Fortune magazine argued in a recent article that the challenge today is figuring out how to deliver value across silos in a different way – silos within your company, along your supply chains and in the part of the world where you work. And the key, they said, was to learn, share and repeat – that this is hard, disruptive and there is no EASY BUTTON to getting it done. This is exactly what our meetings are – tipping silos into pipelines.

The three major benefits to the 160 in Miami were networking, networking and more networking. After our president Kurt Cavano set the meeting tone, the next two hours that I spent slowly and carefully introducing every company and letting them express their talents and issues meant the networking started in earnest at the first coffee break.

Our keynote talk and discussion was led by Robin Lewis author of THE NEW RULES OF RETAIL. Robin argue that the supply chain in the room was the engine and drive train and that retail was the body. He said retailers need to lift the lid and look under it more often and study the chain, as this meeting did for him.

We drilled into the supply chain through 4 layers: that everyone competes as a supply chain; that we had a room full of world class suppliers; that within them we had world class supply chains in the room highlighting one in El Salvador called Environmental Valley; and that this very chain had in fact developed and were announcing their own brand.

Tom Travis took us on an exhaustively detailed journey through the world of global competitiveness and shifting legislation. The number of charts he used was unbelievable but clearly backed his conclusions.

Thanks to Robin, Walter Wilhelm, Kurt Cavano, Rick Horwitch and others, we enjoyed interactive panel and ‘virtual panel’ debates with retailers, brands, factories, spinners & mills, trim, logistics and services and, spontaneously, even sustainability. I am especially thankful to Nikhil Hirdaramani for showing his slides on sustainability in Sri Lanka and sharing the ‘joint venture’ blueprint that Marks & Spencer invested in with them there.

The smartphone app that Sue Strickland created and is refining with the help of David Springett of Isotope was a massive hit. Our plan is to give every member a smartphone app they can give customers so they can activate our sourcing network from anywhere anytime.

We decided on more AAPN events in New York, Los Angeles and the DR-CAFTA region and plans are progressing there right now.

And finally, using our own meeting intern, Alex Overholt, a polymers major at GaTech, we tackled a concept of how to help kids get hands on in our industry. Jeanna Peifer is taking the lead on this project.

For slides of the event and a list of who attended, go to our website. And to see the amazing video on Environmental Valley, go to http://www.aapnetwork.net/aapmembers/Textiles-Opico/Video.cfm

Mike
Mike Todaro, Managing Director AAPNetwork
OFFICE: 404.843.3171
CELL: 404.931.9689
http://www.aapnetwork.net

At the 2012 annual meeting of the American Apparel Producers’ Network (AAPNetwork) in Miami Beach May 6-8, a video was shown. The idea for it came up at a meeting we held w/ 25 supply chain leaders from 3 nations in El Salvador in March.

We coined the name ‘Environmental Valley’ to describe a literal valley in El Salvador where a number of our members had invested over a quarter of a billion dollars to build a supply chain city specific to synthetics activewear. Eight companies – Yarn (CS Central America and Unifi); Fabric (Darlington and Pettenati); Trim (GCMoore); and Factories (APS, ProDept and TexOps) - pooled their time and money to produce the video this email links to below.

At our meeting in Miami where the video premiered, Pettenati, the Brazilian producer of the finest synthetic textiles in the world, shared several numbers that further show the value of the message:
..they were recognized as the #1 company drawing business visitors to El Salvador
..in just a few short years, they today service 65 customers from El Salvador
..for 60% of these customers, it was their first time sourcing from Central America
..95% of what they make had never been produced in the region prior to their investment there

The video shows you Korean-Americans, Venezuelan-Americans, US-Americans, Brazilians and Salvadorans who have truly come together as a business network. Not shown are the nearly 200 other organizations in the AAPNetwork who supply to, source from or produce within the ‘Americas’.

Back in 2001 when we opened our membership specific to Central America, most factories there just assembled garments. Most did not cut but rather received piece goods. THAT has changed as you will see for yourself on

We truly ask you for your comments after viewing and, if you are a brand or retailer, welcome the opportunity to visit you and introduce you to an ‘Americas’ many in your company have no idea exists.

