OEM clothing manufacturer is one of the primary approaches used in the garment industry. But have you ever wondered what OEM actually means? What are the distinguishing features of this method? And where is it popular? Moreover, do the characteristics of this manufacturing type vary across different regions? Whether this approach fits the direction of your business? In this article, let’s find out with Dugarco – A Prestigious manufacturer from Vietnam.

>>>> VIEW NOW: Garment factory in Vietnam high quality and reputable products

1. Understanding OEM Clothing Manufacturing

OEM (Original Equipment Manufacturer) in the apparel industry is a production model where manufacturers create products according to designs and specifications provided by the ordering brand. Unlike ODM (Original Design Manufacturer) – where the manufacturer provides both design and production, OEM focuses on manufacturing according to the specific requirements of the customer. Compared to CMT (Cut-Make-Trim), OEM provides a more comprehensive service, including material sourcing.

A typical OEM production process includes the following steps:

1. Receiving requirements from the brand (including designs, technical specifications)
2. Sample creation and approval
3. Sourcing materials and accessories
4. Mass production (cutting, sewing, finishing)
5. Quality control
6. Packaging and delivery

>>>> READ NOW: The most high-end women’s clothing manufacturer right now

2. Benefits of Working with OEM Clothing Manufacturers

Working with OEM clothing manufacturers brings significant benefits to fashion brands, especially when targeting the US market. Collaborating with OEM manufacturers not only helps optimize costs but also allows brands to focus on their core activities while leveraging production expertise and advanced technology.

One of the main benefits of using an OEM manufacturer is cost efficiency. For example, an emerging fashion brand in the US can save 30-40% in production costs when working with an OEM manufacturer in Vietnam compared to self-manufacturing in the US. This can be attributed to:

• Lower labor costs
• Larger production scale
• Optimized supply chain

When outsourcing production to OEM manufacturers, brands can focus on:

• Product development and design
• Brand building and marketing
• Expanding distribution channels and sales

OEM manufacturers typically have:

• Extensive experience in garment manufacturing
• Modern production technologies such as laser cutting, 3D printing
• Strict quality control processes

OEM manufacturers can quickly respond to changing requirements regarding:

• Order quantities (from small to large)
• Product design
• Delivery times

Many US fashion brands have succeeded using OEM manufacturers:

• Nike: Uses OEM manufacturers in Vietnam to produce shoes and sportswear, helping reduce production costs and focus on R&D.
• Gap Inc.: Partners with OEM factories in Asia to produce clothing for Gap, Old Navy, and Banana Republic brands, allowing them to quickly respond to changing fashion trends.

>>>> CLICK NOW: 14 Eco friendly clothing materials use for fashion sustainable

3. Potential Challenges of OEM Manufacturing

Although collaborating with OEM manufacturers offers many benefits, fashion brands need to be clearly aware of the potential challenges in this process. Understanding and preparing for these risks will help businesses build effective strategies to overcome difficulties and optimize collaborative relationships.

Quality control issues and impact on brand reputation

• Challenge: When outsourcing production to third parties, quality control becomes more complex. Substandard products can seriously affect brand reputation and lose customer trust.
• Solution: Establish strict quality control processes with clear standards, conduct regular factory inspections, and implement AQL (Acceptable Quality Level) systems to ensure products meet requirements.

Intellectual property protection strategies when working with OEMs

• Challenge: One of the biggest risks when working with OEM manufacturers is the risk of designs and ideas being copied or stolen.
• Solution: Sign strict confidentiality agreements (NDAs), register trademark and design protection in target markets, divide the production process among multiple suppliers to limit access to complete product information.

Supply chain dependency risks and mitigation strategies

• Challenge: Depending on a single OEM manufacturer can cause serious disruptions when problems occur such as natural disasters, political instability, or market fluctuations.
• Solution: Diversify supply sources by working with multiple OEM manufacturers in different geographic regions, build contingency plans, and maintain safe inventory levels for key products.

Communication and cultural challenges with international manufacturers

• Challenge: Language barriers and cultural differences can lead to misunderstandings, production delays, and product quality issues.
• Solution: Hire local staff as representatives, use professional translation services, organize regular online meetings, and create detailed instruction documents in both English and the local language.

Managing time and production schedules

• Challenge: Issues such as extended delivery times, production delays, and difficulties in meeting rapidly changing market demands.
• Solution: Establish clear production schedules with specific timelines, allocate time for unexpected situations, and implement real-time production progress tracking systems.

