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Closing the gaps in the textile supply chain

February 1st, 2021 / By: / Feature

A new area of focus for Value Vinyls is its Visiontex USA fabrics. The Visiontex outdoor mesh fabric range includes Visiontex View 85 (pictured here), Visiontex Plus 94 and Visiontex Ultra 99. The fabrics are designed for window, patio and other outdoor screening applications. Photo: Value Vinyls Inc.

The COVID-19 pandemic has increased textile supply chain pressures, requiring companies to adopt creative strategies to keep materials and products moving. 

by Pamela Mills-Senn

With many moving parts, the textile supply chain requires hiccup-free involvement from entities up and down the line to ensure it functions properly. But with something so complex, the chain is often buffeted by factors beyond its control, leaving fabric manufacturers and their end users vulnerable to disruptions.  

Even before the COVID-19 pandemic, there were already challenges within the textile supply chain, with many pertaining to past and present government policies. Consider Value Vinyls Inc., a Grand Prairie, Texas-based supplier of industrial textiles for markets such as shade and awning, blinds, medical and athletic. According to Randy Busch, president and owner, pre-COVID-19 supply chain issues were negligible, mainly resulting from occasional port or rail glitches. The company was able to contain problems because of its in-house logistics team, long-term offshore manufacturing partnerships and other alliances. But trade policies were another matter.

A Gehring-Tricot Corp. employee inspects medical fabric for defects, such as holes, dirt or contamination. The inspection process is important for any fabric, but especially so when the end use is medical. Photo: Gehring-Tricot Corp.

“After the 301-Tariffs were implemented, we saw a lot of importing from China pulled and moved to other countries,” says Busch. “The trade policies, in particular the 301-Tariffs, created a difficult time in our industry. I personally went to Washington to protest them since they impacted the manufacturers in the U.S., while not punishing finished goods coming from China.”

For Skip Gehring, president and CEO of Gehring-Tricot Corp., a Dolgeville, N.Y., supplier of highly engineered warp and circular knits and stretch wovens, supply chain problems started in the late 1990s and early 2000s with the free-trade agreements, which put many domestic raw materials suppliers out of business when production began moving overseas. Gehring says the U.S. lost around 75 percent of the domestic mills, a situation that made it more difficult for his company to obtain yarn. 

Anticipating the trouble to come, Gehring says Gehring-Tricot Corp. transitioned to highly engineered fabrics because that raw material is still domestically produced.  

He regards the newest tariffs and their higher duties on overseas raw materials favorably, as well as the renegotiating of the North American Free Trade Agreement (NAFTA), saying both have increased the demand for U.S.-produced fabrics. Factories remaining in the U.S. have seen their orders for raw materials go up, while Gehring says his company’s business has grown about 19 percent over the last two years.

“However, our end users are facing longer lead times and are also carrying less inventory,” he adds. “So the stress levels have gone up all along the supply chain a gazillion percent.” 

Then and now

Enter the pandemic. Because of uncertainty around demand, raw materials providers are keeping much less inventory than in the past, Gehring explains. Before COVID-19, lead times to obtain raw materials were around two to four weeks. Now, lead times are six to eight weeks and in some cases 12 weeks.

The shutdowns meant that only those deemed essential could remain open. Although for Gehring, 80 percent of his customers fell into this category, others weren’t so lucky.

“There were many nonessential end product manufacturers that went out of business. Furthermore, consumers have been buying much less,” he says, mentioning, for example, sports uniform purchases by schools and colleges. “Therefore, manufacturing companies that have survived the pandemic have seen their business volumes dramatically decrease.” 

Gehring-Tricot Corp. stocks sample rolls of different fabrics in order to send cuts of those fabrics to potential new customers. Shown here are sample rolls of athletic apparel fabric. Photo: Gehring-Tricot Corp.

