Current Challenges for Garment Manufacturers

Have you ever wondered about the most common challenges faced by garment manufacturers at present? As a garment manufacturer, there’s a lot one needs to consider to stay on top of the most common challenges – after all, in an increasingly difficult market, ensuring your business has the necessary steps in place to overcome these issues is vital. Here, we look at some of the key challenges faced by garment manufacturers and how these might influence their business.

Key Challenges for Garment Manufacturers

As with any business, there are numerous critical challenges being faced by businesses in the modern world, and it is vital to keep these in mind. While 2023 is set to offer plenty of amazing opportunities for garment manufacturers, the future is not entirely in the green, and there are several critical challenges that these manufacturers need to tackle to future-proof their operations.

1. Supply Chain Issues

One of the biggest challenges many garment manufacturers have faced in recent months and is likely to continue this year is supply chain issues. Indeed, in many cases, supply chain issues have already plagued many garment manufacturing businesses, and with what we have seen as of late, there is no surprise that these issues are continuing to be a problem.

Of course, supply chain issues’ impact on garment manufacturing businesses is extreme, and this is well worth considering as part of a business’s planning procedures. And, while everyone wants to minimise the level of disruption to their businesses, there is some limit to what many firms can do to offset supply chain issues, which often crop up unexpectedly and without much forewarning.

As present, it seems likely that supply chain issues will continue to plague garment manufacturing businesses for many months to come. This perhaps begs the question: is it time to shift away from a just in time manufacturing model and invest in new material storage facilities to help future-proof your garment manufacturing business?

2. Inflation

Another massive issue for many garment manufacturing businesses is the role of inflation. Indeed, in addition to the difficulties people have already been facing with supply chain issues, inflation compounds these issues even further.

Inflation means that materials cost significantly more, eating into the business’s profit margins. Moreover, for garment manufacturing businesses looking to expand their operations, inflation can make it much harder to take loans. And, of course, rising inflation means rising wage costs, making the cost of hiring staff to help with garment manufacturing even more costly.

Unfortunately, this is one of those challenges where businesses can really do nothing much about it. With that being said, it’s well worth considering that inflation can offer a few potential opportunities, and making the most of these opportunities may offer a valuable option to help boost your brand through these tricky times:

- Make the most of rush buying with customers looking to buy before inflation rises further.
- Focus on enhancing efficiency to show your customers that your business is looking for ways to keep costs lower.

3. Rising Costs

Keeping costs lower can seem incredibly difficult when you’re trying to offset the ever-rising costs of production faced by garment manufacturing businesses. Not only is the cost of raw materials growing incredibly quickly, but there are also many other significant costs that could influence the cost of production.

Notably, rising wages and seemingly unstoppable energy bill increases have all been placing a huge amount of pressure on garment manufacturing businesses.

Unfortunately, even the best shopping around won’t necessarily save you much money in this regard; there’s not necessarily anything you can do to offset this without major changes to your normal operating processes.

However, business can still take some steps to reduce the cost of production to cope with increasing costs. One of the easiest ways to cope with rising costs is by embracing larger economies of scale if your business can afford to do so; for example, buying raw materials in bulk could lower the costs associated with purchasing materials.

In addition, it’s well worth considering whether you could further cut costs by investing in new efficiency-focused equipment and machinery, which could increase the outputs of your business or otherwise lower the amount of manpower required.

4. Lower Profit Margins

Due to the many different issues that garment manufacturing businesses are facing, it’s perhaps unsurprising that one of the biggest challenges firms are facing is lower profit margins. Of course, the challenges associated with lower profit margins are clear: making a good income for the brand can be hard.

Without increasing the costs of your products or significantly decreasing the cost of production, there’s not a whole lot that you can do. However, while you can’t directly increase the profit margins on your products, it is possible to increase the number of sales your business makes through clever marketing strategies.

Defining your business’s key USPs and working on them can really help in promoting a garment manufacturing business’s overall sale, thereby increasing the overall profits (even with lower profit margins).

5. Increasing Competition

There’s a huge amount of potential in the garment manufacturing field – but while this is great news for aspiring businesspeople, it’s not entirely good news for existing brands. Indeed, if a garment manufacturing business has been facing new competition from young brands, this can undeniably a major source of worry too.

More competition means more choices for your customers. This is, of course, a potentially good thing for the general population – but it means that your business will hold a smaller share of the market than before. And, naturally, a smaller market share can mean far fewer sales for your business as well.

