U.S. Textile and Apparel Industry and Companies’ Sourcing Strategy—Discussion Questions from FASH455

 

#1 How do you think it would be possible for the United States to successfully re-shore apparel manufacturing when so many other countries have the advantage in speed, efficiency, and cost?

#2 The Berry Amendment is highly favored by NCTO and is seen as being good for the U.S textile industry and American pride. Why or why not do you think Berry Amendment should be applied to other segments of the fashion industry? Will such an initiative gain broad support?

#3 Why do you think NCTO suggests the trump administration impose tariffs on finished apparel items from China, whereas U.S. fashion brands and retailers oppose the tariff action strongly?

#4 Assume you are a sourcing manager for a major US fashion brand, how would you rank the following regarding importance when determining a sourcing destination: Speed to Market, Sourcing Cost, Flexibility and Agility, and Risk of Compliance?  Why would you rank them as such?

#6 Why do you think U.S. fashion brands and apparel retailers are sticking with sourcing from China, when there are less expensive products in other countries, such as Bangladesh and Vietnam?

#7 According to the 2019 US fashion industry benchmarking study, some apparel retailers source from more than 10 or even 20 different countries or regions. What are the benefits of adopting such a diversified sourcing base? Is it necessary?

(Welcome to our online discussion. For students in FASH455, please address at least two questions and mention the question # in your reply)

Related: Global Apparel Sourcing Practices and Trends

Author: Sheng Lu

Professor @ University of Delaware

8 thoughts on “U.S. Textile and Apparel Industry and Companies’ Sourcing Strategy—Discussion Questions from FASH455”

  1. #1: Does the US has the entrepreneurs willing to invest there ? Does the US has the workers with the necessary skills and the willingness to work for relatively low salaries ?
    #3: It is the traditional conflict between textiles industry (less labour intensive, more invest intensive -> US based) and apparel industry (extremely labour intensive, less invest intensive -> moved abroad).
    #6: Because China is simply good (Quality, Service, reliability) and fast (especially because of complete textile chain within the Country countrary to VN or BD).
    #7: limited production capacities of the factories; diversity of products and necessary skills of factories; spreading risks; trade Agreements.

    1. thank you so much for your always great insights from the industry, Bernd!! The outlook of apparel sourcing from China is particularly interesting. While much attention has been given to the impact of the US-China tariff war, China’s market share is dropping even more significantly in the EU and Japan… it seems some structural changes are underway.

      1. Even without the US-duties China has become more expansive and companies in Europe are looking for alternatives for quite someone time. But that is not as easy as It was in the past. In the 90s everyone went to eastern Europe and Turkey, 15 years ago everyone went to China. But now there is no obvious new hot spot to be. Africa is not ready yet. Each Company has to make its own decision and Experiences. Exciting times.

  2. #6: I believe that US fashion brands are sticking with sourcing from China despite the tariffs on imports due to the fact that China has no near competitors in terms of the variety of products that it can produce. Although other destinations like Vietnam and Bangladesh offer cheaper labor costs, China has many valuable raw materials like silk, which other nations lack. Raw materials like these are crucial to many fashion brands and are forcing them to continue to source from China.
    #7: Sourcing from so many different destinations is a key strategy used by many US fashion brands in order to achieve different benefits. No one sourcing destination is perfect and has all four characteristics of a perfect sourcing destination including sourcing cost, speed to market, flexibility and agility, and risk of compliance. Therefore, I believe that it is very beneficial and necessary to source from several destinations because it allows a company to achieve a balance of those four characteristics.

  3. #3
    I believe that US fashion brands and retailers oppose the tariff action because their bottom line will be negatively effected by this. If it costs them more to import their goods, they will have to either change their customers more for their merchandise or take the hit to their bottom line. Both options leave retailers in a tough situation that they would rather not face.

    #4
    1) sourcing cost
    2) Risk of compliance
    3) Flexibility and agility
    4) Speed to market

  4. 2: The Berry Amendment is beneficial for other segments of the fashion industry if the industries are able to source local materials as quickly and as efficiently as they do so with imported materials. That is, there is no point in favoring domestically products when there are no suppliers for such materials, or if the materials are not enough. Hence, before the implementation of this, processes have to be set in place in order for it to gain broad support.
    3: The National Council of Textile Organizations suggests the imposition of tariffs on items from China because it sees this as a step towards limiting the flow of goods from other countries, hence increasing the profit of U.S. fashion brands. However, such initiatives will lead to negative outcomes for U.S. brands, particularly because it will affect the supply chain for these brands. The prices of materials will increase, and the result would be higher costs of manufacturing, higher prices for consumers, and loss of jobs for workers in the clothing industry. The clothing industry is not yet as efficient in order to rely on locally made materials and products.

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