A US fashion brand faced serious quality issues when working with an OEM manufacturer in Vietnam. Instead of terminating the partnership, they sent a technical team to work directly at the factory for three months, establishing new quality control processes and training staff. As a result, the defect rate decreased from 15% to 2%, delivery time was reduced by 20%, and the collaborative relationship became stronger.

>>> FIND OUT MORE: 10+ Most sustainable and men’s eco friendly clothing brands

4. Sustainability in OEM Clothing Manufacturing

The apparel industry is witnessing a powerful shift towards sustainability, especially in OEM manufacturing. American fashion brands are increasingly demanding that OEM manufacturers meet strict sustainability standards, from raw materials to production processes and shipping.

This trend not only meets the needs of environmentally conscious consumers but also helps brands build a positive image and comply with increasingly stringent regulations.

The global apparel industry is experiencing a strong shift from “fast fashion” to “sustainable fashion.” According to recent studies, 80% of global consumers are willing to pay higher prices for sustainable products, especially millennials and Gen Z. Major brands like Hugo Boss, Calvin Klein, and Ralph Lauren are leading this trend by requiring their OEM manufacturers to adopt sustainable practices.

Dugarco and The North Face: Dugarco, an OEM manufacturer in Vietnam, has successfully collaborated with The North Face to produce environmentally friendly clothing. By using organic cotton fabrics and recycled polyester, Dugarco has helped The North Face significantly reduce their carbon footprint. Jackets produced by Dugarco using recycled polyester have helped reduce CO2 emissions while still meeting the brand’s high quality standards.

Sustainable production often comes with higher costs, leading to the so-called “green premium.” Sustainable fashion products typically cost 75-85% more than conventional products, with some categories like fashion and beauty having differences of up to 200%. For example, organic cotton can be 20-30% more expensive than conventional cotton.

However, these higher costs are offset by several factors:

• Higher quality: Sustainable products often have higher durability, reducing the need for continuous shopping.
• Customer loyalty: Environmentally conscious consumers tend to be more loyal to sustainable brands.
• Regulatory compliance: Investing in sustainable production helps businesses comply with increasingly stringent environmental regulations.
• Long-term savings: Although initial costs are higher, sustainable practices can lead to long-term cost savings through energy efficiency and waste reduction.

Adopting sustainability in OEM clothing manufacturing is not just a trend but has become an essential requirement in the modern fashion industry. By integrating environmentally friendly materials, ethical production practices, and carbon footprint reduction strategies, OEM manufacturers can meet the growing market demand for sustainable products while building long-term competitive advantages.

>>>> DO NOT MISS:

• 12 Steps in the must – Have clothing manufacturing process
• Summary of the hottest models’ lightweight jacket 

5. Types of Clothing Categories for OEM Production

In the OEM clothing manufacturing industry, understanding the characteristics of each product category is a key factor in ensuring quality and meeting brand requirements. Each clothing category has its own specificities regarding materials, production techniques, and quality standards. Below is a detailed analysis of common clothing categories in OEM production.

6. Customization Options in OEM Manufacturing

In the OEM clothing manufacturing industry, customization is a key factor that helps brands create unique products that suit their target markets. From fabric selection, dyeing techniques, printing methods to packaging, each element can be adjusted to meet the specific needs of the brand. Below is a detailed analysis of customization options in OEM manufacturing.

Fabric selection is the first and most important step in the OEM production process. Each type of fabric has its own characteristics, directly affecting the quality, feel, and durability of the final product.

• Cotton: The most common fabric in clothing production, cotton is soft, breathable, and has good absorption. Organic cotton is increasingly popular due to its environmental friendliness, reduced water pollution, and use of fewer harmful chemicals. However, cotton requires a lot of water and land to cultivate, and can wrinkle after washing.
• Polyester: A synthetic fabric with high durability, good color retention, and minimal wrinkling. Polyester dries quickly, is easy to maintain, and has a lower cost compared to cotton. However, polyester is less absorbent and breathable than natural fabrics, and has a negative environmental impact as it is produced from petroleum.
• Blended fabrics: Combining the advantages of multiple fabrics, the most common blend is poly-cotton (polyester and cotton). Blended fabrics have high durability, minimal wrinkling, good absorption, and reasonable cost. Polyester-cotton blends are a popular choice for uniforms due to their wrinkle resistance and high durability.
• Sustainable fabrics: Include environmentally friendly fabrics such as Tencel (from oak or eucalyptus pulp), linen (from flax plants), hemp (from hemp plants), and bamboo fabric. These fabrics are increasingly popular due to their lower environmental impact. For example, hemp grows quickly, doesn’t require pesticides, and has a higher CO₂ absorption capacity than many other crops.

