Cost Versus Costs; is Large Scale Automation a Realistic Option for the Apparel Industry?
Here, FOURSOURCE share their second exclusive piece with WhichPLM, focusing on the potential outcomes of apparel automation. FOURSOURCE is an innovative and unique online platform that creates partnerships between manufacturers and brands, and supports the marketing, promotion, and sales of manufacturers to buyers and brands.
How much does it cost?
What is the cost?
Do these two questions mean the same thing? When it comes to the effects of automation on the apparel industry the answer is quite clearly, no. In this case the term cost has two separate meanings – price and consequences. With that in mind, as they attempt to digitalize, apparel companies should be asking themselves, “is implementing large-scale automation worth the costs?”
Automated apparel manufacturing technology is maturing rapidly due to the efforts of trailblazing companies that are devising solutions that allow machines to better handle fabrics. The companies that offer some of the most advanced solutions at the moment, Sewbo and SoftWear Automation, vary in their disclosures of cost.
Estimates for Sewbo tech come in at over $35,000. This price is derived from the cost of a robotic arm and a sewing machine, but the cost of the software or system used to manage the manufacturing process is not disclosed. SoftWear Automation, however, offers no hint about the cost of its machines, if that is any sort of indication about how expensive they might be.
Whatever the cost of the actual machines or systems may be, any effort by brands or manufacturers to offset the fluctuating cost of human labor will require a substantial upfront investment. The cost of that investment naturally depends on the size of the company and operation, but recent data shows that, across the various industries, the return on investment period seems to be shrinking for automation. And as a whole, the rate of automation across all types of manufacturing is increasing in many major manufacturing nations.
When costs begin to fall, interest in expanding the degree to which the industry can embrace automation will almost certainly increase. It is hard for industry players to look at a reduction in lead times, waste, pollution, and labor costs and say, “no, thank you”. Yet, there are perhaps some areas that may seem attractive but offer some not-so-clear or uncertain risks that everyone should keep in mind.
One such popular idea floating around is that automation can revive manufacturing in countries where labor costs are high. In the current political climate this can seem pretty attractive to brands in western nations that have received criticism for shutting down factories and shifting production overseas. And automation can make it fiscally possible to relocate manufacturing processes “home” or at least closer to their domestic market, but that does not mean that the jobs will return with it.
Any jobs that automated factories generate would most likely be minimal – which is kind of the point – and consist of skilled engineering positions focused on managing the automated facilities. The optics of bringing manufacturing back to a country and then hiring only a handful of high-skilled workers would not have the industry-stimulating effect that people dream of. Such a move could also ultimately make people cynical if manufacturing returns in this manner on a large scale.
That said, for the moment it doesn’t seem as though there will be a concerted effort to relocate large portions of manufacturing processes to automated facilities just yet. Nike and Adidas are experimenting with automated factories that produce customized footwear and apparel items, but by-and-large the industry has continued to rely on cheap, low-skilled human labor.
In fact, some still see cheap labor in developing countries as the future, as rising wages lead to increased competition. Yet, as with every technology, automated garment tech will only get more capable and less expensive, and companies may begin to see greater value in near-shoring manufacturing, if not bringing it home altogether. Brands may view the value of shorter lead times, increase in demand, and greater sustainability as worth the investment and job cuts.
Though in the near-term apparel manufacturing jobs seem mostly secure, that doesn’t mean the future is risk-free. In fact, the ILO classifies jobs in apparel manufacturing in ASEAN countries as at high risk of automation. “High risk” does not necessarily mean the jobs will definitely be replaced by robots, but these risks are no longer theoretical, as at least one manufacturer in India is planning on implementing automated processes that would cut about 10,000 jobs, or one third of the total workforce for the company.
Countries like Bangladesh are especially exposed to the consequences of automation. Ready-made-garments account for a staggering percentage (upwards of 80%) of exports, and other industries could not possibly absorb the 4 million workers employed in garment factories in Bangladesh.
The point of laying this all out is not to discourage companies in the apparel industry from adopting automation. Automation does have the potential to benefit companies, consumers, workers, and the environment. But the process is not as simple as saying, “We’ve installed all this new technology, now the workers just need to shift to other industries.” Companies must be smart about not just economic factors, but also the social factors, as they often overlap. With enough strategizing, any company can turn the entirety of the automation process into something that can generate value.