As the apparel industry evolves post-recession, the industry fundamentals are changing. The Amazon Effect, rising labor costs, growing complexity, and slowing growth make this a very different market than 2010. In Table 1 we show the contrasts in 2010-2016 across the value chain. Note that average growth for apparel retailers for the period of 2010-2016 was 7%, but when 2016 is compared to 2010, growth is down 1%. Margin and inventory performance are in decline and there is a slight improvement in employee productivity. The same trend is true for apparel manufacturers.
Slowing growth. Shareholder activism. Stalled performance. This is today’s chemical industry reality.
Electric vehicles. Autonomous cars. Shared car ownership through Uber and Lyft. While the automotive industry emerged from the recession with the best balance sheet performance of any manufacturing industry, the future poses new challenges.
My supply chain hero is the Average Joe. Who is Average Joe? They are the man or woman in the trenches making a difference. Helping them motivates me as a professional.
After two years of declining operating margins, Household Products Companies rebound in margin in 2016. With the reporting of full year results, the industry trend is clear. The margin improvement is due to a rise in price, and focused cost-cutting programs on labor productivity and sourcing. Note the patterns in the Clorox, Kimberly-Clark, and P&G results. P&G is making the greatest improvement in inventory turns while Colgate enjoys the highest margins.