Dyeing is an important process that affects the aesthetics and quality of the product. There are various dyeing methods, each with its own advantages and disadvantages.

Labels, hang tags, and packaging are important elements in building a brand and creating an impression with customers. OEM manufacturers now offer many customization options for these elements.

Custom labels: Labels not only provide information about the product but are also a brand-building tool. Common types of labels include:

• Woven labels: Made from fabric, can print or weave logos and brand information.
• Metal labels: Create a premium feel, often used for high-end fashion products.
• Leather labels: Provide a luxurious and unique feel.
• PVC and silicone labels: Durable, waterproof, and can create 3D shapes.

Custom hang tags: Hang tags provide information about the product and brand. Customization options include:

• Paper tags: Can print logos, product information, and barcodes.
• Fabric tags: Create a premium and environmentally friendly feel.
• Metal tags: Create a luxurious and unique impression.

Custom packaging: Packaging not only protects the product but also creates a memorable unboxing experience for customers. Packaging options include:

• Custom paper boxes: Can print logos, brand information, and images.
• Fabric bags: Reusable and environmentally friendly.
• Custom wrapping paper: Creates a unique unboxing experience.

>>>> READ MORE: A Prestigious fashion design studio in Vietnam, good price

7. Technology and Innovation in OEM Manufacturing

The OEM clothing manufacturing industry is undergoing a powerful technological revolution, from digital sampling to production automation and artificial intelligence applications. These innovations not only increase production efficiency but also minimize environmental impact, meeting the growing demands of the US market for sustainability and speed to market.

7.1 Digital Sampling and Virtual Prototyping

Digital sampling is changing the way product development works in the apparel industry. Instead of creating multiple costly and time-consuming physical samples, OEM manufacturers can now use 3D technology to create accurate virtual samples. This process helps reduce design approval time from several weeks to just a few hours, while significantly reducing waste.

3D software allows designers to create virtual garments with different materials and textures, providing realistic images of the final product. Designers can experiment with different fabrics and patterns before committing to a specific design, and preview products on virtual models without actual production.

Major brands such as Under Armour, Coach, Victoria’s Secret, Hugo Boss, Nike, and Abercrombie & Fitch have adopted 3D virtual sampling technology, with many other brands expected to follow in the near future.

7.2 Automation in Clothing Production

Automation is revolutionizing the OEM clothing production process, from fabric cutting to sewing and finishing. Automated cutting machines using laser or knife technology have replaced traditional manual cutting methods, ensuring high precision and minimizing fabric waste. These systems increase efficiency by 30% compared to manual cutting and can cut multiple layers of fabric simultaneously.

In sewing, automated sewing machines and robots are gradually replacing manual labor. Automated sewing machines can perform complex stitching with higher speed and precision, while sewing robots can handle soft, flexible fabrics automatically. These advances help reduce dependence on manual labor, improve production speed, and enhance product consistency.

7.3 Data Analytics and AI Applications in Production Optimization

Data analytics and AI are transforming how OEM manufacturers optimize their production processes. By analyzing historical data and production trends, manufacturers can predict and prevent errors before they occur.

AI is being used to:

• Analyze sensor data to predict when machinery needs maintenance
• Optimize production schedules to increase efficiency
• Forecast demand for more accurate production planning

In clothing design, AI analyzes large amounts of consumer data to identify emerging fashion trends. These insights help brands design products that meet market demands, reducing the risk of overproduction and unsold inventory.

7.4 Blockchain Technology in OEM Supply Chain Management

Blockchain is increasingly being applied in OEM supply chain management to enhance transparency and traceability. This technology creates an immutable record of every transaction and movement in the supply chain, from raw material sources to the final product.

Benefits of blockchain in OEM manufacturing include:

• Improved traceability, allowing brands and consumers to verify the origin and authenticity of products
• More efficient payment processes between parties in the supply chain
• Reduced risk of counterfeit goods and fraud

The future of OEM clothing manufacturing will be shaped by technological innovations that continue to evolve. Some anticipated trends include:

• Integration of technology and smart clothing: Development of smart fabrics integrating biometric sensors that can measure heart rate, calorie expenditure, and adjust body temperature
• On-demand production and mass customization: 3D technology and automation will enable on-demand production and mass customization, reducing waste and meeting increasing demands for personalization
• Local production and micro-factories: Application of 3D technology allows optimization of made-to-order production and on-demand manufacturing, shifting the production balance back to locally situated micro-factories
• Integration of augmented reality (AR) and virtual reality (VR): These technologies will revolutionize how consumers interact with clothing online, allowing them to try on virtual garments before purchasing

As the apparel industry continues to evolve, adoption of these new technologies will be key for OEM manufacturers to maintain competitiveness in the global market. Manufacturers leading in adopting these innovations will be well-positioned to meet the increasing demands for speed, quality, and sustainability from fashion brands and consumers.