The tariffs had also extended lead times and created shortages, says Jeff Bennett, president and owner of Focus Sales & Marketing Group LLC, a Tigerville, S.C.-based company specializing in nonwoven and woven fabrics and associated supplies. He explains that when the tariffs hit, a “massive influx” of orders returned from overseas to U.S. manufacturers. In some cases, this helped fill “idle capacity,” but it also sometimes restricted how much customers could order. 

The pandemic exacerbated the concerns, with fabric imports limited because of shutdowns in countries of manufacture, Bennett says. Then, the exports of products that could be utilized for personal protective equipment (PPE) within those countries were prohibited. At the same time, U.S. manufacturers were contending with an influx of PPE-related orders.

“The non-PPE markets were starting to recover from the U.S. shutdown, and products that were normally imported were now thrust upon the capacity of U.S. manufacturing, which was already full,” he says. “U.S. manufacturing capacity having been filled has forced customers to forecast and issue orders into 2021, or look for alternative materials or other suppliers.”

Inventory shortages haven’t hit every supplier. Scott Fisher, president and CEO of Fisher Textiles Inc., says his company didn’t experience any related supply chain issues. Located in Matthews, N.C., the company supplies fabrics for digital printing, offering a range of polyester knit and woven fabrics prepared for dye sublimation and direct print. Because it holds a sizeable inventory and schedules orders six months ahead with vendors, Fisher says the company was “well-prepared” to maintain the product flow.

Before the pandemic, its largest markets were fabrics for trade shows and retail. Now, Fisher says the company is seeing a demand for specialized PPE mask/barrier materials and basic signage. On the other hand, with more people confined to home, Craig Yokeley, executive vice president at Glen Raven Custom Fabrics, Glen Raven, N.C., says demand is rising across its markets. Although welcomed, the scale has required some adjustments. 

“It’s important to recognize that at the start of the pandemic, many customers and suppliers across the industry shut down,” Yokeley explains. “Businesses then reopened at once, with no real advance notice or forecast. Consumers are now spending more on their homes and outdoor activities, creating new demand and extending the outdoor season well beyond what we’ve seen in previous years.”

One of the newest offerings from Glen Raven is Sunbrella® Horizon, an engineered synthetic leather fabric designed for use in both indoor and outdoor spaces.

Yokeley says Glen Raven accelerated its supply chain production in May, keeping its facilities operating while protecting worker health and safety. The company is also working with its supply base to expedite materials and production.

“Industry-wide changes have created additional challenges, including where to purchase and produce, as well as tariff adjustments that affect the global trade process,” he says. “Across industries, production processes are shifting, with an emphasis on diversifying and restructuring supply chains to meet customer demand. Like most companies, we’re experiencing new challenges that provide opportunities for flexibility and improvement.” 

Scarcity and shortages

It is unlikely things will change anytime soon. Instead, the textile industry must contend with some stark realities and come up with workarounds. For example, where companies once were able to gauge customer need by reviewing previous usage, for now, this history no longer applies.

Scarcity and price increases are currently an issue due to the production of PPE materials, worsened by periodic COVID-19-related warehouse and factory shutdowns, says Busch. Additionally, booking ocean freight in the months ahead can no longer be undertaken with confidence, thanks to vessel and container shortages, he adds.

“Arrival ports for vessels worldwide have been closed or at reduced capacity, and there have been missed sailings,” Busch says. “There have been rail bottlenecks and chassis shortages. All of these delays have a significant impact on the supply chain. If you aren’t in a strong position with a flexible supply chain and the ability to adapt quickly, these delays can be catastrophic. 

“We’re also starting to see major domestic freight carriers announcing new higher pricing for 2021,” he continues. “This will be difficult for businesses struggling to recover from reduced business during the pandemic.”

The risk of supply chain disruptions is inevitable as manufacturing moves more toward just-in-time inventory and production practices, says Yokeley, adding that mitigating these disruptions requires research and communication, providing transparency all along the supply chain.

The fabric’s stain- and fade-resistance properties make it particularly useful for marine applications, as shown here. Photos: Glen Raven Custom Fabrics.

