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Yarn Market
Jim Phillips, Contributing Editor

Orders Still Strong For Spinners

Jim Phillips, Yarn Market Editor

H eading into the third quarter of the year, business continues to be robust for many spinners.

"Orders are strong and our pipeline continues to grow," said one spinner. "For the first time in awhile, we can't make yarn fast enough," said another.

"Orders are plentiful, but still on the short side," a specialty spinner noted. "We are running a lot of different products and spend a lot of time changing. Everybody wants their products tomorrow. Even though business conditions are better, I believe a lot of customers are still waiting until the last minute to place orders. They wait until their shelves are just about clear before restocking."

Numerous spinners have told Textile World over the years that sustained high demand for yarns could bring to light a U.S. capacity shortage. "We've downsized so much over the years, adjusting our manufacturing capacity to market conditions, that we are not in a really good position to produce a lot more yarn," one yarn spinner said in an interview just a few months ago. "If all the business we lost to overseas came back tomorrow, we couldn't handle it. In fact, we probably couldn't handle a third of it."

The recent upsurge in yarn demand had already created some capacity issues. "People are telling me ring-spun yarn is scarce right now," said a yarn sales representative. "Some customers are having to waiting in line for it." 

The upsurge in sales has paved the way for the opening and/or retooling of yarn mills, which will provide additional capacity for the U.S. market. Jo-Mar Spinning, a start-up yarn maker, has plans to hire more than 100 people and reopen the former R.L. Stowe plant in Belmont, N.C. Gastonia, N.C.-based Parkdale Mills Inc. has announced plans to invest $45 million in the former Wellstone plant in Cherokee County, S.C., and will retain 145 former Wellstone employees.

How To Sustain Success?

With all of the success enjoyed by spinners since late last year, several questions surface:
  • How can spinners squeeze every last bit of potential out of the current increase in demand?
  • How can spinners position themselves for sustained prosperity, even when the market, as inevitably will happen, falls off a bit?
These are two distinctly different questions, but share a common answer -- at least according to one well-placed manufacturing consultant.

"The answer, in a word, is innovation," he said. "When most people think about innovation, they do so in terms of product offerings. What product can I bring to market that fulfills an unmet customer need, or features a differentiated property? While this type of innovation is important -- even critical -- for success, I am talking about innovation that goes beyond product development. What I am looking for is what I call institutional innovation. Do you look at new ways of doing things and new ways to add value for your customers in every single area of your company?"

He said innovation permeates every area of a company. "It's not just how you make products, it is how you sell them, how you communicate to customers, how you service the order, how you follow up. Innovative companies look for ways to make it easier for customers to do business with them. It may be as simple as replacing your interactive voice response system with a real, live voice, or at least making it easier to navigate. It may be creating an online customer communications forum, where customers can talk with your company representatives at their convenience about their wants, needs and concerns. It may be as simple as follow-up after the sale to ask the customer what additional needs you may be able to fill."

Institutional innovation, particularly in times of high demand, has the ability to truly differentiate a company, its products and its people. "You might find instances where new companies get to bid for business simply because a usual supplier does not have the capacity to deliver a needed product on time. This creates an opportunity to make a lasting impression. If the new company does things in a way that makes the whole process easier for the customer, the potential is there to keep the business long after the former supplier's capacity issues go away."

He continued, "So my advice to all companies, whether consumer products or business to business, is to look at ways to differentiate every aspect of your business, not just your products. It's the way to build lasting and profitable relationships."

Raw Materials Costs Keep Increasing

As of June 10, spot market cotton prices were up about $.36 per pound over the same time a year ago, creating some pricing pressure for spinners.

"We can pass some of these increases along, at least in part, because of the current business conditions," said one spinner. "We continue to do everything we can to hold down our costs so that we continue to provide good value to our customers."

June 2010


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