TOKYO -- Fast Retailing, the company behind the Uniqlo casual clothing chain, has achieved the estimated annual sales of more than 1 trillion yen ($9.27 billion).
However, its goal by fiscal 2020 is to hit sales of 5 trillion yen. To achieve this, success in China, a key production base, will be indispensable.
China is the largest supplier of Uniqlo products in the world -- 90% of its garment were once made at factories in the country. The figure is estimated to have declined to around 70% as Fast Retailing pushes up production in Southeast Asia.
The Japanese company is not closing production facilities in China. Chairman and President Tadashi Yanai said his company does not plan to reduce the number of Chinese factories it uses. Under Yanai's plan, Uniqlo aims to do business with producers worldwide to meet surging demand for the company's wear.
Uniqlo has 70 partner companies operating factories in China, including 10 in Ningbo, Zhejiang Province. The Japanese company recruits experienced, skilled workers and dispatches them to production bases in China.
These workers, who are called takumi, or expert workers, are supposed to ensure clothes are made without trouble and make proposals for production improvements. The scheme has helped increase the competitiveness of the Japanese fast fashion company.
At one of Uniqlo's main underwear factories in Ningbo, more than 100 knitting machines pull yarn from quills and weave smooth textile 24/7 on a large floor with few operators.
Partner factories operated by local management in the city weave cloth and perform other processes for Uniqlo such as dyeing, cutting and sewing. They have proposed a variety of ideas for improving manufacturing processes since they started the production of highly functional underwear in 2007.
One idea was to sheathe knitting machines with plastic covers hung from the ceiling to catch dust. If woven into textile, fiber dust is damaging and can make garments unfit for sale. Although defects used to be seen often, the percentage of rejects has been reduced to almost zero because of introduction of covers for knitting machines and frequent factory cleaning.
An operator of factories in Ningbo started business with Uniqlo in 1997. The factories began with the production of sweatshirts and expanded into making fleeces. In 2004, it built a sewing factory that produces exclusively Uniqlo products. The company now operates factories in Vietnam, Cambodia and Myanmar.
The sales of the Chinese factory operator have also increased in tandem with Uniqlo, rising more than 100% in the last five years.
Uniqlo and partner factories have developed strong working relationships. The manager of the Chinese factory said his staff share Uniqlo's drive and aim to grow together.
Uniqlo's Shanghai production department acts as a headquarters for planning production and establishing quality standards in China. Every Friday, members of the department discuss issues and possible resolutions.
Machinery specifications and fabric colors are among the issues discussed.
Sometimes staff will brainstorm hundreds of potential solutions to emerging problems. If staff decide to review production processes, partner factories are immediately informed and more experienced staff ensure revised processes are implemented.
Uniqlo has achieved the annual sales of more than 1 trillion yen by following the model of appointing partner factories and training staff at them. One factory manager said that his company planned to install more equipment to increase automation down the road.