Today, almost all our clothing is purchased off the rack. Even though their labels bear the name of a certain designer, chances are that it was not made in the designer's backroom but in a big factory somewhere else in the world - and very possibly in Singapore.

Singapore directly exports about $900 million of textiles and garments every year. The figure quadruples to $4.2 billion when you consider the many offshore factory locations of various Singapore-based OEM/ODM companies.

The OEM, or original equipment manufacturer, is essentially the contract manufacturer who provides the complete technical package which includes pattern making, cutting, sewing, embroidering and embellishing. Taking this one step further, the ODM provides all that, plus the consultancy services and input of a design team. Within the fragmented fashion and garment industry, there are various shades of this role being performed, usually tailored to the needs and requirement of the buyer/client.

Industry players estimate that the market for ODMs has grown by some 20 per cent of the total export in the last few years, providing services for small to mid-sized buyers who do not have their own design team but have their own brand.

"Through our overseas roadshows, we see a growing demand among buyers for apparel manufacturers with design capabilities," says Mrs Tan Li Lin, director of International Enterprise (IE) Singapore's corporate group (business and lifestyle services).

"This is true even for buyers with their own design teams as they find it a lot easier to work with ODMs given their understanding of design concepts and ability to value add with design inputs.

"Being 'the manufacturer with ideas' is one key way that our industry players can differentiate themselves from other global manufacturers."

Apparel manufacturers such as the Ghim Li Group, Gimmill Industrial Pte Ltd, Ocean Sky International Ltd and Sing Lun Holdings Ltd are making the transition, moving from OEM to ODM. To contain costs and stay competitive, most of these companies have a part of their production outside Singapore.

The current choice of countries of Singapore-based companies are Cambodia, Vietnam and China. Well-known international brands that use ODM services from Singapore include Polo Ralph Lauren, Gap, Banana Republic, Nike, Puma, Adidas and Reebok.

American-based Macy's has a sourcing office in Singapore. It has had a long working relationship with Singapore-based companies like Sing Lun Holdings. "We spend 55 per cent of our manufacturing budget in Singapore working with suppliers that we trust," says Ms Angela Yeo, Macy's merchandising manager.

She adds: "For almost 30 years, Sing Lun has provided us with manufacturing services, but in the last few years, it has also given value-added services like design and trend inputs. Its professional team is very focused and able to pick up on market trends and challenges as they lay out strategies to forge ahead in the business. Several of our brands like Inc and Aeropostale for men, Style & Co for women and Green Dog for youth are manufactured by them."

Just as manufacturers in Singapore rely on their strengths of having a good understanding of international business, likewise, there is a need for a good infrastructure for financing, logistics, procurement, technical, design and development skills (for ODMs) and a flexible production.

"The success of the ODM business relies heavily on its primary suppliers and secondary supporting units. Access to everything from embroidery and printing to carton box suppliers, to finishing manufacturers of buttons, thread and elastic is important. Similarly, banks and logistical support services like couriers and shipping handlers are essential," says Mr Chris Koh (left), director of Pacific Garments.

Mr Chow Tat Kong, group director for enterprise development in Spring Singapore, says: "With increasing liberalisation of global trade, buyers can source from anywhere in the world,"

He elaborates: "Local players need to offer that extra value to keep their targeted buyers by providing better quality and designs than competitors.

"As fashion cycles become shorter, they also need to keep pace with the demand for faster turnaround. To compete in this fast-paced industry, small- and medium-sized enterprises need to enhance their capabilities to move up the value chain to provide higher value-added services such as design, product development, marketing, project management and even supply chain management services."

To enhance the competitiveness of local players, Spring and IE Singapore have been working closely with the Textile and Fashion Federation under the Local Enterprise and Association Development programme to create new business opportunities by showcasing them to key international buyers at the Singapore Fashion Week.

A Productivity and Design Development Centre is also being set up to help companies improve operational efficiency and costs, enhance design and product development and adopt new technology such as "virtual fitting" software that will shorten the time needed to obtain buyer acceptance.