Uniqlo jumps into in-house production with new 'made in Tokyo' line

Keiichi Furukawa

Uniqlo is rolling out Friday its first made-in-Tokyo clothing, a limited release heralding a new design process and business model for operator Fast Retailing.

              These 3D knitting machines from Shima Seiki at Uniqlo's Innovation Factory turn out fabric around the clock

The three new items, which include a 2,990 yen ($27) 3D-knit cotton crewneck sweater, will be available at a Uniqlo flagship store in central Tokyo and online.

Fast Retailing plans to produce just enough to meet customer demand -- a model made possible by the first foray into manufacturing by a company that had relied entirely on outside suppliers to make roughly 1.3 billion pieces of clothing a year.

The centerpiece of this strategy is a building in a manufacturing-heavy area of Shinonome on Tokyo Bay, with no signs outside connecting it to Fast Retailing. In this tidy space, machines from Fast Retailing partner Shima Seiki Manufacturing steadily churn out seamless knit fabric. Operating around the clock, this facility produces 1,000 pieces of fabric per day.

The plant, started up in April, is operated by Innovation Factory, a joint venture with Shima Seiki that was a subsidiary of the knitting machine maker before Fast Retailing boosted its stake late last year to 51% from 49%.

"Having a factory that we lead ourselves will enable closer cooperation between our headquarters in Ariake [in Tokyo] and production," Innovation Factory CEO Tomoya Utsuno said.

The usual development cycle for Fast Retailing products has had issues with disconnect between physically distant teams.

It starts off with planning by a team at the Ariake office, which works out numerical specifications for the new item. Once preparations for mass production get underway, the Ariake team then coordinates with the Innovation Factory, which was previously based in Wakayama, about 500 km west of Tokyo.

But such details as texture cannot be quantified, according to Fast Retailing, and changes would sometimes be needed close to the start of the production run if the item turned out differently from what the development team had envisioned.

And because of the long distance between the Ariake headquarters and the Innovation Factory in Wakayama, staff rarely went so far as to travel there to check prototypes and make adjustments in person.

"Fast Retailing wasn't involved enough, and there were issues with product launches and the like being slow to get off the ground, " Utsuno said.

Since the launch of the Shinonome facility in April, product development personnel from Ariake have visited in person once a week, according to Utsuno. The shorter distance makes it easier to coordinate, improving communication between the teams. Fast Retailing looks to cut the time from product design to preparing for mass production from three months to one month or shorter.

The plan is to make new products from the Innovation Factory available at the Tokyo flagship store for limited runs, letting Fast Retailing gauge demand.

"We'll observe consumer trends, then switch to larger-scale production overseas" if products turn out to be hits, Utsuno said. This will help the company cut down on unnecessary production and unsold inventory.

Chairman, President and CEO Tadashi Yanai has said for some time that the Shinonome facility would be a global "mother factory" for 3D-knit products.

By having the facility coordinate with the research and development division at Fast Retailing's headquarters and share information with suppliers in Vietnam and China, the company will be able to roll out products from Shinonome simultaneously outside Japan as well.