A Report on our Industry

Written by Mike Todaro, Managing Director, AAPN

In the following report, we took a look back at 2015. The content proves what we all know – this net works. 2015 was our best year ever. In 2016, we look over the horizon, beyond what everyone can see to those strategies that will make this YOUR best year.  

The 21st Century Factory
2015 was the year AAPN detailed “The 21st Century Factory”, including publishing an article of that title in The Sourcing Journal on Dec 28, 2015. The format of the article tracked to the chapters of the AAPN ASIA/AMERICAS REPORT CARD: knowledge of the industry; verticality; speed; cost; ease of doing business; product development; sustainability; and risk. The 21st Century Factory responds to the trends of fewer basics; more fashion; smaller orders; faster cycles; more styles; and  greater flexibility. Now the question we tackle as a supply chain is do retailers have the right management for the 21st century?

The next China is not a where, it’s a how
This 2015 quote from PVH’s Bill McRaith drives our agendas for 2016. For example, at our December Leadership Forum in Nicaragua, Rick Horwitch said, “We survived the Giant Sucking Sound of NAFTA so let’s stop talking about China. Stop talking about TPP. Talk about consumers and how you drive speed in the supply chain, taking the focus off of legislation and putting it on calendar compression”. Kurt Cavano added thoughts that, “what Zara did was change the math, changed the equation of production and sourcing (creating fast fashion)” and his admonition that, “we all need a Direct to Consumer strategy”. Kurt added, “There is a convergence of forces, and its not TPP. Pay attention or get swept away.

Fashion-Streaming
Following a trip to Italy touring AAPN member Miroglio Group and to Switzerland to visit Sensient, we published the article It’s Not A Color, It’s an Esthetic. It was about the high speed printing of fabric with new advanced ink jet innovations. It was during this tour that we realized we could not do Zara-like ‘fast fashion’ but that with this technology, we could get into the business of ‘fashion-streaming’. We created a new phrase! It perfectly described what AAPN factory members TexOps and New Holland are doing with sublimation fabric printing, adapting to design thinking, going to customers with designs and collections. During our tour of Asia, Philip Poel of AAPN member Under Armour described this as, “getting in front of customers as a supply chain and detailing how you can help with proven delivery and exciting products as a trusted supply chain team”. 

The Travel
We logged tens of thousands of miles of travel all over the world. The most significant trip was to Shanghai, Hong Kong and Taipei. In Shanghai our panel of members described the explosion in the market for activewear. In Hong Kong we met for 6 hours with dozens of Hong Kong-based sourcing executives under the conduct of the GAFTI (Global Apparel, Footwear & Textile Initiative) organization committed to product safety, compliance and environmental standardization. In Taiwan we saw a trade show packed with ink jet technologies bring one week turns for entire bolts of fabric. We also were on the highest level panel of Taiwan, Vietnam, Korea plus PVH and Tom Travis for a major ‘big picture’ discussion of future trends and power shifts in sourcing. 

The ‘Story’
The way AAPN has put the entire chain together is what sets us apart from other organizations. You meet people you would never otherwise meet – not just your suppliers and customers but their suppliers and customers. As our May speaker Seth Godin put it, “The Connection Economy is not based on how efficient your machine is but who trusts you, who is connected to you, who cares about what you are going to do next. The most valuable places are where the connections are made. That is the magic of AAPN:...that what you sell is the chain; the information; the trust; the network. Remember Metcalf’s Law – the power of a network goes up with the square of the power of the people in the network”. In fact, one member asked us to speak at a retreat of their entire staff. We described the 21st Century Factory. They responded by writing, “We all appreciated the fact that you talked about the relationships between the suppliers and manufacturers. The "larger picture" presentation at dinner was informative and showed where the business is evolving. Having specific examples of new ventures was excellent”.

The Americas
It has become clear that AAPN is, by default, the network that has organized the Americas industrially, and we are known for that worldwide. Both Colombia and Peru approached about running a program in their respective nations that would introduce 21st Century Factory innovations to their industrial base. In Nicaragua in November, Mike Todaro was on a panel at the annual meeting of all this hemisphere’s Free Zones. While here, Mike was invited along with Scott Vaughn of Rocedes and 5 other executives, to spend an hour at the residence of President Ortega. He specifically discussed the TPP legislation with Mike along with his views on trends in the apparel industry.

The Press
In May, one of our speakers, Johnnie Rush, vice president of Retail Innovation, HSN Inc., said, “it’s no longer about the brand, but the stand”.  As Jim Borneman of TextileWorld wrote, “His presentation on innovation of product, marketing and retail relationship development was more of a dissertation than presentation”. So, we decided to take stands. Our articles on Liztex in Guatemala and Sensient/Miroglio in Europe were published in TextileWorld. Within days of our article about the 21st Century Factory we received comments from a CEO in Pakistan who read it. In addition, we started our own webinar series, one on the Report Card with Infor and another with ProColombia.  

The Meeting
May 2015 as our largest meeting ever, 185 execs from over 120 companies. Jim Borneman wrote, “I went to an AAPN meeting and a conference broke out! Miami was like graduating from high school and moving on to college. The meeting really was about ideas of innovation and change. It was the first time in memory that AAPN reached outside of the industry to learn and garner ideas. Keynote speaker Seth Godin — a world-renowned author of marketing and management books, TED speaker, and widely followed blogger — spoke on a simple subject, change. He bought amazing insight into what AAPN really is and how companies need to break out of the “industrialized” mindset and move to a new place that embraces change. Be a disrupter. Very interesting commentary for an industry that often does it this way because its always done it this way.”

Networking
Seth Godin said in May, “Sue and Mike, you are clearly a tribe in this room”. Harvard Business Review’s most frequent and repetitive article is about the value of networking. Woody Allen put it best when he said, “80% of success in life comes from just showing up”. One member told us about Nicaragua, “.... the meeting paid for itself on the shuttle bus ride over. I got to bond with a prospect I’ve been after, so we now have something to build on”.  Randy Harward of Under Armour once put it so well, “The AAPN offers this group nothing but themselves, and no one should see it any other way.  It's not an organization providing anything other than the opportunity to meet and think and solve issues together.”

What’s Next?
2016 will build on these topics driving our May 15-17 Annual Conference in Miami:
  • > Fashion-Streaming
  • > Direct to Consumer
  • > Fabric Innovation
  • > Flexibility
  • > Technology/Software