Mike
Mike Todaro, Managing Director
AAPNetwork - American Apparel Producers’ Network
network of suppliers and suppliers of change since 1981
OFFICE: 404.843.3171
CELL: 404.931.9689
http://www.aapnetwork.net

Smith Logistics International Inc.
10800 NW 97 Street, Suite 102
Miami, FL 33178
305.953.4100, ext 350
www.smithlogistics.net

Igort del Haya, President
igort@smithlogistics.net
305.345.7756

George Gutierrez, Manager
george@smithlogistics.net
305.953.4100, ext 393

The Smith Group provides importers and exporters with integrated, multi-modal logistics services through all major US ports. The Group comprises five operating divisions, which jointly provide seamless solutions:

NEW HOLLAND APPAREL
494 West Broad Street
New Holland, PA 17557
USA, Honduras, Nicaragua
717 354 2306
New Holland Apparel is a full package supplier of sewn products for the active and sleepwear markets. Our production facilities are located in Honduras and Nicaragua with main offices and pattern making in Pennsylvania.

Warren Hackman, warren@nhapparel.com
President
Phone: 717 354 2306

Annette Radcliffe, annette@nhapparel.com
Vice President
Phone: 717 354 2306

But the concept of etiquette is still essential, especially now—and particularly in business. New communication platforms, like Facebook and Linked In, have blurred the lines of appropriateness and we're all left wondering how to navigate unchartered social territory.

At Crane & Co., we have been advising people on etiquette for two centuries. We have even published books on the subject—covering social occasions, wedding etiquette and more.

Boil it down and etiquette is really all about making people feel good. It's not about rules or telling people what to do, or not to do, it's about ensuring some basic social comforts.

So here are a few business etiquette rules that matter now—whatever you want to call them.

1. Send a Thank You Note
I work at a paper company that manufactures stationery and I'm shocked at how infrequently people send thank you notes after interviewing with me. If you're not sending a follow-up thank you note to Crane, you're not sending it anywhere.

But the art of the thank you note should never die. If you have a job interview, or if you're visiting clients or meeting new business partners—especially if you want the job, or the contract or deal—take the time to write a note. You'll differentiate yourself by doing so and it will reflect well on your company too.

2. Know the Names
It's just as important to know your peers or employees as it is to develop relationships with clients, vendors or management. Reach out to people in your company, regardless of their roles, and acknowledge what they do.

My great-grandfather ran a large manufacturing plant. He would take his daughter (my grandmother) through the plant; she recalled that he knew everyone's name—his deputy, his workers, and the man who took out the trash.

We spend too much of our time these days looking up – impressing senior management. But it's worth stepping back and acknowledging and getting to know all of the integral people who work hard to make your business run.

3. Observe the 'Elevator Rule'
When meeting with clients or potential business partners off-site, don't discuss your impressions of the meeting with your colleagues until the elevator has reached the bottom floor and you're walking out of the building. That's true even if you're the only ones in the elevator.

Call it superstitious or call it polite—but either way, don't risk damaging your reputation by rehashing the conversation as soon as you walk away.

4. Focus on the Face, Not the Screen
It's hard not to be distracted these days. We have a plethora of devices to keep us occupied; emails and phone calls come through at all hours; and we all think we have to multitask to feel efficient and productive.

But that's not true: When you're in a meeting or listening to someone speak, turn off the phone. Don't check your email. Pay attention and be present.

When I worked in news, everyone was attached to a BlackBerry, constantly checking the influx of alerts. But my executive producer rarely used hers—and for this reason, she stood out. She was present and was never distracted in editorial meetings or discussions with the staff. And it didn't make her any less of a success.

5. Don't Judge
We all have our vices—and we all have room for improvement. One of the most important parts of modern-day etiquette is not to criticize others.

You may disagree with how another person handles a specific situation, but rise above and recognize that everyone is trying their best. It's not your duty to judge others based on what you feel is right. You are only responsible for yourself.

We live in a world where both people and businesses are concerned about brand awareness. Individuals want to stand out and be liked and accepted by their peers--both socially and professionally.

The digital landscape has made it even more difficult to know whether or not you're crossing a line, but I think it's simple. Etiquette is positive. It's a way of being—not a set of rules or dos and don'ts.

So before you create that hashtag, post on someone's Facebook page or text someone mid-meeting, remember the fundamentals: Will this make someone feel good?

And remember the elemental act of putting pen to paper and writing a note. You'll make a lasting impression that a shout-out on Twitter or a Facebook wall mention can't even touch.

