Globalization Impact to Apparel Sourcing
1. Executive Summary
2. Study background : Apparel is one of the oldest and largest export industries in the world. Most countries produce for the international textile and apparel market (Dickerson, 1995:6), making this one of the most global of all industries. Apparel production considered as the “starter” industry for countries wish to establish or increase export business for low fixed cost. The rising in garment manufacturing has been playing a significant role in economic development in many developing countries, especially benefit by termination of quota system on 2005 leading a tremendous growth.
3. Current Situation :
From a global commodity chains perspective, Asia’s transition from assembly to full-package supply derives in large measure from its ability to establish close linkages with a diverse array of lead firms in buyer-driven chains. Lead firms are the primary source of material inputs, technology transfer, and knowledge in these organizational networks. In the apparel industry, different types of lead firms use different networks and source in different parts of world. Retailers and markets tend to rely on full-package sourcing networks, in which they buy ready-made apparel primarily from Asia, where manufactures in places like Hong Kong, Taiwan, and South Korea have historically specialized in this kind of production. As wage levels in those countries have gone up, Asian manufacturers have tended to develop multilayered global sourcing networks where low-wage assembly can be done in other parts of Asia, Africa, and Latin America, while the newly industrializing-driven manufacturers play a critical coordinating role in the full package production process. Branded manufacturers, by contrast, tend to create production networks that focus on apparel assembly using imported inputs. Whereas full-package sourcing networks are generally global, production networks established by branded manufactures are predominantly regional.
2. Study background : Apparel is one of the oldest and largest export industries in the world. Most countries produce for the international textile and apparel market (Dickerson, 1995:6), making this one of the most global of all industries. Apparel production considered as the “starter” industry for countries wish to establish or increase export business for low fixed cost. The rising in garment manufacturing has been playing a significant role in economic development in many developing countries, especially benefit by termination of quota system on 2005 leading a tremendous growth.
3. Current Situation :
From a global commodity chains perspective, Asia’s transition from assembly to full-package supply derives in large measure from its ability to establish close linkages with a diverse array of lead firms in buyer-driven chains. Lead firms are the primary source of material inputs, technology transfer, and knowledge in these organizational networks. In the apparel industry, different types of lead firms use different networks and source in different parts of world. Retailers and markets tend to rely on full-package sourcing networks, in which they buy ready-made apparel primarily from Asia, where manufactures in places like Hong Kong, Taiwan, and South Korea have historically specialized in this kind of production. As wage levels in those countries have gone up, Asian manufacturers have tended to develop multilayered global sourcing networks where low-wage assembly can be done in other parts of Asia, Africa, and Latin America, while the newly industrializing-driven manufacturers play a critical coordinating role in the full package production process. Branded manufacturers, by contrast, tend to create production networks that focus on apparel assembly using imported inputs. Whereas full-package sourcing networks are generally global, production networks established by branded manufactures are predominantly regional.