Apparel sourcing: assessing the true operational cost

Abstract

In a earlier debate, it was suggested that for many reasons, the decision by a retailer to source low‐cost clothing offshore from low‐wage suppliers may be ill‐advised. We were able to show that using lower priced textiles and apparel manufactured by foreign sources could be sub‐optimal operations strategy. In numerous cases, those relying upon this form of procurement failed to consider all the relevant information. Despite the obvious attraction of low cost, there were serious trade‐offs and disadvantages. We classified the latter as the hidden costs of importing (for example, delays, use of airfreight, administrative and quality costs, etc.) and the inflexibility costs. When properly attributed and quantified, these disadvantages often outweighed the benefits of low cost foreign supply. It was at this point that we proposed the need for an objective, axiomatic framework (widely accepted across the textile industry) to demonstrate the full implications of domestic versus offshore purchasing – a total acquisition cost model. Here, we expand this thinking, and begin to explore how such a model can be developed using the data obtained from a sample of international textile and clothing retailers and their suppliers.

Citation

Lowson, R.H. (2003), "Apparel sourcing: assessing the true operational cost", International Journal of Clothing Science and Technology, Vol. 15 No. 5, pp. 335-345. https://doi.org/10.1108/09556220310492606