Competition, Better Management, Shifting Categories Top Issues In Footwear Factory Report

Top Takeaways From FDRA Factory Report
A worker in a shoe factory.
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As footwear brands diversify their sourcing chains, factories around the world are facing new demands and issues according to a report released by the Footwear Distributors and Retailers of America. The annual footwear factory survey asks workers and factory owners to weigh in on the biggest challenges, concerns and trends they’re experiencing.

Not surprisingly, Chinese factories are continuing to adjust as brands relocate business abroad, but the adjustments also bring opportunity. FDRA president Matt Priest shares some top takeaways from the report.

China Becomes A Business Hub

While China is still the leader in the number of exports to the U.S., a number of smaller nations and Vietnam continue to take a bite out of the production volume. That pressure was especially obvious as more than 42 percent of factory owners indicated that competition from other outlets was one of their biggest concerns. Competition was also one of the top listed challenges.

In 2016, the biggest shift for China was that factories were growing more agile thanks to consolidations and shrinking factory sizes. In 2016, only 22 percent of Chinese factories employed more than 1,000 workers. Three years ago, 47 percent of footwear factories employed 1,000 people. Priest said China was becoming a bigger extensions of brands for design, production and managing the manufacturing end of the business as a result.

Workers Want Managers

For the first time, the FDRA survey spoke directly with workers and their supervisors to hear from them on their top issues. While wages and working hours often get the bulk of the attention, one of the key findings from the study was how much factory workers were looking for managers to actually manage the floors.

“We’ve seen that there is a bit of a lack of developed middle managers for factories,” said Priest. “Often it’s people who have been there and are promoted to supervise, and they may be great with the quality and technical side of production, but the HR skills aren’t there.”

Priest said factories would benefit from working on these skills for their managers, which could help lessen the high turnover at many factories. He also said he expected a better supervisor experience could especially benefit Vietnam and stabilize turnover since many workers are locals.

Women, Migrants Still Top Worker List

Factory workers are still largely women. Around 89 percent of Vietnamese footwear workers and 58 percent of Chinese workers are women. In China, the majority of workers continue to be migrant (around 67 percent in 2016).

Vietnam Factories Diversifying

One of the key takeaways of the annual survey was that Vietnam continues to be a growing resource for brands when it comes to sourcing not just athletic shoes, but other categories. With 16 percent of U.S. imports now coming via Vietnam, Priest said the biggest trend was that Vietnam was expanding production to include more fashion, plastic and outdoor styles. “It’s really been driven by the changes in China, and the duty free anticipation coming from TPP,” said Priest.