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Vertical production chains: the only way is up
Feature: 3/4/2006

Enlarge Image click hereThese days manufacturing abroad has become standard practice for most major firms. After all, it's hard for the UK to compete with China, where the annual salary for a factory worker can be as low as £500.

But when looking at the bigger picture, it becomes clear that outsourcing production to other countries isn't the answer for every company - there are other techniques that may prove more practical.

The simplest of these is the vertical production model. In this system, every step of garment production is controlled from within the company: the designing of fabrics and garments; the creation of raw materials and their transformation into clothing, and the eventual distribution to the end user.


 


Getting technical
Enlarge Image click hereTo some companies that might sound like too much to handle, but Tilsatec was smart enough to recognise vertical production's potential, and brave enough to implement it.

Tilsatec has been producing industrial textiles for dealing with hazardous work environments for about four years now, but until recently every one of its garments was made elsewhere.

However, about a year ago the company made an important discovery. Simon Havis, technical product manager of Tilsatec, told director-e: "When we started looking at the company, we saw that we could control the supply chain fully.

"That would remove the unnecessary cost and allow us compete very effectively with off-shore manufacturers."

For Tilsatec, this has become a realistic and preferable alternative to joining the crowd flooding in to China: "My view is that there's an unnecessary rush towards offshore manufacture to save a few pounds," said Simon. "Far more money is wasted by not looking at the supply chain and working on supplying direct to the customer."

The gloves are off
Enlarge Image click hereAs a trial, the company began supplying protective gloves utilising its own specialised yarn manufacturing machinery. Needless to say, the trial has had some very positive results - not just financially, but also in terms of productivity and customer satisfaction.

Simon explained: "Other companies create a fibre and then have to find an application for that fibre, whereas we can find out from the customer what they want first and then find the best way to make it.

"If we go to a user who says they're having trouble with spatter, we can come back, create a new yarn and make them a new glove quickly."

This method also means that the company can turn around orders in extraordinarily short times.

Simon said: "For some companies it can often take up to six months to complete the supply chain, from design to distribution to end user, whereas we get a new glove design done in about two weeks."

Made in Britain
Simon also thinks that the new, streamlined production chain will give the company an edge in Britain. He said: "If you had a choice of buying two items of equal value - one made in Britain and one made in China - which would you choose?

Enlarge Image click here"We think that most people in Britain would choose the British gloves - our process means that gloves produced abroad won't be any cheaper, so there's no advantage to buying them over home-grown products."

Expanding the business
With the internally produced gloves looking very successful - the company already has supply contracts and more companies are in the trial phase at the moment - Tilsatec is looking at adopting the vertical model in other areas of its business.

Simon said: "I think we've established a firm foundation here. We are able to provide a better service to end users of the gloves and we are better value for money, and we think that those same principles could work with the fabric sector.

"It does require a substantial investment, not just in increased manufacturing responsibilities but also in the logistics and backup that you need to service end users. But the potential future returns certainly make it worthwhile."

Author: James Wilkinson
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