Outsourcing strategies for apparel manufacture: a case study

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The redesign of a product supply chain, in terms of production, cost and delivery capabilities can be effectively accomplished by mapping, analyzing and simulating the changes in the supply chain prior to implementation. The case being discussed pertains to the apparel industry in the USA. The beginning of 2005 marked the end of a 30-year old quota on the apparel market in the USA. This has led many western apparel manufacturers to outsource their production to low-labor cost countries. This in-turn has led to increased customer lead-times. This paper aims to discuss how the implementation of proper IT systems and supply chain measures can reduce lead-times and also reduce total cost. Design/methodology/approach -An integrated approach is utilized to model the impact of apparel outsourcing added to a US apparel producer supply chain by studying the process map, data analysis, and simulation of the supply chain using Visio, Excel and @Risk simulation software. Using Monte Carlo simulation, the hypotheses on responsiveness and relative costs were tested with and without the outsourcing feature in the US apparel producer supply chain. Findings -The cost savings through outsourcing in the low-cost labor countries in Asia for the US apparel producer supply chain can be huge and the lead-time is quite substantial. Thus, outsourcing is not a viable solution for meeting short-term market demands. However, for large seasonal orders, outsourcing could be an enormous cost-saver. The lead-time of the US apparel producer supply chain could be improved if certain controllable factors such as order processing could be made more efficient. Practical implications -Recent studies by Acaccia, Conte, Maina and Michelini as well as the Leadership for European Apparel Production From Research along Original Guidelines (LEAPFROG, www.leapfrog-eu.org/), were reviewed. However, no recent study that uses Monte Carlo simulation to measure the supply chain in the apparel market for the USA was traceable in the existing literature except one done by Naylor, Burdick and Sasser at Duke University in 1967. The process modeling of the US apparel producer supply chain with the outsourcing feature will ...

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