8. Selecting the Right OEM Clothing Manufacturer

Selecting the right OEM clothing manufacturer is a strategic decision that directly impacts product quality, production costs, and brand competitiveness. This process requires careful evaluation of the production capabilities, quality, pricing, and reliability of potential partners. Below are the important factors to consider when selecting an OEM clothing manufacturer.

Production capability is a key factor determining the ability to meet brand needs. When evaluating OEM manufacturers, consider the following criteria:

• Production capacity: Assess monthly and annual production capabilities to ensure they can meet your order requirements. For example, DUGARCO has a production capacity of over 12 million products per year, with an average output of about 1 million products per month.
• Technical expertise: Consider the ability to produce complex products and the level of innovation in the production process. Manufacturers can demonstrate their capabilities by providing evidence of producing complex products.
• Facilities and equipment: Evaluate the modernity of machinery, equipment, and production technology. Leading manufacturers like Thygesen Textile Vietnam use advanced machinery from Europe and Japan.
• Supply chain management: Examine supply chain management capabilities to ensure operational efficiency and product consumption. A good OEM manufacturer needs an efficient and comprehensive supply network, with strong supplier relationships to ensure on-time delivery and minimize disruptions.
• Industry experience: Assess the number of years in operation and customer portfolio to determine the level of experience and reputation. For example, DUGARCO has over 30 years of experience in the textile industry.

Quality certifications not only ensure products meet international standards but also demonstrate the manufacturer’s commitment to quality and sustainability:

• ISO 9001: International standard for quality management systems. This certification ensures the manufacturer has effective and consistent quality management processes.
• WRAP (Worldwide Responsible Accredited Production): This certification ensures manufacturers comply with standards for safe, lawful, humane, and ethical working conditions.
• GOTS (Global Organic Textile Standard): Certification for organic textile products, ensuring fabrics are made from organic fibers and meet environmental and social criteria throughout the production process.
• OEKO-TEX Standard 100: Certification that textile products do not contain substances harmful to human health. DUGARCO has achieved this certification, along with ISO 14001, GRS, and GOTS.
• AATCC (American Association of Textile Chemists and Colorists): Organization that creates testing standards for the textile industry, including factors ensuring clothing quality such as colorfastness, shrinkage, seam quality, and fabric quality.
• CPSIA (Consumer Product Safety Improvement Act): Law establishing safety regulations for consumer goods, including clothing. CPSIA standards address many areas of clothing quality control such as lead testing, labeling requirements, and flammability testing.

Process for evaluating and selecting OEM manufacturers:

• Initial research: Use online platforms and directories such as Alibaba.com, Global Sources, or the Vietnam Textile and Apparel Association (VITAS) directory.
• Attend exhibitions and events: Attend major textile exhibitions such as Vietnam International Textile & Garment Industry Exhibition, Vietnam Saigon Textile & Garment Industry Expo, and Hanoi Textile & Garment Industry Expo.
• Preliminary assessment: Review production capabilities, quality certifications, MOQ, and pricing of potential manufacturers.
• Request samples: Evaluate product quality by requesting samples from potential manufacturers.
• Factory inspection: Conduct direct factory inspections to assess facilities, production processes, and working conditions.
• Reference checks: Contact current or previous customers of the manufacturer to assess reliability and service quality.
• Financial assessment: Review the manufacturer’s financial situation to ensure stability and sustainability in long-term cooperation.
• Negotiation and contract signing: Discuss terms and conditions, including pricing, delivery times, and quality policies.
• Important questions to ask when interviewing potential manufacturers:
• Production capacity: “How many products can you produce per month? Do you have experience producing my type of product?”
• Quality: “What quality certifications do you have? What is your quality control process?”
• MOQ: “What is your minimum order quantity? Is it negotiable?”
• Delivery time: “What is your typical delivery time? Can you accommodate urgent orders?”
• Pricing: “What is the production cost per product? Are there discounts for large orders?”
• Production process: “What is your production process? Do you provide additional services such as cutting and sorting or tech pack development?”
• Quality inspection: “Do you accept third-party quality inspections at any time?”
• Customization: “Do you provide end-to-end customization options? If so, what are they?”
• Supply risk management: “How do you minimize supply risks such as backorders?”
• Information protection: “Can the manufacturing partnership ensure protection of your confidential data through measures like strong information security and confidentiality commitments?”