FLOGGING fashion is like selling fish, as Amancio Ortega, the founder of Inditex, likes to say. Fresh fish, like a freshly cut jacket in the latest color, sells quickly and at a high price. Yesterday’s catch must be discounted and may not sell at all.

This simple insight has made Inditex one of the world’s two biggest clothes makers. (The other, H&M Hennes & Mauritz of Sweden, is about the same size.) From its base near the Spanish fishing port of La Coruña, Inditex’s main brand, Zara, has conquered Europe.

The Inditex model, celebrated in many a case study, goes like this. Other fashion firms have their clothes made in China. This is cheap, but managing a long supply chain is hard. By the time a boat has sailed halfway round the world, hemlines may have risen an inch and its cargo will be as popular as geriatric haddock.

Inditex, by contrast, sources just over half of its products from Spain, Portugal and Morocco. This costs more. But because its supply chain is short, Inditex can react quickly to new trends. (TODARO: last I knew, and I shared the agenda w/ Zara’s CEO several years ago in Barcelona, they keep $30 million in greige fabric on hand for this very reason) Instead of betting on tomorrow’s hot look, Zara can wait to see what customers are actually buying—and make that. While others are stuck with unwanted stock, Inditex sells at full prices.

Sales have quadrupled to €13.8 billion ($19.1 billion) since the firm’s initial public offering in 2001. Inditex’s operating profits are high and have been more stable over time than its peers’. The firm now faces two challenges. Can it go global? And will its “fast-fashion” model be copied, or bettered, by others? (TODARO: profoundly unlikely. You see, Inditex comes at this by controlling operations. They are really factory guys, not merchandisers. How many key executives in US retail ran factories?)

For now, Inditex is dependent on Europe: 70% of its sales in 2011 were there. Sales in Spain, which accounted for 25% of revenue, have stalled. Europe is stagnant and ageing. Inditex needs new markets.

Pablo Isla, who took over as chairman from Mr Ortega last summer, has big plans. “Going into China is like beginning again in Europe for us,” he says. Announcing its annual results on March 21st, Inditex said it opened 179 new stores in Asia in 2011, 156 of them in China.

A global brand needs a prominent shop window. On March 15th Inditex opened a huge outlet on Fifth Avenue in Manhattan, having bought the store for $324m last year. (Even after adjusting for inflation, that is more than the Louisiana Purchase of 1803, in which America bought all or part of 15 states.) The aim is not merely to sell to New Yorkers, but to convince shoppers everywhere that Zara is hip.

Inditex’s formula has not worked everywhere. Zara has struggled in America, for instance. (TODARO: in the US, if you have not seen something on TV several dozen times, it doesn’t even make your vocabulary, much less your brand sense. It’s amazing how often, when I ask, the person has never heard of Zara. This is their downside to not advertising IN OUR MARKET) It sells trendy cuts and slim fits. Outside the biggest cities, Americans have long preferred classic, roomier clothes (though this may be changing). Chinese office ladies like Zara’s slim fits more, says Fraser Ramzan of Nomura, a bank. Iria Campos, a Zara designer, says Chinese women choose pastels to flatter their pale skin rather than the stronger colors Europeans prefer; but otherwise they have surprisingly similar tastes.

Still, China will not be easy. Zara’s clothes are far pricier than local rivals’, whereas in Europe they are relatively cheap. And because of the distance from La Coruña, Zara must charge more in absolute terms as well. So it has to convince Chinese shoppers that it is luxurious enough to justify the price tag. Its Chinese stores are packed, but its success is more fragile in China than in Europe, says Luca Solca of CA Cheuvreux Research in Paris. It must watch the quality of its products.

And expect hurdles. Last year China’s consumer watchdog attacked Zara for poor quality. The firm denies that it was singled out for political reasons. But the Chinese government typically targets foreign firms first. Last week McDonald’s and Carrefour were pilloried for minor lapses. (TODARO: actually, relatively, their products are of low quality. In a program I was on at the Demming School, a Nobel Prize candidate Econ professor there argued that Zara has redefined quality from being the shirt to being the shopping experience in the store. Radical idea. I saw a men’s shirt hanging in the Budapest Zara with an open shoulder seam. Rumor is their shirts fall apart on the 7th wash. I do not know this for a fact.)

