For small and medium-sized fashion brands, choosing what type of manufacturing partners and factories to work with is key strategic decision for the success and growth of their businesses. A choice that most successful brands have had to make at some point is whether to work with CMT units or to scale up production and work with a fully-factored partner.
Fully-factored
Fully-factored partners look after your entire order from design through to delivery to FOB (Freight on Board) point. They do everything from design assistance, pattern making, grading, sourcing materials & components through to sampling, bulk production, packing and freight forwarding.
CMT
Cut Make Trim (CMT) units cut the material, make the garment and add the trims, with brands usually sourcing the materials and components themselves. It’s is a good option for designers starting out and brands in their first few years, because they can cater for much smaller order runs and can offer greater flexibility when it comes to materials. Strong tech packs, digital/paper patterns and experience procuring fabrics and managing supply chains all help make this option more efficient and successful.
The 4 key benefits of fully-factored partners are:
1. All-inclusive price
With fully-factored partners, the unit prices might seem higher at the start but they are all-inclusive. You will spend less money on postage, customs and taxes importing components and materials from around the world. These type of factories have departments specifically dedicated to design development, sourcing materials, sampling, importing and logistics and will be more adept at navigating local laws and taxes.
2. Streamlined production process
When working with CMT units, managing relationships with dozens of suppliers and co-coordinating orders across geographies can be a complex and challenging process. With a fully-factored partner, a production manager will usually be given one single point of contact, meaning more cohesion, fewer emails and less confusion. Good fully-factored partners identify potential problems and blockers within production and provide solutions to resolve these issues faster.
With fully-factored partners, all elements of procurement and production are looked after by the factory, which means that production managers can spend less time micro-managing every part of the supply chain and more time on other tasks.
3. Lower carbon emissions
Fully factored manufacturers often source materials and components locally, from their established network of suppliers or if they are fully-integrated, it might even be on site. This means brands don’t need to import labels, fabrics, and packaging from other countries, in turn reducing carbon emissions within the supply chain.
4. Better value in the long term
When producing at scale and looking to increase your margins, if you can reach the minimums dictated by these factories, fully-factored is invariably the most cost-effective and efficient option. A lot of it is determined by what scale you are producing at and what degree of involvement and order management you want. For smaller production runs, local CMT units are a great option and they reduce the risk of tying up cash in unsold stock.
Optimising your supply chain is not something that can be done overnight, plus making the wrong decision can cost your business in time, money and reputation. The pros and cons depend on many factors; the size and complexity of your order, cash flow, the amount of control you wish to have over the order, and how much traceability and transparency you want to have within your supply chain.
At Supplycompass, our focus is helping SMEs scale and work with larger, fully-factored factories abroad. We believe growing brands can make better margins, reduce the amount of time spent managing orders, and ultimately improve supply chain efficiency through working with the right fully-factored partners.
