Onshoring refers to relocating manufacturing operations back to a company’s home country. In this regard, onshoring garment production in Australia represents a shift toward sustainability, quality control, and economic independence. With growing global supply chain challenges, such as the COVID-19 pandemic and political instability, many new Australian fashion brands without experience are reconsidering offshore manufacturing and opting for local production.
Fashion sourcing companies like Deepwear play a vital role in facilitating this shift, helping brands navigate the complexities of onshoring and ensuring that local production meets the high standards demanded by today’s market. By emphasizing transparency, ethical practices, and quality, Deepwear assists brands in building strong, reliable domestic supply chains.
Cost vs. Quality of Onshoring Garment Production in Australia
Onshoring garment production in Australia requires a careful evaluation of cost versus quality, as local manufacturing offers distinct advantages over offshore alternatives. While overseas production in countries like China and Vietnam provides lower labor costs, it often results in less control over quality.
Onshoring allows for greater oversight and more agile responses to market changes. Additionally, producing garments locally aligns with increasing consumer demand for sustainable and ethically sourced fashion, further enhancing brand reputation. This, however, comes with a higher price tag.
Cost Implications:
Labor costs in Australia are higher than those in offshore locations such as Bangladesh, China, and Vietnam. According to IBISWorld, Australian manufacturers face rising labor costs, making it difficult for local brands to compete with the lower production costs offered by international markets. However, these costs are often mitigated by the reduction in logistical expenses and better oversight of the production process. The latter is particularly true when partnering with on-the-ground fashion agencies like Deepwear.
Quality and Oversight:
Onshore production allows for closer supervision, improving overall quality control. Brands that prioritize craftsmanship and precision benefit significantly from local production as it offers them more control over the manufacturing process. In offshore production, quality checks can be challenging due to geographical distance, time zone differences, and communication barriers.
With local manufacturers, these issues are minimized, resulting in higher-quality garments. This is especially important for luxury and high-end brands that rely on the reputation of impeccable craftsmanship. Obviously, having an on-the-ground fashion agency like Deepwear on your team mitigates the challenges associated with offshore production.
Sustainability and Ethics of Onshoring Garment Production in Australia:
Onshoring supports ethical labor practices and sustainability, which are increasingly demanded by today’s conscious consumers. Deepwear emphasizes ethical sourcing and sustainable practices as a core part of its services. By working with local manufacturers who adhere to fair labor practices, brands can enhance their reputations for social responsibility. This aligns with current consumer preferences, as more than 60% of shoppers prioritize sustainability when making purchasing decisions. Local production also reduces the carbon footprint associated with transporting goods from overseas, further promoting environmental responsibility.
Supply Chain Efficiency:
Onshore production simplifies supply chain logistics by eliminating many of the challenges associated with international shipping. Offshore manufacturing is prone to delays due to customs regulations, political instability, and shipping constraints. The pandemic exposed vulnerabilities in these global supply chains, causing significant disruptions in production for many brands. By shifting production onshore, Australian fashion brands can avoid these risks, improving efficiency and responsiveness to market demands.
Economic Growth of Onshoring Garment Production in Australia
Onshoring garment production in Australia has the potential to significantly boost the country’s economy by driving local job creation and fostering growth in related industries. As more brands shift their manufacturing domestically, sectors such as textiles, logistics, and technology will benefit from increased demand, leading to broader economic gains.
The Australian Fashion Council reports that this trend could generate thousands of new jobs, particularly in skilled labor positions such as machinists and designers. Furthermore, local production enhances economic resilience by reducing reliance on global supply chains, making the industry less vulnerable to international disruptions.
Having said all that, there are still many brands refusing to move their manufacturing to Australia, with the main reason being: “Made in Australia is too expensive”.
Job Creation:
One of the most significant advantages of onshoring is the creation of jobs across the manufacturing and textile industries. According to the Australian Fashion Council, onshoring has the potential to generate thousands of new jobs, particularly in skilled labor positions such as machinists, designers, and technicians. This increase in employment strengthens the domestic economy and reduces the reliance on imported goods.
