Apparel supply chains competitiveness

How do apparel supply chains compete One approach is to compete on cost, an approach used by Walmart and other department stores. This strategy focuses on developing a cost-efficient supply chain that may require global sourcing with low costs but long lead times. Such supply chains then require large buffer stocks to compensate for demand uncertainty or a focus on predictable demand for basic products with low demand uncertainty But there are many other dimensions of competition in the apparel industry. 

This shows that improving lead times and enabling decisions under a lower demand forecast error may require coordination agreements between members of the apparel supply chain. Once such coordination agreements are estabhshed, the access to manufacturing capacity closer to demand enables improved competitiveness of the apparel supply chain. Notice that all four Cs played a role in improving the supply chain. 

Similarly, quick response programs in the apparel industry focused on decreasing apparel delivery lead time. The competitive benefit of lead-time reduction has been estimated to be equivalent to the profit associated with a 40% demand increase. In short, time can generate money for the supply chain. 

As individual brands these fundamental issues may seem insurmountable however, in spite of the highly competitive nature of the retail apparel market, a growing group of responsible retailers are tackling these issues together. These retailers have recognized the interdependencies of their businesses within the supply chain and how the development of a more sustainable model is beneficial to individual organizations as well as the industry as a whole. 

In the new world of ever-developing technology and techniques, organizations must consider how to deal with the issues of increased competition, rising customer expectations, and increase in product variety. This chapter will discuss about various production systems, production planning in the apparel industry, supply chain and inventory management and various tools to improve the productivity in the apparel industry. 

Modelling of uncertainties in supply chains has become important with the proliferation of product varieties and the increased volatility of the global market places of the contemporary business environment. For instance, product range and product style in a fashion industry are renewed constandy while in the basic apparel industry, long production and distribution lead times still prevail. Managing business environment dynamics in an uncertain and competitive market is a challenging task and forced many organizations to reform their operational processes. 

As the MEs may not to be competitive in producing functional products, most of the needs would be satisfied through imports. We call this the trade driven supply chain, shown in Fig. 7.2. For example in the apparel industry, products that are not fashion-sensitive are produced in the EE, usually in Asia, and imported in large volumes by retailers such as Wal-Mart. Manufacturers in EE obtain large production contracts with lead times of several months and therefore their exposure to demand side risk is negligible. However, they are exposed to a considerable supply side risk, discussed later. 

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