At some point, Inditex may have to adapt its business model for Asia. (TODARO: do you know how seldom an article is written, a discussion starts or a meeting opens by first saying, you know, this is the business model we are talking about here? There’s only one story in this industry, the difference is in the execution, the ownership, the control of the operations and knowing all of the costs) As its Chinese sales grow, it will make sense to have both logistics and design in China, says Mr Solca. Last year rumors flew that Inditex might buy Giordano, a Hong Kong-based version of Gap, an American clothes chain. Both companies denied it.

Inditex currently has a dozen or so designers in Shanghai and around 250 at home in La Coruña. (TODARO: not said is the vast data bank of patterns and markers they draw upon to give them 3 week cycle times from “let’s try this” to “thanks, just got the garment here in the store”. In most cases, it is not that there is a break down between ‘design’ and production. It’s a no man’s land between them – at the cost to production and therefore speed and margin.) That will surely change. Creatively, Europe is “rather dead”, says José Luis Pavia Cervera, a former executive at Inditex who now works for C&A, a mid-market retailer. In the future, China will set the trends, he reckons. (TODARO: he needs to be seriously challenged on this assumption, make that ‘opinion’.)

Several of Inditex’s rivals are struggling. In February the Benetton family moved to de-list their fashion group to revamp its business model. Benetton went international in the 1980s but overexpanded and lost direction. Its shocking ads (the Pope kissing an imam, etc) no longer thrill. America’s Gap, another retailer with global ambitions, is ailing. Both brands have lost market share to Inditex and H&M.

The genius of Mr Ortega’s model, says a former Inditex executive, is that it picks up on every season’s trends and is never associated with any one style, which could fall out of fashion. Alone among its peers, it does not advertise. Instead, it relies on chic locations and shop-window displays. Rivals, however, argue that Zara is in fact associated with something: a gilded age of throwaway fashion. Now that tight belts are in, women may hesitate to buy a top and wear it only twice.

Inditex is trying to develop new brands. Bershka, the most successful, was launched in 1998 and has sales of €1.3 billion. But the firm remains dependent on Zara, which generated 65% of sales in 2011.

The change at the top appears to have gone smoothly. Mr Isla was Mr Ortega’s deputy and hand-picked successor. The 75-year-old Mr Ortega remains powerful, however: he still owns 59% of Inditex. He started work in a clothing shop in La Coruña at 13, and has always directed the design, manufacturing and selling side of the business, (TODARO: in other words, operations) while delegating other parts, such as finance and IT. The firm has developed a “schism” between the product side and finance, according to “Zara and Her Sisters”, a recent book by Enrique Badía.

Mr Isla’s background is different. A lawyer, he was chairman of Altadis, a tobacco group, before joining Inditex in 2005. Even now that he is the boss, says a former colleague, Mr Isla “has little to do with the product side of the business”. Mr Ortega is still in charge of that, apparently.

Insiders praise Mr Isla. He has curbed costs. During 2010-11 the firm rolled out a global online-commerce platform for Zara. Were it not for Mr Isla, Inditex would probably not have broken with its bricks-and- mortar tradition so boldly. The company does not release figures, but the online store is said to be thriving.

Nevertheless, insiders worry about the day Mr Ortega really retires. Inditex will need a new muse, some say. Mr Isla retorts that product teams make product decisions (TODARO: and essentially then do the production), and that Mr Ortega’s handover of the chairmanship represented “the complete professionalization of the company”.

Why has no one copied Inditex’s business model? One executive at Gap is said to have answered: “I would love to organize our business like Inditex, but I would have to knock the company down and rebuild it from scratch.” (TODARO: there is so much wisdom in this statement. It acknowledges ‘business models’. It acknowledge the lack of operations talent. It acknowledges the silos and politics within retailers. People who do not know the industry would say he is saying “we need more collaboration”. But he is saying “I am become Zara, destroyer of collaboration, builder of operations knowledge”) The gulf between Inditex and its rivals is bound to shrink, however. Isabel Cavill of Planet Retail, a consultancy, notes that retailers such as Gap and George, a brand owned by Britain’s Asda, are seeking to move production away from Asia and closer to home. (TODARO: Wow. A consultant huh. Baloney. She misses the point. What she SHOULD be saying is they are working to better control operations. In the case of ASDA, she SHOULD have said, “that is why Todaro’s good friend Jack Curran of ASDA is moving to Sri Lanka, because George bought their supplier Gaat and Gaatlanka there”)

