Lisa Anderson, president of LMA Consulting, participated in a panel discussion on tariffs in the garment industry. The panel discussed the current status, expected tariffs, implications, and strategies for success.

98% of the garment industry products are imported. Textile manufacturing requires a wide array of machines categorized into those for fiber preparation, yarn creation, fabric construction, and finishing. There are many types of machines including the following: cotton gins, spinning frames, looms, knitting machines, dyeing machines, and cutting machines. Manufacturing clusters are common to support interconnected manufacturing of fabrics, buttons, trim etc. located close to one another. Thus, there are many clusters in Asia and specifically China. In fact, China has vertically integrated to minimize the coordination, collaboration, and cost in addition to using low-cost labor, therefore dominating the garment industry.

In addition to answering questions on the garment industry and tariffs overall, the panel discussed strategies for mitigating the impacts of tariffs. For example, proactive companies are pursuing backup sources of supply, diversifying their supply chains, and moving to regional supply chains. It is not a significant interest for the U.S. to produce garments, and so it is likely to move to Latin America. For example, they will build on the capabilities in Mexico, Brazil, and Columbia. In addition, at a minimum, companies will diversify away from China to India, Vietnam, and Bangladesh. 

In addition, we discussed advanced technologies such as 3D printing (additive manufacturing), robotics, and automation which would dramatically reduce the labor cost component in producing garments. There should also be a focus on predictive processes such as SIOP (Sales Inventory Operations Planning) and advanced planning and forecasting. Refer to our recent article on advanced planning strategies to learn more. Gain insights from a diverse panel on tariffs by watching the Columbia GD x World Salon Tariffs and Their Impacts: How tariffs are reshaping and disrupting the garment industry Fireside Talk Series event. 

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