The Story of Stuff - Annie Leonard [87]
Here’s lean manufacturing in play: like so many other well-known brand retailers, H&M contracts with the cheapest suppliers available, mostly in Asia and Eastern Europe, where it leverages its size to push wages ever lower and timelines ever shorter. It uses lots of suppliers simultaneously, which reduces the risk should one factory fall behind schedule and makes it easy to break off relations with one in favor of another without disturbing the flow of product. It’s constantly scouting for factories that undercut existing suppliers, prepared to jump without any sense of loyalty to the previous relationship.48 Trade protection laws, tariffs, and quotas also affect which suppliers and manufacturing locations H&M chooses. H&M’s speed and trendiness, meanwhile, has to do with its distribution machine. Many retailers of clothing (and increasingly also electronics, toys, and other items) reduce time in the supply chain by importing what are known as “greige goods.” These are partially prepped and assembled pieces produced overseas in the lowest-wage factories (think undyed fabric roughly precut for sleeves or torsos but not yet sewn together). Greige goods are shipped to factories close to the retail stores to be finalized, which could mean being given the neckline or sleeve length or specific color that consumers are snapping up that week.49
In the United States, greige goods are usually brought by ship from Asia and then trucked from ports to assembly and distribution centers, and from there to stores. To keep the whole supply chain running, an enormous information technology brain and nervous system keeps track of the various suppliers, inventories, orders, means and routes of transport, weather, traffic, labor available for shipping and handling, etc. This IT system is under constant refinement, which, although an expensive endeavor, pays off by making distribution swifter every day.50 Flip back to the section on the impacts of producing my one laptop computer to get an inkling of what the true costs of an IT system of this magnitude must be.
When consumer interest points to a certain trendy color or cut, H&M responds nearly instantaneously and floods their stores to meet the demand (that’s the lean retail piece). Dara O’Rourke, who tracks this so closely that he calls himself a “supply chain geek,” told me that trendy clothing stores used to have five distinct fashion seasons: each actual season (spring, winter, summer, fall), plus vacation. Now some retailers offer up to twenty-six distinct fashion “seasons,” which means that each “season” is just two weeks.51
Every H&M store is restocked daily, while high-volume stores can receive as many as three truckloads a day.52 It is a constant mad rush getting those clothes in the back door and out the front door, with each sale automatically sending data back to the factories as to what’s hot. Even reading about the speed of their business makes me feel anxious; it’s like retailers on crack. I mean, really, what is all the rush about? Don’t we get more joy out of things like reading a great book or enjoying a meal with friends than from spending our money on this week’s hottest clothes? Does wearing last month’s or (gasp) last year’s T-shirt really make such a difference? H&M and many consumers clearly believe it does.
H&M is an extreme example of the hypervelocity of today’s distribution systems. As fast-fashion consumers get addicted to the ever-changing offerings that blare at them from TV and movies, store windows and ads, H&M is only to happy to keep supplying the Stuff. We’ll see many of the same economic drivers with other products and retailers.
Amazon
When Internet shopping was just beginning, a lot of people thought this development would be good