TABLE OF CONTENTS

Volume 2, Issue 3, Summer 2002 "Financial Challenges in the Textile and Apparel Industry"
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RETAIL PERFORMANCE IN U.S. APPAREL SUPPLY CHAINS: OPERATIONAL EFFICIENCY, MARKETING EFFECTIVENESS AND INNOVATION

Marguerite Moore
University of South Carolina, Columbia

The profitability of retailers is growing increasingly important as apparel supply chains become integrated. The current research focuses on retailer profitability in the U.S. apparel retailing sector by examining the effect(s) of different strategy approaches on firm level performance. Specifically, operational efficiency, marketing effectiveness and innovation are examined for their influence on operational and financial performance. Findings suggest that operational efficiency (alone) and marketing effectiveness combined with innovation positively influence performance in the domestic retail industry. Implications are presented for theory and practice.

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OUTLOOK FOR THE U.S. SHORT STAPLE YARN INDUSTRY

Erin Dodd and William Oxenham, Ph.D.
North Carolina State University

While it is possible to use historical data to predict the general trends that will be followed both in yarn manufacturing technology and production, this approach has several inherent dangers. Particular problems are related to 1) preferences associated with geographical location and markets, 2) short term impact of changes in specifications and/or markets, and 3) changes in trade agreements. This paper will survey current trends in staple yarn production and prices in the U.S. and internationally. It will furthermore review the present status of different spinning technologies and indicate likely areas of development.

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MICHIGAN APPAREL AND TEXTILE MANUFACTURING INDUSTRY:
CHARACTERIZATION AND NEEDS ASSESSMENT

Young-A Lee, M. Suzanne Sontag, & Ann C. Slocum
Michigan State University

The purpose of this study was to (a) identify characteristics of the Michigan apparel and textile industry; (b) determine the manufacturers' perceived needs with respect to making their firms more competitive than at present; and (c) provide criteria for action, i.e., for the identification of strategies that universities can employ to help firms succeed and remain competitive. Data from County Business Patterns, Michigan 1999 were used to characterize the Michigan apparel and textile industry. The largest segment of the industry was North American Industry Classification System (NAICS) 314 Textile Product Mills, followed by 315 Apparel Manufacturing, and 313 Textile Mills. Many firms were located in the southern region of Michigan, especially in the southeast, had less than 20 employees, and produced a wide variety of products. Using two rounds of a needs assessment survey, questionnaires were sent to Michigan manufacturers listed in directories and classified under Standard Industrial Classification (SIC) 22 and SIC 23 (the system used by publishers at that time). The industry subsectors analyzed were based on the new NAICS. Descriptive statistics and qualitative analysis of open-ended responses were used to analyze the data collected in this study. Firms have been facing various internal and external challenges with regard to production technology, labor and management, marketing, and finance. Six main needs categories in order of rated importance were: (a) product development, (b) organization and management, (c) technology and communication, (d) marketing and international trade, (e) human resources, and (f) environmental issues and sustainability. The important specific needs in each main category and the important criteria for the identification of strategies are discussed. The impact of transition from the SIC system to NAICS on the characterization of the apparel and textile industry in Michigan and future research needs are also discussed.

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SUB-SAHARAN AFRICA: POTENTIAL PRODUCTION SOURCE FOR TEXTILES AND APPAREL?

Aaron McRee and Nancy L. Cassill, Ph.D.
North Carolina State University

As globalization continues, textile and apparel firms have many opportunities to source from areas located throughout the globe. Recently, the Trade Development Act of 2000 has brought light to two regions of the world, the Caribbean Basin and Sub-Saharan Africa. This study will concentrate on the sub-Saharan region and examine if the sub-Saharan African region can be a potential source of production for textile and apparel firms. This study has found that certain countries such as South Africa and Mauritius have the potential to have competitive textile and apparel industries.

