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Not-so smooth operations

Heath E. Combs, Carole Sloan -- Home Textiles Today, May 12, 2003

As the entire consumer products landscape is buffeted by the SARS epidemic, deflation (now officially acknowledged by the Federal Reserve), a mood of general ennui on the part of consumers, the economy and war, everyone is scratching their heads to find something to perk up consumers.

SARS by itself is having an enormous impact on the production of goods offshore. As American manufacturing moved more and more quickly offshore, great plans were detailed as to how this would be a seamless process — how U.S. know-how would be translated to the factory processes across the ocean. And, of course, there would be armies of Americans virtually commuting to the offshore facilities.

Flash forward to today. Many of these grand plans have been put on hold. Americans are either not traveling at all, or traveling on a severely restricted schedule.

What this means on a manufacturing level is that there is big-time potential for quality degradation. (Translation: Lots of stuff coming in close — but not on quality target.)

Without their physical presence on site at the manufacturing facilities, many U.S. suppliers privately admit that quality levels already are being affected.

As each week goes by with fewer companies having intense interaction at the manufacturing level, consumers will be offered merchandise that increasingly is not up to the expected standards of minimum quality.

Adding to this piece of the equation is what is now recognized as true deflation, which is affecting the way consumers think about making a purchase.

Whether clothes or bedding — or anything else — consumers now have additional reasons for not buying. If you add merchandise that is repetitive in look, quality that can be questionable and pricing that could go down week by week, one wonders what will incite people to buy.

In home textiles, consumers are continually bombarded with price-only events — many with no discussion of style, quality and raison d'etre for buying.

If suppliers and retailers don't get together to make this business more enticing to consumers, it won't be deflation — but recession.

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