However, skills come with experience and experience comes with time, which is why there are not many experienced workers in Australia left, for the simple reason that there are not many factories left in the country.
Supporting Local Industries:
Onshoring benefits not only the garment industry but also other related sectors, such as textiles, logistics, and design. By strengthening the local supply chain, brands can foster collaboration between different sectors, encouraging innovation and the development of new technologies. Investment in automation and advanced manufacturing techniques can further enhance the competitiveness of the Australian garment industry.
Economic Resilience of Onshoring Garment Production in Australia:
Onshoring increases the resilience of the Australian economy by reducing dependency on foreign manufacturing. This became particularly evident during the COVID-19 pandemic when many brands faced supply chain disruptions due to global lockdowns and shipping delays. Local production ensures that brands are less vulnerable to such external factors, providing greater stability and security.
Growth of Sustainable Practices:
The onshoring movement is closely linked to the adoption of sustainable practices in fashion production. By relocating manufacturing to Australia, brands can more easily monitor and control their environmental impact. Deepwear helps brands navigate this transition by offering expertise in sustainable sourcing and production management, ensuring that garments are produced using eco-friendly materials and processes.
Challenges of Scaling Onshoring Garment Production in Australia
Scaling onshore garment production in Australia presents several challenges, particularly in terms of higher labor costs and limited manufacturing capacity. Australian wages are significantly higher compared to overseas counterparts, making it difficult for brands to maintain competitive pricing.
Additionally, the country’s manufacturing infrastructure is smaller, which can create bottlenecks when scaling production for larger orders. Furthermore, many brands still rely on imported materials, which complicates supply chains and can lead to increased costs and delays.
Higher Production Costs:
The cost of labor remains the most significant challenge for Australian fashion brands. In comparison to countries like Vietnam and Bangladesh, Australian wages are considerably higher. This makes it difficult for brands to compete on price, particularly in the fast-fashion sector. Brands must either absorb these costs or pass them on to consumers, which can affect their competitiveness in a global market.
Capacity Limitations of Onshoring Garment Production in Australia:
Australia’s garment manufacturing capacity is relatively limited compared to countries with established mass-production infrastructures. Many local factories are small-scale operations that lack the capacity to produce large quantities of garments quickly. This limitation can lead to bottlenecks in production, especially for brands looking to scale rapidly.
Skilled Labor Shortage:
A lack of skilled workers in the textile and garment industries poses another challenge for brands looking to onshore their production. Many of Australia’s traditional garment workers have either retired or transitioned to other industries, leaving a gap in the workforce. While efforts are being made to address this skills shortage through training and apprenticeships, it remains a significant obstacle for brands seeking to scale their local production.
Sourcing Materials:
While onshoring brings production closer to home, many brands still rely on imported materials. Australia’s textile industry, although growing, is not yet fully equipped to meet the demands of large-scale garment production. This reliance on imported fabrics can lead to supply chain delays and increased costs, negating some of the benefits of onshoring.
Conclusion & Recommendations about Onshoring Garment Production in Australia
Onshoring garment production offers Australian fashion brands numerous benefits, including enhanced quality control, faster turnaround times, and improved sustainability. By supporting local industries and creating jobs, onshoring contributes to the broader economic growth of the country. However, the higher costs associated with local production and the limitations in manufacturing capacity present significant challenges that must be addressed.
Fashion sourcing companies like Deepwear provide valuable assistance in overcoming these challenges. Through our expertise in sourcing, production management, and logistics, we help brands navigate the complexities of onshoring. Deepwear connects brands with reliable local manufacturers, manage quality control processes, and ensure that production timelines are met.
For Australian fashion brands looking to succeed in the increasingly competitive global market, onshoring presents a viable and sustainable option. By collaborating with experienced sourcing companies like Deepwear, brands can optimize their local production strategies and deliver high-quality, ethically produced garments to their consumers.
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