That complexity means there are secrets behind every label that moved through Tazreen, sewn in by workers earning the equivalent of 27 cents an hour, 6 days a week, packed between rows of sewing machines stacked on floor after floor of a building with exits locked or blocked.
Such conditions were also common in the U.S. until a fire achingly similar to the one in Bangladesh killed 149 workers at New York’s infamous Triangle shirtwaist factory 101 years ago. But today, the globalized economy allows retailers and consumers in First World countries to turn to Vietnamese or Honduran or Bangladeshi workers to do those jobs, a role largely overlooked until a system that runs with formidable efficiency is upended by tragedy.
‘‘You have to remember that there is a problem which we face in a globalized economy, which is that if one country enacts really strict safety guidelines that raise the cost of manufacturing, buyers have the option to take their business elsewhere and, thus far, have demonstrated a tendency to do so,’’ said Josh Green, CEO of Panjiva Inc., an online data platform used by international marketers and producers.
The supply chain’s flexibility makes it particularly well suited for the clothing trade’s repeating cycle of design, order, production, shipment and sale. Apparel companies begin laying plans for new lines of clothing a year before they arrive on store shelves. But creativity quickly gives way to number-crunching, as executives set sales targets and try to figure out which producers can deliver within their required profit margins, Rangarajan said.
Producing overseas requires building in transportation time, usually 6 to 8 weeks for shipments of thousands of pounds of garments to reach the U.S. from Asia. So orders for the next summer season go out in late fall, allowing 6 to 8 weeks to produce cloth and other materials, and another 6 to 8 weeks for production. That explains why the products found in the wreckage at Tazreen, days after Thanksgiving, included T-shirts, children’s floral shorts, and women’s pants in bright pastels.
Competition for those orders seeds intense pressures. When U.S. Ambassador Dan Mozena spoke to Bangladeshi garment manufacturers in June, he recounted a late-night call from the CEO of a big clothing company, anxious that publicity about repeated fires and poor work conditions at factories where his goods are made could defame his brand.
‘‘He said his company would gladly pay more for a Bangladeshi product if it were Fair Trade; his company’s reputation is worth more than saving a few cents per shirt,’’ Modena told the group.
But the pressures at work in Bangladesh, which has climbed to second place behind China among the world’s largest exporters of apparel, continue because it is part of a global production economy with interchangeable components. Making clothes requires relatively low-skilled labor and equipment that is easily relocated or replicated, making it ‘‘uniquely susceptible to geography hopping,’’ Green says.
That gives big buyers of clothing significant leverage. When a major retailer buys a garment, roughly 50 to 60 percent of the costs are for raw materials, 15 to 25 percent is for labor, and the rest is split between transportation, overhead and expenses like import duties, Rangajaran said. But except for the labor, the other costs are largely beyond buyers’ control.
‘‘Continually chasing low-cost labor is one of the big levers you have to pull,’’ he said.
The result is a production system that has rapidly bypassed long-ago ways of doing business, when most clothing companies owned the factories where their goods were made and the workers were on their own payrolls. Now, a company like Wal-Mart or Sean John does not have to own a single factory, and the plants they rely on can change from year to year. The shifting creates the new challenge of keeping tabs on conditions where the work is being done.
That could explain some of the confounding answers that have come this week from companies that produced at Tazreen.
Wal-Mart said Tazreen ‘‘was no longer authorized to produce’’ its merchandise at the time of the fire, although the factory was approved until early this year.
‘‘A supplier subcontracted work to this factory without authorization and in direct violation of our policies,’’ said the world’s biggest retailer, which would not identify the supplier.
Sears Holdings, which also owns Kmart, said it discovered only after the fire that its merchandise was ‘‘being produced at that factory without our approval,’’ leading the retailer to cut ties with a supplier it said was responsible, International Intimates. The chief operating officer of the New York-based lingerie company would not comment. Tazreen’s owner also declined to answer questions.Continued...