Factory Asia vs. Western Hemisphere Textile and Apparel Supply Chain during Covid-19: Discussion Questions from Students in FASH455

#1: Based on the readings and our lectures, why or why not do you think the United States can play a role in the Asia-based textile and apparel supply chain? Assume the United States rejoin the Trans-Pacific Partnership (TPP), to which extent can it help promote more U.S. textile exports to Asia?

#2: Why does the so-called “Flying-geese” model (i.e., a gradual industrial upgrading moving from making labor-intensive products to making more capital intensive goods) occur in Asia, but not so much in the Western-Hemisphere over the past decades?

#3: What does COVID-19 tell us about the nature of the textile and apparel supply chain today? How do you think the supply chain will continue to evolve in the post-Covid recovery? What are the key trends to watch?

#4: Overall, does Covid-19 strengthen or weaken Asian suppliers’ competitiveness in apparel production and exports? What is your evaluation based on the readings?

#5: Will China be able to regain its market shares in the U.S. apparel import market should the U.S.-China trade war end in 2021?  How to understand China’s “shifting” role in the Asia-based textile and apparel supply chain?

#6: Trade data suggests that U.S. fashion companies start to increase apparel sourcing again thanks to consumers’ robust demand. Assume you are the sourcing manager of a leading U.S. fashion brand, and you need to identify the suppliers for the new sourcing orders. Will you select suppliers on a merit basis, or will you give preferences to those factories where you previously canceled orders due to Covid? Please provide the reason for your choice.

[Anyone is welcome to join the online discussion. For students in FASH455, please address at least two questions in your comment. Please also mention the question number in your comment]

Author: Sheng Lu

Professor @ University of Delaware

13 thoughts on “Factory Asia vs. Western Hemisphere Textile and Apparel Supply Chain during Covid-19: Discussion Questions from Students in FASH455”

  1. #2: Why does the so-called “Flying-geese” model (i.e., a gradual industrial upgrading moving from making labor-intensive products to making more capital intensive goods) occur in Asia, but not so much in the Western-Hemisphere over the past decades?
    I believe that historical, geographical, demographical, and political factors come into play when considering why the Asian textile and apparel industry adheres to the flying-geese model, but not so much the Western Hemisphere. For example, since the early/mid 20th century (around the 1930s), many Asian countries scrambled to catch up with the economic and technological advances in the West, with Japan being the first country to do so, and then South Korea, Singapore, Taiwan, and Hong Kong. As these countries’ economies became more advanced, their lower-level production naturally shifted to less advanced countries in the Asian region, leading to a hierarchical structure that resembles flying geese. However, in the Western Hemisphere, this historical foundation does not exist, due to the US having industrialized well before the 1930s and having done so in a relatively insular manner (probably fueled in part by Americanism and national pride in production/manufacturing). Because of this, the US developed infrastructure to sustain a complete T&A supply chain domestically, and there was no need to rely on other countries in the Western Hemisphere. Also, geographically, the Asian continent is much more diverse when it comes to the number of countries in the region, their varying levels of economic development, and their large population. When looking at the Western Hemisphere (North America, Central America, and northern South America), the population size is less than ¼ that of Asia, which means that there is a much lower potential for production capacity. To create a sustainable supply chain that meets the consumer demands of developed countries like Canada and the US, population sizes on the scale of Asia are needed, which leads to a lot of outsourced production, instead of a regionally hierarchical system of production. Finally, I also think that because Asian countries have more relaxed labor and human rights laws than countries in the Western hemisphere, lower costs provided fashion brands with the incentive they needed to establish supply chains in Asia instead of their neighboring countries.

    #4: Overall, does Covid-19 strengthen or weaken Asian suppliers’ competitiveness in apparel production and exports? What is your evaluation based on the readings?
    Overall, I think that COVID-19 has strengthened Asian suppliers’ competitiveness. Originally, I thought that the pandemic would cause a greater push to establish regional supply chains that were more geographically stable in the face of global disaster, which in turn would hurt Asia’s apparel exports to countries like the United States, but the data in the readings actually suggests otherwise. For example, despite COVID-19, Asia remains the single largest import destination for the US market, with countries like Vietnam and Cambodia (and others in the ASEAN region) gaining additional market shares since 2019. Additionally, in the past year, the Western Hemisphere’s share in the US apparel import market has declined by 1.7%. A possible reason why the US is now more dependent than ever on Asia despite the global pandemic is that it is probably too much of a risk for fashion brands to invest in creating a more stable/reliable supply chain in the Western Hemisphere with business being so fragile right now. There is no surplus of revenue to experiment and try new business strategies, which might be influencing fashion brands’ decisions to more aggressively pursue the cheapest sourcing options (which is sourcing from countries in Asia).

  2. #3: What does COVID-19 tell us about the nature of the textile and apparel supply chain today? How do you think the supply chain will continue to evolve in the post-Covid recovery? What are the key trends to watch?

