How made-on-demand manufacturing is transforming the fashion industry

Hear the phrase ‘fashion waste’ and most people immediately associate it with the fast-fashion industry producing products with short lifespans, ultimately destined for landfills. 

However, there is another source of garment waste few think about, a product from the manufacturing process that never leaves the factories. This is known as pre-consumer waste and includes scraps, offcuts, and rejected garments that are discarded during the production stage. These materials often end up in landfills or incinerators, contributing to environmental pollution. 

“Dealing with excess garment waste is incredibly difficult because you have multiple fibres and components, including buttons, zippers, linings and tags,” Christina Dean, founder of Redress and CEO of The R Collective, told Inside Retail in an interview during The Circular Redesign Challenge in partnership with TAL Factory in Vietnam. The challenge is part of this year’s sustainable fashion design competition Redress Design Award, where German designer Nils Hauser was named as the winner with his collection ‘Ex Voto’. 

“An excellent defect rate for mass manufacturing is 0.01 per cent of all the units that they produce might be defective. Imagine there are 100 billion garments produced every year, that means 10 million garments per year will be defective.”

According to the Pulse of the Fashion Industry report by Global Fashion Agenda & Boston Consulting Group, global apparel production is projected to rise by 63 per cent by 2030, from 62 million tonnes today to 102 million tonnes – equivalent to more than 500 billion additional T-shirts. 

Meanwhile, sustainable fashion business models like resale, rental and repair only unravel the post-consumer garment waste problems.  

In the manufacturing industry where people often think of large-scale production, made-on-demand manufacturing is a new buzzword. Industry experts expect made-on-demand to disrupt the fashion industry as one of the major sustainable solutions to garment waste. 

On-demand clothing manufacturing focuses on smaller batches and a very high level of customisation, which means fashion brands can minimise overproduction and reduce the amount of unsold inventory that often ends up in landfills. 

“Made-on-demand is obviously a very unique and new innovation in the production of clothes because a unit is made once it’s been purchased. It’s one purchase, one production, one unit, zero waste in terms of excess stock,” Dean said.  

How made-on-demand plays its role

TAL Apparel has a dedicated made-on-demand manufacturing facility in Vietnam. CEO Roger Lee told Inside Retail: “I would say it’s definitely the future for the industry but not many people think about it yet.” 

Using made-on-demand, a manufacturer can cut an ‘excellent’ defect rate of 0.01 per cent during mass manufacturing just 0.009 per cent, according to Dean. This also means the success rate is almost 100 per cent. 

“From the manufacturing point of view, the made-on-demand model is more expensive,” said Lee. “But it requires a very different way of thinking in terms of how it operates.” 

According to Lee, for retailers, the process of storing and managing inventory involves significant expenses such as rent for the store and warehouse, transportation costs, and labour expenses. By the end of the season, to create space for new merchandise, retailers often have to discount stock by 30-40 per cent to clear out old inventory and minimise losses. 

“In addition, if you’re a brand, you need to pay for all the inventory, so you need to pay us for the goods before the customer buys. It’s negative cash flow.” 

Explaining how made-to-measure works, Lee said that retailers can operate in a store that is 20 per cent less the size of a normal outlet because of lower inventory. Customers can come in and browse through the sample fabrics to choose their desired material. Once they have made their selection, measurements are taken and the order is placed with the manufacturer. This eliminates the need for storing a wide range of sizes and styles, allowing for a more streamlined and efficient store setup.

“From a financial point of view, it’s cashflow positive,” said Lee. “The rent is a lot lower. And then at the end of the season, they don’t have to mark down because they have nothing to get rid of. The only thing they might have left over is fabric in the factory that they cannot sell. Technically, they can keep it and then sell it six months later again because it doesn’t take up any space in their store. There’s no rush for them to always get rid of any markdowns.  

“The cost of manufacturing is more expensive, but your retail price can be maintained well because you don’t have to discount it and you have lower costs operating. It’s also a lot less wastage.”

“The retailer doesn’t sit on stock,” added Dean. “The benefit of made-on-demand is that you radically reduce sampling wastage, you reduce defective garments at the factory level.” 

Meanwhile, in the mainstream fashion market, where consumers typically have little emotional connection with their clothes, consumers will be more likely to keep their customised clothes longer and wear them frequently because the custom-making has created a sense of attachment.  

“There are a lot of people who buy clothes and throw them away because they never really kind of fall in love with them,” said Dean. “Conversely, with the made-on-demand model, there’s a greater stickiness and durability of that garment from an emotional perspective.”

Long way to mass adoption  

While the concept has significant appeal to consumers – and brands – with concern for the environmental impact of fashion, the model is not something suited to all brands to adopt. Due to the high level of customisation, the production of clothes usually takes longer to complete than the traditional model. That poses a challenge for brands that rely on quick turnaround times from catwalk trends to store shelves. 

Additionally, the made-on-demand model requires a higher level of technological infrastructure and expertise, which may be costly for smaller brands to implement. That means that any mass adoption of the model may still be a long way off, especially for brands that prioritise speed and efficiency in their production processes.  

“It’s harder for existing brands to do it than for new brands to do it because it costs more money to make the product,” said Lee. “They already have a warehouse, and huge stores so they cannot shrink all that stuff and save the money to offset the cost of a more expensive product to make.

“However, new brands are making made-to-measure much easier because they start from scratch. They don’t have warehouses. Big brands cannot change their models overnight so it’s going to be a slow process.” 

Dean said the made-on-demand model will suit a particular segment of the market and probably particular product types, such as mid-priced, higher-value pieces like a shirt where fit is important.  

Unlike traditional tailor shops, which can make an average of between 1000 and 2000 custom shirts a year, the made-on-demand manufacturing model can produce 600,000 shirts a year, one piece at a time. And given the development of technology, body measurements can be done via phone and other platforms.  

“I think it’s just a matter of time that made-to-measure will be a bigger part of our business than bulk,” Lee said. 

This story first appeared in the November 2023 issue of Inside Retail Asia magazine.

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