Cost, quality or lead time hasalways been a puzzle for the apparel retailers outsourcing from parts acrossthe globe. It is difficult to label any one factor as the prime factor forsourcing. Sourcing is a complicated process and cost, quality and lead time areall important aspects; unquestionably reliant on the product and demand. Theimportance is based on the nature of product, the requirement of the company,and the target customer. Says Mr. Howard Lucas (CEO- Kahn&Lucas LancasterInc.) the first preferred factor is quality, followed by cost and lead time.Quality of product sets the image for a company. While it is not alwaysnecessary to be the least expensive or fastest to market, apparel companiesmust always ship high quality product. Many of the retailers have extensivetesting programs in place and any substandard components will most likelyresult in the cancellation of a style. If a company is manufacturing under anational brand, it can "make or break" its brands image with theconsumer based on quality. Whereas, for Gary Simmons (President & CEO,Gerber Childrens Wear) cost is a primary factor for outsourcing; but he alsomentions that just three factors are not sufficient to determine the terms forsourcing. Other factors like political stability of the country,infrastructure, compliance etc are equally important. Bridget McDaniel(Assistant Buyer, Designer Sportswear- QVC) says its difficult to rate anyparticular factor as all are important. Based on their companys products, whichare sold online, they have to be very meticulous about quality, and beingcompetitive cost is equally important; so is lead- time as they have to assurefaster delivery to the buyer.

 

Globalization has become aphenomenon in the apparel industry. Outsourcing has taken an edge over localand in house manufacturing

 

Apparel industry is highly laborintensive and so low labor cost is always a prime factor for developedcountries when sourcing from under developed countries with assurance ofconsistent quality and on-time delivery of products. Thus global sourcinginvolves procurement of finished goods from other countries to make themerchandise more economical. The main factors of concern for global sourcingincludes: cost, quality, quantity requirements, long lead times, shippingcosts, political instability, language barriers etc.

 

The demand for high-qualitylow-cost products coupled with the need to reduce costs to increase operatingprofits is driving more companies to outsource manufacturing overseas. Due tothis demand, the market is getting very competitive and motivating everycompetitor to globally source their products and create a niche for itself inthe retail sector. After all, cost minimization leads to revenue maximization.As believed in the supply chain; its wise to pass the job to a third partythat is core competent in the same for getting better results, this applies toevery other industry. If you can get a better quality trade at lower cost thenit seems advisable to outsource the job to that provider. Global strategies areused to source these suppliers throughout the world on the basis of price,quality, technology and lead time or delivery reliability.

 

In general, all the threeparameters of an apparel product cost, quality and lead-time are correlated.Quality defines the life and durability of the product. If the quality is poorand the cost of the product is high, selling the product becomes a biggestchallenge. Meanwhile, paying high cost to get the product that cannot meet thesell period can convert huge loss to the retailer. Time sensitive products likefast fashion apparel follow very tight timeline and meeting the deadline isimportant than ever. Quality and lead-time go hand in hand. High qualityproducts with simple silhouettes need shorter turnaround time compared to theembellished or fashion cuts. One should not forget the time needed for theraw-material like fabric, trims or other accessories that would define thetiming of the finished goods. Longer lead times generally tend to stock higherinventory levels for the retailers. To avoid these retailers have startedpracticing Lean Retailing; which means they only own products that are therein stores. And they do not store the merchandise in warehouse for replenishment.If lead time were the only consideration in a supplier's decision on where toproduce its goods, then producers close to the retail market such as Mexico and the Caribbean for the US, or Turkey, Eastern Europe, and the Mediterranean for the EUwould have a clear advantage over Asia (Arnold, Dennis).

 

The entire practice is basically to get the right product atthe right place on right time and ensure business revenue to everyone.