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MODELING THE ESTABLISHMENT OF AN ELECTRONIC JOURNAL IN TEXTILES AND APPAREL

Balachandar Jagannathan M.S., Michelle Jones Ph.D., Nancy Cassill Ph.D.
North Carolina State University

The first issue of the electronic Journal of Textile and Apparel Technology and Management (http://www.tx.ncsu.edu/jtatm) was launched in October 2000. Critical to the success of this electronic journal was the establishment of an infrastructure including technology and management components - both are necessary for a successful e-journal. Rogers' Model of the Innovation-Decision process (1995) was used as the conceptual framework, as this e-journal is considered an informative innovation in the textile and apparel industry. The study documented the process of establishing the electronic journal and the importance of a feedback loop to provide inputs for future journals.

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Michelle R. Jones, Ph.D. and Helmut H. Hergeth, Ph.D.
Department of Textile and Apparel, Technology and Management
College of Textiles, North Carolina State University

This preliminary study of the use of experiential learning reports the use of the Income/Outcome™ financial game for students taking courses in textile marketing, accounting, and finance. With the increased need for students to have a practical understanding of business concepts prior to entering the job force, educators are looking for inventive application for students to view these concepts in a deeper dimension. A discussion of the impact on critical business factors is provided.

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PRODUCTIVITY IN INDIAN APPAREL INDUSTRY: PARADIGMS AND PARAGONS

Rajesh Bheda, Professor
Garment Manufacturing Technology Department
National Institute of Fashion Technology, Hauz Khas, New Delhi, India

Labour costs are fast increasing in India and other Asian countries. To retain it's competitiveness, Asian apparel industry will have to pay increased attention to productivity improvement. The 1960's and 70's witnessed major research initiatives on apparel productivity in Western countries leading to a considerable improvement. The Asian apparel industry, however, shows much lower productivity performance. Studies have shown that the productivity performance of an average Indian apparel factory is one of the lowest in Asia. This paper discusses the productivity level in apparel manufacturing in India, the factors associated with productivity in Indian apparel industry and the scope for improvement.

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Dr. James R. Giermanski, Professor and Director, International Business Studies
and Dr. Peter Lodge, Professor, Department of Sociology
Belmont Abbey College

This article looks first at the purposes and benefits of the North American Free Trade Agreement Transition Adjustment Assistance (NAFTA-TAA) program. Additionally, we note the method of application and the criteria for eligibility for these benefits. The second part of the article considers data on textile industry closings and layoffs provided by the North Carolina Department of Commerce, and data on TAA petitions filed by North Carolina textile companies, worker groups and unions, provided by the U. S. Department of Labor. We find that there are inconsistencies in the data from these two sources and find that almost 70% (68.8%) of closings and layoffs reported to the State of North Carolina are not followed by an application for TAA benefits. We conclude that the effects of NAFTA on layoffs and closings in the textile industry is difficult to assess. The number of applications for TAA benefits do not appear to support the notion that NAFTA has had a profound impact on the textile industry. If NAFTA has, in fact, had such an impact then either the State of North Carolina is not fulfilling its obligations under the law of informing workers and companies of the benefits available or companies are, for whatever reason, failing to file petitions for the benefits which might retrain their former employees. Finally, we suggest that the substantial number of job losses in the textile industry in North Carolina might also be related to the exposure to free trade after decades of protection.

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MANAGING ERRATIC DEMAND:
THE MULTI-CHANNEL MANUFACTURING APPROACH

Dennis J Kulonda
University of Central Florida
Dept Of Industrial Engineering And Management Systems

Contemporary cellular approaches to the development of manufacturing architectures based upon lean manufacturing concepts are often hindered or prevented by the lack of a smooth regular demand for products. This is frequently the case in apparel manufacturing where demand is erratic because of the high variety of end items and the fickleness of fashion markets.

