Abstract : American Apparel is the largest sweatshop-free clothing manufacturer in the United States. The innovation process consists in the fact that American Apparel has decided not to outsource its activities. Vertically integrated manufacturer, wholesaler and retailer American Apparel produces all of its garments domestically in Los Angeles and also performs its own design, advertising, and marketing internally.

By integrating all aspects of production and avoiding outsourcing, the company achieves a fast turn-around time from design concept to finished product. As such speed that a garment could be designed on Monday and be sold in London the following week. Small, frequent shipments between stores to balance inventory based on locale-driven demand as opposed to huge containerized shipments of most retailers

The company pays the industry’s highest factory wages in the USA and provides health care benefits for all its line workers. The company emphasizes this socially responsible production process in its marketing, and that payed off with the brand’s rapidly formed hip, urban consumer base.

American Apparel designs, creates and prints its own advertisements. Many of the models in American Apparel’s advertising are recruited by founder and CEO Charney and his colleagues on the street, or company stores.

The production system of American Apparel centralizes most of its employees in a single location. By not outsourcing, Charney believes that he knows his workers better and that it ties them directly to the brand. A banner on top of the downtown factory states “American Apparel is an Industrial Revolution.”

Driver 

Social

The company creates value by focusing on socially responsible production process. And creating very favourable working conditions.

Economic / Industrial

By integrating all aspects of production and avoiding outsourcing, the company achieves a fast turn-around time from design concept to finished product.

The company uses “team manufacturing” which pools the strongest workers towards priority orders. Each team functions autonomously and determines its own daily production schedule, giving them control over their own hourly wages.

American Apparel pays factory workers an average of over $12 dollars an hour. Garment workers for similar American companies in China earn approximately 40 cents per hour. It claims to have the ‘highest earning apparel workers in the world’.

Environmental

The company promotes environmentally friendly practices and is known for its innovations in sustainability due to vertical integration.

Political

In addition to participating in a variety of immigration protests, the company launched an advertising and advocacy campaign called “Legalize LA”. The company also maintains a Legalize LA portion of their website that features news articles relating to immigration reform, the brand and information on the history of the issue.

Design / Art

Their print campaigns are widely considered to be some of the best in the industry and has been lauded for honesty and lack of airbrushing. American Apparel images often display subjects with their blemishes, imperfections and asymmetrical features highlighted and attached with brief, personal descriptions. Many of the models in American Apparel’s sexual advertising are recruited by Charney and his colleagues on the street, or company stores; others are selected after sending their photos directly to the company website.

Indication

Potential “innovation wild card”

Completely counter current business model that is showing its success.

Sector specifics / cultural specifics

Apparel and clothes manufacturing and design.

Source 

Internet

Many references such as