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The purpose of this paper is to examine merchandise performance-based financial productivity of offshore vs reshore sourcing scenarios for fashion/seasonal products with higher demand uncertainty, using computer simulation software.

Using Sourcing Simulator^TM, the researchers generated a data set of 530 simulations concerning merchandising performance measures for offshore and reshore sourcing scenarios. Analysis of covariance was conducted for data analysis.

Results show financial productivity differs, depending on a sourcing decision between offshore and reshore sourcing scenarios as well as on the levels of volume error and assortment error. The reshore sourcing scenario through “Made-in-USA” domestic production strategy can have a better profitability, including gross margin return on inventory with service level, in cases of under-volume error and over-assortment error, than the offshore sourcing scenario.

Findings from this study are based on simulation data, which may have a gap between simulations and reality concerning the competitive advantages of “Made-in-USA” domestic production strategy. “Made-in-USA” domestic production strategy can be more agile and responsive to the uncertainty of markets and customer demands when the supply chain systems are well-integrated and fully implemented.

Results from this study contribute to fill the literature gap about differences of financial productivity between offshore and reshore sourcing scenarios for apparel manufacturers and retailers. This study also offers an insight of which decision response may be better to uncertain customer demands, while satisfying financial productivity.

The main purpose of this paper is to compare the differences between the small and medium‐sized enterprises (SMEs) and the large enterprises (LEs) of the Hong Kong clothing industry in terms of the adoption of production sourcing strategies and buyer‐supplier relationships.

A questionnaire survey was conducted among 120 small to large‐sized clothing firms in Hong Kong.

The results show that there were certain differences between SMEs and LEs with regard to production sourcing: LEs are more able to disperse production globally; LEs are more likely to adopt single sourcing, while SMEs prefer multiple sourcing; SMEs tend to use a combined strategy of in‐ and outsourcing, whereas LEs select either insourcing or outsourcing; and LEs are more likely to develop a formal strategic alliance with their trading partners.

The adoption of sourcing strategies and buyer‐supplier relationships may change over time: future research should also be directed towards collecting longitudinal data.

To compete with LEs, SMEs have to ally strategically with their trading partners. Adopting sourcing strategies in a more cooperative manner is therefore imperative. Nonetheless, both SMEs and LEs should exploit their advantages by adopting proper or innovative combinations of sourcing strategies and buyer‐supplier relationships, and hence their respective disadvantages can be offset and their competitive advantages can be enhanced.

This paper examines the differences between SMEs and LEs in the adoption of production sourcing strategies and buyer‐supplier relationships. This study provides an implication for the management of SMEs and LEs in terms of production sourcing.

The aim of this paper is to demonstrate how an imaginative sourcing policy can be used to provide a competitive advantage for clothing manufacturers based in high‐cost countries. The paper shows how Chorus Line Corporation implemented their sourcing mix, through a combination of production in different regions, to maintain and develop their competitive position in the womenswear market in the USA. The company's basic data and decisions are outlined as an example of how one privately owned company views the sourcing and production decision. In this way the paper will help firms to develop their own global production strategies with balanced sources to meet their business and market strategies.

Given the intense international competition brought on by globalisation, an organization's profit is largely determined by how it leverages its internal and external resources. This paper studies the production sourcing strategies adopted by the small and medium-sized enterprises (SMEs) in the clothing industry together with their motivations for outsourcing, adoption of buyer-seller relationships, and satisfaction with their production sourcing performance. A conceptual framework was developed from the literature and tested using a questionnaire survey. Quantitative analysis showed that motivational factors (MFs) can affect an SME's satisfaction with its operational achievement; while host-country and location MFs can affect its strategic achievement. In addition, firms adopting a pure transaction approach seemed to be negatively motivated by the total-cost factor; and those adopting a more diverse sourcing strategy were more likely to be motivated by the corporate factor so as to develop appropriate buyer-seller relationships with vendors, and to be satisfied with their operational performance. This paper contributes to a deeper understanding of business networking from the perspectives of SMEs in regard to their pursuit of production sourcing; and demonstrates how clothing SMEs adopt production sourcing strategies to improve their production sourcing performance.

This paper studies the factors that motivate small and medium-sized clothing firms in Hong Kong to shift their production offshore, and identifies the interrelationships between these factors and firm-related characteristics, sourcing strategies, and buyer-supplier relationships. Using a multiple case methodology to study ten firms and a two-phase approach to collecting data involving, in-depth interviews and mail questionnaires, the two most important factors motivating the sourcing of production offshore are identified, as follows: (1) cost advantage of, and (2) availability of labour in, the host country. The results also show that industrial sector and firm size are the only firm-related characteristics that have an effect on the factors motivating offshore production. Furthermore, sourcing strategies and buyer-supplier relationships are sometimes influenced by these motivational factors.

