Global Apparel Sourcing Trends

An article in Sourcing online (http://www.sourcingjournalonline.com/wheres-and-whys-2012-apparel-sourcing-trends) describes rising labor costs in China and its impact. The article cites lead time, flexibility and variety as issues to consider in sourcing. Vietnam benefits from being close to mills in China, Bangladesh has low labor costs, while Honduras and Nicaragua benefit from being close to the US, thus saving three to four weeks in lead time. On the other hand Mauritius and countries in Africa benefit from free trade agreements with the US.  How should all these factors be incorporated into a global sourcing decision, given that unforecasted shocks (such as the changes in Egypt) can shift sourcing outcomes ? Should sourcing be framed as a hedged China plus four countries strategy as stated in the article ? Given cotton price fluctuatations, which seem to have settled now, should sourcing of commodity raw material be shifted to a contract with farmers to ensure supply or should one use cotton futures to ensure pricing stability?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , . Bookmark the permalink.

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