So, how can a business handle the threat of increasing competition? Well, the first thing that one should do here is simple: embrace it. While many businesses see competition as a negative, it’s not always a bad thing. Not only can additional competitors help promote your products indirectly, but this can offer exciting opportunities to help your business grow. Indeed, having a competitor can be a simple way to motivate and inspire your garment manufacturing business to grow.

Secondly, there is no need to be afraid of competition from other brands, if you have an already-established business because your reputation should be enough to set you apart from the competition. Therefore, having new competitors isn’t a bad thing, and with a positive mindset and mentality, your business can gain from its own reputation.

6. Growing Consumer Demand for Sustainability

The awareness towards sustainability is rapidly growing in many different fields, and for garment manufacturing businesses, this is no exception. Indeed, with the ever-increasing demands for sustainability from consumers, looking for new ways to reduce the environmental impacts of your actions is crucial.

So, what are the options in this regard? Well, there are numerous ways that business can work towards sustainability, from using more sustainably grown materials to reducing emissions during the production processes and more.

Though there are countless different options for providing sustainability, no single option is necessarily better than any other. As such, it’s important for all garment manufacturing businesses to consider the impact of their own actions in terms of environmental effects. Overcoming these limitations can hugely boost your business’s reputation among customers, giving you a USP over other firms.

Of course, it’s also vital to consider here that sustainability is more than just a matter of how materials are sourced. It needs to be ensured that processes are focused on sustainable goals at every stage. This means reducing waste, ensuring any waste is handled in a manner that doesn’t cause additional pollution, and so on.

Thus, there’s a huge amount for the fashion industry to consider here, and brands that can nail this key skill – reducing emissions and improving sustainability – will potentially have a brighter future.

7. Reduced Discretionary Spending

Unfortunately, while inflation has meant that many people’s wages have gone up, it doesn’t necessarily translate to a greater amount that people are left with to spend after paying their bills. And, while garment manufacturing businesses work in the essential niche in many cases, a large amount of the fashion industry is catered for through non-essential purchases. As such, the amount of discretionary spending available can play a huge influence on this.

So, if customers are spending less on non-essentials, it’s likely that they’ll also avoid spending out on anything but the basics. While this may prove valuable for discount garment manufacturing businesses, it could be a negative trend for firms that largely rely on luxury spending. As such, it may be worth tailoring the collections to focus (at least a little) on year-round, affordable styles. This simple distinction could help future-proof the business to account for the reduced discretionary spending too.

8. Lack of Talent

As a final challenge that’s undeniably been plaguing many businesses from within the garment manufacturing industry, it’s worth looking at how a lack of talent might be impacting your business.
Recent studies suggest that the desirability of working in the garment manufacturing field has fallen – and this is having a significant knock-on impact on brands looking to hire staff. Whether you’re in need of factory workers, designers, or anything in between, this can be a real problem for keeping the business running.

It’s not just the overall job appeal that’s a problem here. Part of the problem also comes down to the lack of job flexibility. After the pandemic, more and more workers are demanding the opportunity to work from home – something many roles within the garment manufacturing field just can’t offer. As such, the challenge of attracting top talent is becoming ever more pronounced.

That’s not to say that talent isn’t out there, though! However, it may be important for businesses to revise the hiring processes to ensure any jobs are appealing to new staff. And, if you still continue to struggle, don’t be afraid to look at ways to automate your processes to reduce the need for new staff.

Key Routes Into The Future

Despite the above mentioned challenges, the future may still be very bright for garment manufacturing businesses as there will be plenty of opportunities. Undoubtedly, many brands are likely to buckle under the pressure of it all – but if you have the reserves and tenacity to pull through the present difficult period, there could be numerous excellent options to really grow your brand and flourish accordingly.

2023 is set to be a turbulent year, there’s no doubt about that – but do your best to hang in there, as the rewards could be excellent.

Looking Ahead

There’s no doubt that at present there are numerous key challenges for garment manufacturers, and it is not likely that these challenges will be going away at any time soon. With this thought in mind, it’s crucial to consider the best options available to overcome these challenges. After all, while every business is unique, there’s no single strategy that’s ideal for future-proofing your business. Still, with a little forward thinking and focusing on the main upcoming challenges, garment manufacturers may stand better chances of successfully wading out of the current tough situation. If your brand can find the strength, confidence, and enthusiasm, there could be excellent opportunities waiting ahead.