The purpose of this paper is to examine and discuss the responses and strategies firms use in relation to their supply base when dealing with current trends in the business landscape, and the different options that they have.

The paper draws on case study research of a company within the international health care sector to illustrate the relationship between trends, supply base characteristics and supply base strategies.

The paper presents a framework for a systematic approach that companies can use to develop supply base strategies. The framework illustrates that developing supply base strategies is a dynamic process that not only involves individual actions by the buying company, but also requires close interaction with suppliers.

Previous literature has not specified how different trends affect a company’s supply base in terms of increased complexity and (inter)dependence, and which supply base strategies companies use and the options that they have. The research presented here contributes to fill this void.

As a consequence of the sluggish growth in Europe caused by the Euro-crisis, many German companies are currently expanding their manufacturing and innovation activities in fast-growing China – or intend to do so. The paper aims to provide new practical and theoretical insights on how German manufacturing companies are readjusting and further developing their production and innovation strategies in China and which future paths they plan to follow to make the most out of their foreign factories in this market.

Based on in-depth interviews with the top management of 18 German manufacturing companies in China, this paper analyzes the present state, interlinkages and future development paths of their local manufacturing and innovation strategies, employing Ferdows' framework of foreign factory roles.

The authors find that up to now most of the surveyed factories represent an additional type of an advanced server factory, characterized by a “Chinese gap” in new product development (NPD) and basic innovations. Based on that the authors propose five guiding principles on how foreign factories in China can cope with the upcoming challenges in China and make the most of their local strategies.

The research provides unexpected insights of a high strategic relevance for practitioners currently engaged in optimising their global production and innovation footprint. It challenges established frameworks on foreign production and innovation modes by comparing them to the established practice of frontrunner companies from key sectors of the German manufacturing industry.

Ownership and location decisions are at the core of the development of multinational enterprises (MNEs) as they deeply impact the creation and appropriation of value in global value chains. Such decisions have been treated by extant literature mostly as oppositions characterized by trade-off alternatives, such as internalization versus externalization and domestic versus offshoring. In this chapter, we discuss the development of a multinational company, that is, De’Longhi, as it has adjusted both ownership and location choices several times over the last 15 years. The case shows that in growing firms, such as De’Longhi, ownership and location decisions are interrelated among each other and with several factors including: interdependences between value chain activities, corporate strategy, organizational culture and the time horizon of the above choices.

In this paper, the authors study the entry and outsourcing strategies of manufacturer while considering the brand spillover effect resulting from outsourcing. The supply chain comprises two manufacturers: one being the entrant with a strong brand, and the other as the incumbent with a weak brand. The entrant decides whether and how to enter the market.

Stackelberg game is applied to study the optimal strategies for the manufacturers. This paper conducts a comparative analysis on four situations, yielding conclusions and managerial insights.

The results show that, for the entrant, there is no need to worry about the brand spillover effect in the outsourcing process, which is very interesting and counterintuitive. To get further, the authors find the reason: The spillover effect causes the entrant’s equilibrium retail price to grow faster than the wholesale price. They also prove that a stronger brand effect empowers the entrant to challenge industry barriers, while the impact of the brand spillover effect is the opposite. For the incumbent who acts as the weak party in this issue, it is demonstrated that the optimal choice is to continue selling when facing the encroachment and outsourcing call from the entrant.

Differing from previous studies, the authors notice the brand spillover effect caused by outsourcing when studying company’s entry strategy. They further divide the brand effect into two parts, one of which does not exhibit a spillover.

The paper seeks to develop strategic planning to enhance sustainable competitiveness in the US textile industry with a consideration of DR‐CAFTA as an opportunity to establish responsive supply chain networks in the Western hemisphere.

The analysis was based on literature reviews, trade data analyses, and site visits for personal interviews at textile and apparel companies in North Carolina and the Office of Textile and Apparel at the US Department of Commerce, Washington, DC.

DR‐CAFTA countries constitute the only remaining region that the US textile industry can use to achieve speed‐to‐market advantages from geographical proximity. Market analysis indicated both voids and opportunities in “fast retailing” supply chain networks. In developing time‐to‐market supply chain networks, it is suggested that the implementation of DR‐CAFTA should focus on: streamlining the rules of origin, expanding the short‐supply list, and coordinating custom procedures; financing options for DR‐CAFTA countries' procurement of fabrics and other raw materials from the USA.

Two models are proposed which can possibly be implemented by the US textile industry: a shortened supply chain for knitted sportswear and fashionable shirts that can capitalize on time‐to‐market; and triangular supply‐chain networks among US retailers and textile companies, Asian textile manufacturers, and DR‐CAFTA apparel manufacturers for fashion basics.

This study has an implication for the US textile industry and policy makers to develop future strategic planning in the post‐quota era. The suggestions will contribute to enhancing the competitiveness of the US textile industry in the intense global competition by achieving speed‐to‐market with DR‐CAFTA countries.