece Dyed. Solution Dyed webbing has the dye mixed in with the yarns before being woven,
and so the color is present throughout the web, not just on the outside. The benefit is better color consistency from roll to roll, lower reflectivity in the IR spectrum, no color change with
abrasion, and better resistance to sunlight fading. The downside – Price (of course). You get what you pay for.
Most of us in the tactical gear world are working with woven nylon fabric, whether Cordura or otherwise. So here’s some education on the three layers that make up this fabric.
Typically the top coating will be a Durable Water Repellent (DWR) that serves as a stain release and water resistant barrier. It could also be an anti-microbial, anti-static, anti-fungal, or wicking layer.
Middle (Woven) layer:
The woven fabric is the meat of the textile. It will provide the durability (often dependent on the denier weave). Typical denier weights are 210, 420, 500, or 1000. Ballistic nylon is 1680D.
In most fabrics, the bottom layer is a water proof barrier made from an applied film or coating, typically polyurethane (PU). It can have a multi-ply configuration that might include a waterproof/breathable film and a protective and wicking layer. Many of the attributes of the Top Layer are often added or duplicated in the Bottom Layer. If the fabric is treated with Fire retardant, the back of the fabric often looks like it has a milky residue.
There’s a lot of acronyms and jargon in the fabric world. Remember to ask if your fabric is IR rated ansd or solution dyed as well. The good Made in USA fabric and web typically have it. The overseas knock-offs typically do not. Know what you have so you can sell the benfits of your superior fabric. Or save the money if your customer doesn’t need it.
Hope this helps a little bit next time you talk to a fabric vendor.
I’ve been going to the Shot Show for several years. It’s always a great way to start the year. You can’t help but to have uber-levels of post-Show enthusiasm and optimism. Several vendors who exhibited expressed to me that they were enthused by the higher traffic and frequent visits from qualified leads this year.
Overall, I had a great time. But here are some my takeaways:
- I hate Sands Convention Center. I hated it last year and I know the organizers made a lot of effort to make improvements, but frankly, it still doesn’t cut it. Shot Show is too big for the layout. You’ve got exhibits sprawled across hidden rooms and multiple levels. After day 3, I’m discovering areas that I haven’t even covered yet. Food stands are terrible. Exiting out through the Venetian is a cattle call. Taxi lines are awful. Bottom line…from an attendee’s standpoint, it’s not good.
- When will NSSF acquiesce the Military folks and create its own category? Military vendors are the bastard stepchild right now. By default, most are shoehorned into the Law Enforcement category. And while many vendors crossover between law enforcement and military, plenty do not. As a result, the Law Enforcement category is busting at its seams with companies. Yet, NSSF still maintains a category for Outfitter’s Post & taxidermy with a whopping 13 exhibitors? I know the organizers have resisted military folks hijacking their show, but there’s a better solution than what is done now.
- Thank you Caleb Crye (of Crye Precision and Multicam camouflage fame). Let me explain. As most of you know, all of our nylon tactical gear is Made in USA from mil spec materials. For several years now, I look at display after display of Chinese knock-offs of digital universal camo pattern (UCP) and cringe. Most of it looks like fabric run under an inkjet printer with a glossy finish. Now that Multicam is being rolled out to the forces, UCP is on the way out. This year, I started to see small displays of Multicam product in these importers’ booths. Each time I asked about how it was manufactured, they complain about how expensive mil spec material is and how they have to procure and ship to their overseas factories. I couldn’t help but smile from ear to ear. So thank you Caleb, for sticking to your guns and holding the license for your product. It’s a small victory for those of us still sewing in the USA.
- The nylon tactical gear field is healthy with a lot of promising up and comers.
- Bearse USA has had a lot of participation in the body armor industry making vests, plate carriers, etc. A lot changes continue to happen in this biz and it is always interesting to watch the ups and downs of the players in the prime contracting arena.
- Glad I don’t sell gun safes. Those must be a bitch to ship, set up, and send back home.
- Weather was much better this year. Thank you Mother Nature. Didn’t think 3 days of straight rain could ever happen again.
- Finally, I wish Shot did not overlap with Outdoor Retailer. My feet need a break. Plus, many of the folks who attend Shot also go to OR. As a vendor, the time could be spent more effectively if there was some spread between shows. Just sayin…At least there is Summer OR.
Because of the positive response and several questions on the first half, I’m posting this ahead of schedule.
Think of ways how you can help…Do I have any materials/info I can provide to assist my manufacturer make a high quality product?
