Global Outsourcing in the Textile Industry

Introduction Look at the clothing tag on your shirt. Where was it made? Most likely, the shirt was manufactured outside of the United States. This can be explained by two words. Global outsourcing. Global outsourcing has been a hot topic concerning many Americans since the early 1990’s. Businesses are always deciding whether or not to take on this great challenge. This trend can be seen in the textile and apparel industry, companies have moved mass amounts of production overseas. Although it seems all companies in the textile and apparel industry are transferring their production to other countries, it is not essential for a business to outsource in order to be competitive. Throughout the history of outsourcing, arguments both for the advantages and disadvantages have been heard, but by looking at two companies such as Liz Claiborne or American Apparel we can see exactly how outsourcing works.

Definition

Global outsourcing is a very important business decision. It means both a world of opportunity and a world of great danger.[1] Global outsourcing occurs when a company decides to move or contract out a part of their manufacturing or service operations to other countries.[2] More often then not a company chooses to move its production to developing countries or cheaper economic systems. Global Outsourcing is easiest in modular companies. A modular company can be easily broken apart with little effect on the overall business. The idea of global outsourcing did not just appear over night. It’s an idea that has been cultivated throughout history.

History

Global outsourcing’s history is longer than some even realize. No sector in the world has received as much protection as the textile and apparel industries. As barriers to trade were reduced, global outsourcing started to gain speed. Since World War II, various actions have allowed for global outsourcing in the textile and apparel industries. Before World War II the United States