    COVID-19 has taught us a lot about the nature of the textile and apparel supply chain and the United States relationship with other countries. I believe the US supply chain will learn how to adapt post-covid due to the new norm of importing and exporting. Key trends to watch are: increase need for sustainability jobs and a lessened need for sewing workers.

    #4: Overall, does Covid-19 strengthen or weaken Asian suppliers’ competitiveness in apparel production and exports? What is your evaluation based on the readings?

    I believe that COVID-19 has weakened Asian’s suppliers competitiveness for exports due to United States companies becoming apprehensive about trading and importing products from Asian countries.

  3. 4. Overall, I think that COVID-19 has weakened Asian suppliers competitiveness in apparel production and exports. It’s hard to tell if this will be permanent, but hopefully those Asian suppliers will be able to remain competitive once the virus has been eliminated. However, other readings and data that I have seen have suggested that many U.S. retailers will continue to source from China and other countries in Asia, despite the affects of the pandemic. I also believe that Asia’s weakening competitiveness is not being caused solely by COVID-19, especially with the U.S. I think that there are other factors that are playing into this like increased tariffs, the Trade War initiated by President Trump, and the demand for ethical and sustainable sourcing becoming more prevalent in the E.U. and U.S.

    6. If I were a sourcing manager of a leading U.S. fashion brand, I would select suppliers if I had previously canceled orders due to COVID-19 because it would be the right thing to do. If I previously had a deal with a factory in China that fell through due to a global pandemic, I would feel obligated to go back to them once my brand was able to do so. I feel like it’s the least I could do to help the factory get back on it’s feet and make up for their COVID-19 related losses in income.

  4. 3. Watching what has happened to the textile/apparel supply chain during Covid has shown that since the textile industry is so capital abundant and relies so heavily on technology, it can survive covid and the workers who do work within the textile industry are able to keep their jobs. On the other hand, the apparel industry relies solely on human labor and the combination of country lockdowns and consumers going through a phase of buying less, lots of these factories had to shut down which caused so many people to lose their jobs. I think moving forward, the textile industry will be able to bounce back much faster than the apparel industry simply because it relies more heavily on technology than on people. I also noticed how since China was the first country to shut down, the U.S. was talking about feeling these effect since their factories had to close to keep employees safe. By the time they were able to reopen factories and continue to product clothing, a bunch of other countries including the U.S. had now gone into lockdown and consumers simply weren’t buying clothing. The disconnect between different parts of the world will be something that we should keep an eye on as we move out of Covid and see if there is anything that countries will do differently moving forward.
    6. I would give preference to the factories where I had originally canceled orders if they are still around. I think it is really important to make good connections with your suppliers for so many reasons, but both sides need to be able to trust the other. I remember reading about how factories and companies no longer had a real written agreement about pay schedules and receiving orders, it was kind of just how everything was done and had worked perfectly fine up until Covid. Then the retailers started taking advantage and simply didn’t pay the factories for the work they did and there was nothing the factory owners could do about it. I think that this creates a huge problem between factory and retailer and totally breaks all trust that they have with each other. The trust would need to be regained and the only way to do so is to continue working with each other and give the factory who you originally cut orders from, the new business moving forward.

  5. #4
    I think that COVID-19 has had a major impact and destruction on the world as a whole. However, overall it has also impacted Asia and weakened its competitiveness. There are other factors to the reasoning behind Asia being weakened, aside from the global pandemic, such as the Trade War, and tariffs being put into place. My hope is that COVID-19 is not the main cause of Asia’s weakened industry, and that as soon as there is a vaccine and the virus is eliminated, the industry in Asia will build itself up again and continue to grow. The United States and other countries, however, are still predicted to source from Asia in the future, and as long as they maintain their relationships and uphold their end of deals, hopefully Asia will be a booming industry soon.

    #6
    As a sourcing manager, I would personally choose to source from the factories where I may have cancelled orders in the past. It is never too late to make amends and regain someone’s trust. I would chose to source from previous factories that I used in order to build and maintain a stable relationship and be able to gain the factory owners trust again, for future endeavors. Due to the setbacks and destructions of COVID-19, especially the setbacks it has had on developing countries, I would want too and feel obligated to fix my mistakes (cancelling orders from these factories) and help in any way possible, as well as continue sourcing from these factories and countries, such as Asia.

  6. posted on behalf of Leslie:
    #2: Why does the so-called “Flying-geese” model (i.e., a gradual
    industrial upgrading moving from making labor-intensive products to
    making more capital intensive goods) occur in Asia, but not so much in
    the Western-Hemisphere over the past decades?
    This does not occur in the western-Hemisphere because they have become
    more advanced. Since earlier times Asia has been struggling to catch
    up to their technological and economical advances. Western brands have
    utilized this idea causing Asian regions to not be able to advance
    resulting in the flying geese model. These brands look to use these
    low-wage regions for labor-work, resulting in a constant state of
    trying to catch up to the top.