- the item(s) carried in a pouch/pocket for a fit check
- critical dimensions to verify
- a specific test procedure(s) to ensure proper functionality
- info on how picky you are about loose threads, straight stitch lines, or stitches per inch
- any other performance checks you can think of
I understand that you don’t want to hold your manufacturer’s hand, but the first time through, it makes a lot of sense to invest the time to make your arrangement work. There’s no sense in making this more difficult than it should be. It’s like an open-book test. There’s no conflict of interest knowing what you test for. You also don’t want your contract sewer focusing on things that are not important to you. Remember time is money and you’re being charged accordingly. I also highly encourage you to consider a visit to their manufacturing facility before or during the first production run. Not having access is a red flag.
You’re in the home stretch. You finally get your price, now what?
Sewing is definitely not a commodity business. Quality differs immensely between shops. Get a sample and evaluate it. You want to make a good long term decision. Realize that switching from one manufacturer to another likely takes in the ballpark of 90 days or more.
Here’s a list of other significant criteria to consider:
- What is the contractor’s experience in manufacturing my type of product?
- Can the sewing contractor’s capacity expand as my needs grow?
- Will my product be made by sewers already on staff? (Note: you don’t want the newbies)
- Is there someone assigned to my account? Is that person an owner or someone with leverage within the organization to make my needs a priority?
- If there was an issue with the product, what is the process to rectify and how quickly will it get addressed?
- How do I know that the raw materials are high quality?
- Is there an open door policy for their manufacturing floor?
- Besides price, how well will the sewing contractor fulfill the other critical elements of the relationships?
- Will they effectively manage any materials and/or confidential information that I provide?
- Do they have the capability to ship products with the major freight carriers (UPS and Fed Ex), air in product if I need it?
Do the answers to these questions lead to a positive value proposition for your company? Don’t take it lightly. If they fail on these, the opportunity cost of wasted time and disappointed customers will far outweigh saving a small % on the acquistion price.
Bottom line: Be realistic, be thorough, and be generous with information. It can be done successfully. In a complicated process, expect to have a rocky moment from time to time. But the best manufacturing partnerships are established through mutual commitment, good communication, and trust.
How to Establish a Win-Win Relationship with a Cut and Sew Shop
Are you ready to find a new manufacturing partner? There are many reasons why you might find yourself in this situation.
1. You don’t have our own build capability.
2. Your current manufacturer sucks
3. You’re wasting your own scarce time making product instead of marketing and selling.
4. You have some internal capacity, but you need supplemental help.
5. You just landed a huge order that can’t be late.
6. You need a partner who you can plug in when you decide it’s time.
These are all good reasons.
Just remember, custom manufacturing is not for the light hearted. It’s messy, tedious, and detail-oriented. Murphy’s Law stands ready to pounce. From a sewing contractor’s perspective, the process of integrating a new customer takes time, money, and the allocation of limited resources. Evaluation of fit is a two-way street. Set your expectations appropriately and prepare to do your portion of the heavy lifting to make the endeavor successful. This is a process with multiple decision points.
It’s best to have some perspective on how you will be evaluated from the manufacturer’s point of view. If you’re an established company, that’s a plus. If you are prepared with manufacturing information and can share a lot about the opportunity, contractors are even more intrigued. If you have a finalized design, a prototype, an expectation of cost, and a known lead time…Wow! This is looking good. Established businesses with big quantity requirements and proven sales channels are the core of the manufacturing business.
If you’re a new company with a new product, don’t fret. We’re still here, but experience teaches us to be a bit more cautious. Empirically, the success rate of launching new products is very low. Contractors find it difficult to re-coup the cost dedicated to new projects. They never want to run 1 order and call it quits. Essentially, they’re going to evaluate your potential for selling your product as much as you will evaluate their capability to make it. It’s truly a partnership where both sides have to work well with each other.
If you need a prototype, it can be done, but maybe not by the larger manufacturing shops. Manufacturers are typically not set up like professionals services firms. Anyone who’s worked with an attorney knows the delight of getting a bill for $100 for a 15 minute phone call. Contractors find it difficult to charge for this time because there’s an expectation in manufacturing that this type of information is just part of the sales process. They’re not thought of as consultants, even when providing resources or information on the manufacturing process.
If you have to have a prototype made…
The people willing to do prototype work are typically 1-person shops. But they’re an important stepping stone in the process. You can find them or even call me to refer you. It is very difficult to make money in this type of business, so expect to pay for their time. I can tell you that many, many companies in the sewing business have tried and failed. It’s also not a business model that scales very well. This is research and development cost that should be budgeted for every new product.
Part II covers how to be a good partner and evaluate the contract manufacturing offer.
I’m providing a link to a nice article about the invention of the modern day sewing machine. Elias Howe and Walter Hunt were two men who poured their heart and soul into the invention, only to have Singer come along and make most of the money. I have an antique Howe machine in my office that actually still works.