Made To Order: the Pros & Cons

Hi team.

I hope you're doing well? Quite a few people I know had a tough week, so I'm sending a big virtual hug your way if yours wasn't great either.

Last week we delved into the world of traditional fashion manufacturing, looking at how legacy systems contribute to overproduction in the industry. Today we're doing a 180 and looking at its cousin: the made-to-order manufacturing model.

But before we talk on-demand manufacturing, let's extend a warm welcome to our newest subscribers: Jessica, Debbie, Nabeela, Hana, Laetitia, Dhosjan, Vicky, Juliette, Karolina, Pia and Sandra. Thanks for joining us!

On-demand manufacturing - the future of fashion?

MADE TO ORDER

The pandemic uprooted the “business as usual” approach in so many ways. One positive side effect however was a rise in eco-consciousness. The fashion industry responded by starting to rethink traditional ways of doing business, with on-demand manufacturing becoming a popular topic of conversation due to its sustainability benefits.

But first, let's define “on-demand” manufacturing. Also known as “made to order” and “bespoke”, manufacturing “on demand” is a process where products are only manufactured when they are ordered by customers. As we saw last week, this is different to traditional manufacturing, which involves producing - in advance - items in large quantities and then selling them on.

LUXTRA's future factory? At least there's a bit of colour! 🧡

ADVANTAGES

One of the biggest advantages of on-demand manufacturing is that it can reduce waste. Fashion United estimates that 30% of all clothes manufactured are NEVER sold. As we saw last week in regard to traditional manufacturing, companies have to make educated guesses about how many units of a product they will sell. Overestimate: they're left with unwanted inventory: bad for business, bad for the planet. Underestimate: they miss out on potential sales. Talk about a delicate balance! With on-demand manufacturing, companies only produce what they know they can sell, leading to less waste and less precious cash tied up sitting on a warehouse shelf.

Another advantage of on-demand manufacturing is that it allows for greater customisation, which many customers LOVE. For example at LUXTRA, we tend to prioritise silver hardware (e.g. chains, buckles, studs, zippers), but some customers really prefer gold hardware and will go elsewhere to find a bag that fits their desires. Making to order would allow a company like ours to offer both colours - and potentially even MORE, such as gunmetal, antique brass, bright gold, rose gold, soft gold etc.

Hardware options! From top: Antique brass, Gunmetal, Silver, Soft Gold.

DISADVANTAGES

One of the biggest challenges of made-to-order is that the per-unit price is often much more expensive. This is because there are higher set-up costs for each individual order. To illustrate with a handbag example: you would cut ONE set of pattern pieces at a time rather than say, 100 in one go (essentially increasing the time investment by a factor of 100), changing colour of thread on the sewing machine, mixing the right shade of edge paint each time… the list goes on. If you've heard of the phrase “switching cost” - well, this is it in a nutshell. So as you can see, the cost charged to the end customer HAS to be significantly higher…

Another challenge is that on-demand manufacturing typically takes longer to be delivered because the product is not sitting on the shelf, ready to be instantly picked, packed and shipped. In our age of next-day or even same-day deliveries, it can feel like a gamble as to whether customers will be “happy” to wait for a product. Some will, for sure, but others… well, they may go elsewhere.

Cutting 100s of pattern pieces in one go. Fashion Insiders write about the benefits.

WHERE DOES LUXTRA FIT IN ALL THIS?

My dream for LUXTRA would indeed be to make products to order. This ticks boxes both financially and in terms of waste-minimisation. Unlike T-shirts and clothing, say (that are already starting to be automated) bags are relatively intricate and time consuming to produce. As a result, at LUXTRA we're approaching this topic from two angles:

1. TESTING & PROCESS-DEVELOPMENT: You may have noticed us asking for more of your feedback in recent weeks. This is part of a process we're trialling that will help us understand which products are most likely to be successful. The dream is to only produce “best sellers” (but that's a hard goal to hit) but we're seeing if we can develop a streamlined testing process.

2. SMALL BATCH, UK-BASED PRODUCTION: we've been manufacturing in Italy since 2017 in relatively small batches (between 20 and 50 units per SKU). Over the past months however, we've explored working with an east-London based manufacturer who would allow us to be much more agile in our manufacturing approach. We've just received our first prototype back from her studio. It needs more work but it's promising and really, really exciting. Stay tuned!

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FLUFF BALL OF THE WEEK: Dogstar Foundation

@Dogstarfoundation

Today we bring you this cutie, a stray dog in Sri Lanka. The fantastic team at Dogstar foundation keep a close eye on stray dogs and cats, giving them food and medical care. If you look closely you can see a triangle cut out of their ears. This means they have been spayed or neutered, which is such an important part of helping to humanely reduce the population of stray animals. I met the team at Dogstar in December and if ever I sell LUXTRA, I'll probably move to Sri Lanka to help them carry out their fantastic work.