Supply Chain Management in the Textiles and Clothing Industry: Case of Four UK based Companies
Textiles and apparel is a major sector for both the industrialised and the lesser developed economies, contributing both to wealth generation and employment. The sector represents a key part of employment in Europe, and world-wide, and in Europe alone employs in excess of two million people. Turnover for 2000 was Euro 198 billion. The European industry sector is dominated by large numbers of small- and medium-sized enterprises (SMEs), and in 1999 the average sized company had 19 employees. The major constraints that SMEs face include limited financial resources, a lack of personnel and time, little or no experience, and limited confidence in implementing new systems. As a result, many small companies are either unable or unwilling to invest in marketing, design and innovative activities. Globalisation is a key factor in the industry, and one of the biggest problems affecting the UK manufacturing industry is the increasing threat from low labour cost countries. The UK clothing manufacturing industry has been facing major problems during recent years. There have been 50,000 jobs lost in the last two years (as of 2000 A.D), and it is expected that this trend will continue. In July 2000 Marks and Spencer asked its suppliers to cut the prices of garments already produced by 2 per cent. Two of their main suppliers, Coats Viyella and Dewhirst, both refused to accept the cuts, and Coats Viyella has since announced the loss of 1,900 jobs. The low valuation given to key brands in the sector reinforces the lack of confidence in the sector as a whole and the perceived risk of investing in them. In February 2000, the stock market valuation of the entire sector was calculated to be £740 million, a figure less than that of a single dot.com auction company, and considerably less than the combined turnovers of the companies within the sector. This resulted in take-over bids for long-standing UK companies by large overseas companies. One example of this was the sale of the Pringle brand to the Hong Kong based Fang Brothers in February 2000 for £6 million.
The textiles and clothing industry is highly diverse and heterogeneous. Definition of what precisely constitutes textiles and apparel is a matter of debate and, in its broadest sense, the sector spans chemical conglomerates producing dyes, detergents and artificial fibres, to healthcare companies producing heart valves, prosthetics, bandages, etc., to niche design driven fashion companies. In the UK, all of the major retailers are in the textiles and apparel business and their buying power is able to “make or break” the success of particularly smaller suppliers, such as a young fashion design company. Retailers source globally for their textiles and apparel products to acquire these cost benefits and in time to meet their fast moving and demanding consumer needs. The trend for offshore sourcing has led inevitably to a decline within employment in industrialised nations for textiles and apparel. However, global sourcing does not always suffice to meet retailers’ demands, particularly if they need to replenish a well selling stock mid-season, and so local suppliers are used in tandem with those offshore. Managing the logistics and supply chain for textiles and apparel suppliers and retailers has to be synchronised and is driven by the exigencies of the dynamic patterns of demand, especially for fashion items.
Supply chains in textiles and clothing
The supply chain in the textiles industry is complex. Often the supply chain is relatively long, with a number of parties involved. Consequently, careful management of the supply chain is required in order to reduce lead times and achieve quick response, highlighting the need to use an approach such as agility.
It is common practice for retailers to deal with manufacturers, with centralised buying and considerable negotiation on...
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