    #4: Overall, does Covid-19 strengthen or weaken Asian suppliers’
    competitiveness in apparel production and exports? What is your
    evaluation based on the readings?
    COVID19 has weakened the Asian market as a whole. They are not able to
    be as competitive as they once used to be because of the pandemic.
    Many brands are pulling away from Asian manufacturers due to the virus
    and restrictions beginning to occur such as trade deals.

  7. #3:
    The nature of the textile industry is very capital intensive while the apparel industry is very labor intensive. I think that moving forward, the textile industry will rebound quicker because they can rely more on machines and not people having to physically come into a crowded workplace. I think that the nature of the apparel industry is becoming more capital heavy, yet will still always require people to do the job. Covid has made it important to realize that becoming more capital heavy is a good idea. This also highlighted the reliance of the US consumer apparel market on counties such as China to produce and export apparel to us. As it does not look like the nature of the industry is going to be shifting to the US as opposed to China because of this, yet it made us realize how much we do rely on them and how difficult it can be to overcome something like this.
    #6:
    I would give preference to the factories that had orders cancelled. A lot of factories had to lay off many of their workers because of these cancellations and in some cases had to close altogether because they did not have enough money to take such large losses and stay open. These garment workers have felt some of the worst impacts of Covid as many now do not have jobs and do not know how they will provide for their families. I think that the right thing to do here is to give priority to them so these factories and workers have a chance to get back on their feet again. This is a chance to correct the mistake of cancelling in the first place and would hopefully help regain trust between the factory and the brand.

    1. I completely agree with your second answer: it is so important for fashion brands to use the surge in consumer demand to correct the ethical mistake of canceling orders. Regaining trust is pertinent to a globalized fashion industry’s persistence.

  8. 3) COVID-19 has shown us how reliant textile manufacturing is on technology, while apparel manufacturing is more reliant on human labor. Due to textile manufacturing being more heavily reliant on technology, they have been able to survive better due to the fact that the virus cannot affect the productivity of machines. However, the apparel manufacturing facilities have suffered more due to closures to keep their workers safe. In the post-COVID world, I think that the supply chain will continue to evolve into using more technology in all sectors. This not only will increase production accuracy and efficiency, but will keep companies safer in the future when it comes life-altering events, like a pandemic. Like I mentioned, key trends to look out for would be the transitioning into newer technologies in all sectors. Also, I believe that due to closures and cancelled orders, the fashion calendar will shift. I dont think that orders will be placed so far in advance in the future and will start to rely more heavily on smaller, faster orders to avoid the issue COVID-19 brought to the surface and made companies lose billions of dollars and factories left high and dry.
    6) If I was the sourcing manager of a US fashion brand, I would say that I would go back and give preference to factories that I cancelled orders due to COVID-19. It is really important to make great relationships with your vendors in the long run. Also, if the companies are still alive, our cancelled orders put the factory and their workers through much distress and turmoil. It is our moral duty to right our wrongs and help the factories that had been helping us in years past. By going back, we can hopefully help the factories get back up on their feet again and salvage a relationship that had been growing strong.

  9. 3) COVID-19 tells us that the textile and apparel supply chain has deeply-rooted regional supply chains and some softer globalized reliance. It also demonstrated the solidified regional supply chain in Asia, in which their product assortment and PPE production are vast, while the U.S. has some space for regional partnership self-sufficiency growth. The supply chain will continue to become more regional-based post-COVID, as lower tariffs and proximity to market are prioritized. Other trends to look out for with COVID recovery are speed to market, sourcing cost, flexibility, risk of labor and social compliance, and risk of environmental compliance.

    6) If I were a sourcing manager for a U.S. fashion brand, I would prioritize sourcing from factories in which we canceled orders. Although I know reality poses the “go wherever is cheaper” mindset, I believe that it is pertinent for corporate social responsibility to fund the factories we promised work to. Relationship building is integral to productive work environments, and breaking the trust of an overseas factory has consequences that could halt my company’s success. COVID’s destruction of trust in the industry has grave consequences for the overseas factories: unsafe working conditions are heightened with an airborne, respiratory virus, unliveable wages are especially unliveable with medical expenses, etc. I deem it as my prerogative to use my role to make the fashion industry a more just place.

  10. #2: Why does the so-called “Flying-geese” model (i.e., a gradual industrial upgrading moving from making labor-intensive products to making more capital intensive goods) occur in Asia, but not so much in the Western-Hemisphere over the past decades?

    I think the question posed is really great! The flying-geese model is something that has been seen in Asia, and is relatively unique to that region. I believe the main reason it has not been seen in the Western Hemisphere over the past decades is because most of the nations in this region have already been established as developed (like the U.S.) or least developed – there are not many “developing” economies. In Asia, there has been a lot of growth in the past decades, and many nations’ economies have taken dramatic shifts. Because of these fundamental economic changes, we can see changing shifts in production and consumer markets within that region.

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