As Benetton addresses its problems, it will adopt elements of Inditex’s model, such as the way it frequently updates its collections, says an executive close to the company. Plenty of competitors are poaching the Spanish firm’s people to learn its secrets. “My main task at C&A is to replicate Inditex’s obsessive focus on its products and its shops,” says Mr Pavia, who has hired people from Inditex to help him. (TODARO: Mr. Pavia needs to move to a factory, work there for 6 months, and in the first week, design, cut and sew the shirt he will wear the entire time. They don’t get it. Every company competes as a supply chain. EVERY company. That’s where you get your margin. I have to go now, applying for a job at C&A !!!!) Nothing lasts forever in the world of fashion. Fortunes, like hemlines, can go down as well as up.

The first retailer we highlighted in one of our roundtables was Chico’s and their practice of small, 5,000 garment orders where price was never the issue and they nailed over 50% of their tightly defined target market of 14 million women. Four sizes, no mirrors in the dressing rooms, buyers club, conditioned to buy on the spot and no price sensitivity – at least back then.

Then we had Dov Charney of American Apparel stir our forum up in Santa Monica where he detailed how, by making 100% of everything in L.A., and turning on a dime whenever he felt a shift in color or cut, he was able to open stores anywhere in the world in under 2 weeks and keep them full and exciting.

THEN there was Zara, where I had the fortune to share the agenda w/ their CEO at an IAF meeting in Barcelona in 2006. Their whole approach – cut close to the stores, pay more to make, sell for less than their competitors, churn inventory in days, cut cycles to weeks and generate up to 4 times in profits was mind-blowing.

At a day-long industry program at Colombia University where is was ALSO sitting on the agenda w/ leaders, an Econ professor who was a Nobel Prize candidate broke the code – Zara didn’t advertise, didn’t know merchandising, their stores were blank white, their staff was window dressing, their store managers ruled, any of them could recommend a new garment and the secret sauce was how they controlled OPERATIONS.

Bingo – that is the theme of our meeting May 6-8. Our keynote Robin Lewis calls his book THE NEW RULES OF RETAIL. In his book, in a number of different ways, he keeps sending the same message, that for retailers to generate margin, they must ‘control operations’, the must ‘invest in anything that gives them speed’.

This is an exciting time. For example, I have seen body scanning technology that could well be in over 100 million homes in less than two years, because 20 million homes have that technology literally ‘in-house’ right now in the form of a Kinect box.  Talk about a ‘new concept’. Here’s what I mean.

In 1985, VICS and the UPC code revolutionized retail replenishment. My favorite pair of Levi’s became one specific UPC code for my style, color, size and dimension. Ten or twenty retailers could carry this same jean, this same UPC, capture its sale and drive its replenishment. Same sales data. It’s how they controlled operations that set them apart from one another.

2012? Maybe this is the year that you, and you, and you and me each become our own UPC code, unique not in 4 or 5 variables like jeans, but 300 or 400 like humanity’s body range really is – and maybe its how apparel producers mine, correlate, organize and respond to this data that will set them apart.

Big deal? It is to Zara where, in the last sentence below, they admit that they have “more than 1,000 product design and development personnel ... helping them to respond rapidly to customer demand.” ...... ie, controlling operations.

(THIS is a company that keeps $30 million worth of greige goods sitting around not for just in case or just in time but for just whenever.)

Remember these two words – control ... operations. The reason so few really are masters of them is the general difficulty in mastering these two words – supply ... chain. And what is the background of the new CEO of Apple, Tim Cook? Supply chain.

And what is the background of the new CEO at JCP? Apple Retail - the most profitable and exciting and ‘new’ and triple-dog-WOW experience of any retailer in the US. Do you see the formula? Designer (beauty), engineering (supply chain), (new) retail.

May 6-8, maybe for the only time anywhere in the world this year, we’ll have 200 of you people, from 120 or so companies in, by our count, some 40 links in the chain across the entire chain. THIS is operations. And w/ all that is new in technology, we’re a new supply chain ready for control in partnership with new retailers.

See you there?

Mike
THE MIAMI MEETING May 6-8, 2012
REGISTER: http://www.aapnetwork.net/about/2012-Annual-Meeting.cfm