Multi-Channel Manufacturing (MCM) is an approach to cell development, which examines first the market channel requirements and configures cells based upon common customer service requirements. This paper describes the MCM approach and presents an application study in the apparel industry. Working through the case example, the paper describes the application of three MCM principles in seven specific application steps. The resulting revised system provides better customer service and reduced inventories albeit at some potential sacrifice in direct labor efficiency. Like other cellular designs, refinement of the system is a continual process. The paper illustrates trade-off's and extensions of the system to improve efficiency and performance. It has immediate applicability to apparel manufacturing.

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ENTERPRISE RESOURCE PLANNING IN TEXTILES

George L. Hodge, Ph.D.
North Carolina State University

A survey on the application of enterprise resource planning (ERP) systems in the textile and apparel industry was conducted. The survey identifies software packages that are used and linkages to applications such as e-commerce. The barriers to system implementation and factors considered in selection of software are described.

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Gary A. Raines III

The surge in imported textiles and apparel, specifically cotton textiles and apparel, has been attributed in large part to the increased appreciation of the dollar and the resulting relative price decline of foreign goods imported into the United States. The objective of this paper was to study exchange rate patterns relative to the U.S. dollar of countries that are major cotton textile and apparel trading partners with the United States and to determine the impact and strength of correlation between exchange rates and the rate of growth in cotton textile and apparel imports from these countries into the United States. Findings suggest that although changes in exchange rates are a significant factor, changes in the growth rate of the gross domestic product (GDP) may be more important for explaining the variation in import volume.

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100% COTTON MOISTURE MANAGEMENT

Cotton Incorporated, Cary, North Carolina

Moisture management often refers to the transport of both moisture vapor
and liquid away from the body. Moisture vapor can pass through openings
between fibers or yarns. In the case of cotton or other hydrophilic
fibers, the fiber can serve as a buffer by absorbing moisture vapor and
adding to the comfort properties of a fabric. This study is an example
of ongoing research and development at Cotton Incorporated related to
moisture management. Results indicate that it is possible to create a
whole spectrum of performance properties on 100% cotton for different
activities in a wide range of environments.

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MANAGING INNOVATION TO ADDRESS FINANCIAL CHALLENGES IN THE TEXTILE INDUSTRY*

C.A. Rusinko, School of Business Administration and
C. M. Pastore, School of Textiles and Materials Technology
Philadelphia University

This paper addresses the idea that innovation is a major key to competitiveness and financial success in the textile industry. It presents a framework-called the technological community-that can increase the probability of successful introduction of innovation, new technologies, new products, and new processes. The technological community can be applied in companies at multiple levels, and includes multiple stakeholders both inside and outside of the company (e.g., managers, employees, customers, suppliers, regulators, lobbyists, etc.). Recommendations for company decision-makers are included.

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Joan Anderson, Ph.D., Department of Apparel, Merchandising, and Interior Design
Washington State University

Antigone Kotsiopulos, Ph.D., College of Applied Human Sciences
Colorado State University

As the economy has tightened, retailers have been challenged in recent years to be more strategic in their planning. They struggle to find answers to:
· Who can I consider a loyal customer?
· What kind of marketing strategy is most likely to increase sales?
· What can customer-purchasing patterns reveal about improving inventory control?
· What is the most effective way to manage customer relations to increase revenues? (Rabinovitch, 1999).

With the exponential growth in the amount of data being collected, improvements in technology, and research in machine learning, retailers are now able to reduce the ever growing difficult and complex decision making process by recruiting the efforts of data mining (Barry & Linoff, 1997). Data mining is a computerized technology that uses complicated algorithms to find relationships and trends in large data bases, real or perceived, previously unknown to the retailer, to promote decision support. Currently being utilized by such retail giants as Federated Department Stores, Nordstrom, and Wal-Mart, Inc., data mining is touted to be one of the greatest technologies to hit the retailing industry this decade (Rabinovitch, 1999). The purpose of this study is to critique data mining technology in comparison with more familiar analytical tools for strategic decision making by small to medium size retailers. The context for this study includes current and future industry applications and practices for research performed in data mining applications within the retail sector.

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