Companies can reduce their chances of experiencing supply chain issues by forming strong, collaborative partnerships with their suppliers, says Busch. Don’t overlook the role freight forwarders and third-party logistics (3PL) service play, he cautions.

“They’re a major part of the chain and this is where the biggest successes and greatest failures can happen,” Busch says. “Ensure your forwarder is a good fit for your business. If there are cracks in your supply chain, they will only become greater during difficult or high-pressure times like this pandemic.”

Bennett doesn’t see the situation easing anytime soon; demand will continue testing current capacities. Consequently, manufacturers must factor in longer lead times. Forecasting to ensure orders are ready when needed will be imperative, and companies may need to place multiple orders with future ship dates. They should also consider exploring secondary suppliers of essential raw materials, he advises, and identify alternative products that might be used in case of a grave supply chain disruption.

“This pandemic has proven there is a need for a blend of offshore-supplied and domestically supplied products,” Busch says. “The blend percentage is still developing. While there have been difficulties, the U.S. fabric industry has been surprising in the agility it has displayed in response to skyrocketing demand. We’ve seen creativity and cooperation to ensure that manufacturers and customers have the fabrics needed to keep their businesses going.” 

Pamela Mills-Senn is a Long Beach, Calif.-based writer. 

SIDEBAR: The pandemic’s impact on trade

Sara Beatty is principal of Whitehaven Trade Advisors, Washington, D.C.; Auggie Tantillo is principal of SRG & Associates in Wilmington, N.C. Both companies provide government consulting services and trade analysis to U.S. manufacturers and associations. They work with the United States Industrial Fabrics Institute (USIFI) and the Narrow Fabrics Institute (NFI) divisions of IFAI on their government relations activities to ensure that trade agreement rules and programs offer U.S. manufacturers sufficient protection from foreign competitors. We spoke to Beatty and Tantillo about the current state of the textile supply chain and what may be ahead.   

What has been the impact of U.S. trade policies in general on U.S. textile manufacturers?

Beatty: U.S. textile manufacturers compete on one of the most unbalanced economic playing fields of any industrial manufacturing segment. U.S. trade policies over the last several decades have contributed to the problem by offering expanded access to the U.S. market while failing to secure reciprocal opportunities for U.S. exports or to appropriately respond to unfair foreign trade practices. As the ever-expanding U.S trade deficit in textiles and apparel indicates, the U.S. industry continues to be undermined by our global competitors—namely, Asian countries that often grant limited access to their own markets—that use every unfair advantage to grab market share at the expense of U.S. manufacturing jobs.

Tantillo: Buy-American laws like the Berry Amendment and the Kissell Amendment strengthen the domestic manufacturing base. However, continuous work has to be done preserving Berry each year in the National Defense Authorization Act process. And outside of Berry and Kissell, the rules are very weak. There are over 100 countries that essentially qualify as “American” under the Buy American Act that applies to textile purchases by agencies outside of the DoD [Department of Defense], the Transportation Security Administration and the Coast Guard within DHS. [Department of Homeland Security].

How might the pandemic affect America’s global trade relationships?

Beatty: Under a “Buy American” Executive Order issued in early August, the U.S. Trade Representative [USTR] has been tasked with renegotiating our international obligations under the WTO [World Trade Organization] and free-trade agreements to exclude essential medicines and medical countermeasures and inputs, including PPE, from the list of products where we grant foreign manufacturers equivalent access to domestic procurements as U.S. manufacturers. As of this writing, USTR is waiting on this product list to start the renegotiation process. Assuming textile-based PPE is included and there is follow-through with the initiative, the executive order could result in more meaningful buy-American preferences for domestic-made products versus the hollowed-out version of “Buy American” that exists today.

Tantillo: This is a critical time to be at the table advocating with Congress for your interests. While the format will likely be a little different, take advantage of programming offered by IFAI like the USIFI/NFI Annual Advocacy Day in the spring to have your voice heard in the D.C. policy arena.