9. Future Trends in OEM Clothing Manufacturing

The OEM clothing manufacturing industry is undergoing a revolution with several emerging trends that promise to reshape how the industry operates in the near future. These trends focus not only on increasing production efficiency but also on sustainability and meeting the growing demands of consumers.

On-demand and Flexible Production
The on-demand production model is emerging as a solution to inventory and waste issues in the apparel industry. Instead of mass production and demand forecasting, OEM manufacturers are shifting to a model of producing only when there’s an order. Tailored Industry in Brooklyn, New York has adopted this model with a 3D knitting factory and on-demand software platform, allowing garment production only after sales. This helps minimize inventory risk and increases the ability to respond quickly to market trends.

Digital Technology Integration
The trend of integrating digital technology throughout the production process is changing how OEM factories operate. From 3D design and virtual sampling to intelligent supply chain management, digital technology is helping optimize every aspect of the production process. For example, blockchain technology is being applied to enhance transparency and traceability in the supply chain, allowing brands and consumers to verify the origin and authenticity of products.

Relocating Production Closer to Consumer Markets
Nearshoring and reshoring trends are becoming increasingly popular in the OEM apparel industry. Companies are re-evaluating their sourcing strategies to reduce supply chain complexity and improve responsiveness to market changes. Bringing production closer to consumer markets helps reduce shipping times, costs, and increases quality control capabilities. For instance, many US fashion brands are moving part of their production from Asia to Mexico or Central American countries.

Mass Customization
The future of the OEM apparel industry will see strong development in mass customization trends. Advanced production technologies like 3D printing and laser cutting allow for the production of personalized garments at costs comparable to mass production. This meets the growing consumer demand for unique and personalized products.

Impact of E-commerce
The growth of e-commerce is changing how OEM manufacturers operate. Online platforms allow direct connections between manufacturers and consumers, creating new opportunities for D2C (Direct-to-Consumer) business models. This requires OEM manufacturers to be more flexible in fulfilling small orders and providing integrated logistics services.

Role of Artificial Intelligence and Automation
Artificial Intelligence (AI) and automation will play important roles in optimizing OEM production processes. AI is being used to predict fashion trends, optimize fabric cutting, and control quality. For example, AI-based inspection systems can detect defects in real-time, helping to reduce defect rates and increase production efficiency.

Sustainability and Social Responsibility Trends
Increasing concern for sustainability is driving OEM manufacturers to adopt more environmentally friendly production methods. This includes using recycled materials, minimizing waste, and applying energy-efficient production processes. For example, many manufacturers are switching to sustainable fabrics like organic cotton, Tencel, and recycled polyester.

Changes in Global Supply Chains
Finally, recent disruptions in global supply chains are prompting OEM manufacturers to diversify their sources and enhance resilience. This trend may lead to the development of new production centers and changes in how fashion brands manage their supply chains.

In conclusion, the future of OEM clothing manufacturing will be shaped by advanced technology, flexible production models, and a focus on sustainability. OEM manufacturers need to continuously innovate and adapt to maintain competitiveness in this rapidly changing industry landscape.

Above, Dugarco has helped you know more about the OEM clothing manufacturer. The article also points out objective assessments of the advantages/ disadvantages of this type of manufacturing in each region. Furthermore, we also answered some popular questions that everyone is often curious about. We hope that the answers provided have met your expectations. If you have any feedback or suggestions, please don’t hesitate to reach out to us.

Contact information:

• Address: No.59, Duc Giang Street, Duc Giang Ward, Long Bien Districts, Hanoi City, Vietnam
• Tel: 024 3655 7930
• Email: dugarco@mayducgiang.com.vn
• Website: https://dugarco.com/en/

>>>> RELATED TOPIC:

• 5 Vietnam sports clothing manufacturers you should not miss
• Best quality streetwear clothing manufacturers 2024 | Dugarco Brand

Hoang Ve Dung

Dugarco under the talented leadership and guidance of Mr. Hoang Ve Dung has gradually become a large Vietnam clothing manufacturer, supplying clothes for many famous brands from many different countries such as the UK, USA, and Australia.