Globalization and Primark’s Sourcing Model: Discussion Questions from Students in FASH455

Primark’s apparel sourcing base (Data source: https://openapparel.org/)

Discussion questions:

Question #1: Based on the reading about Primark’s global sourcing, how to understand the complex social, economic, and political factors involved in apparel trade and sourcing today?

Question #2: Primark sources from 28 countries work with around 928 contracted factories. What are the pros and cons of using such a diverse sourcing base?

Question #3: Near-shoring, meaning bringing manufacturing closer to home, is growing in popularity. Does it mean globalization is “in retreat”? What is your view?

Question #4:  In the current state of the fashion industry, ethical labor laws are really important, especially to consumers. For example, activists are protesting Pretty Little Thing in London to protest the low wages paid to garment workers at the factories that Pretty Little Thing sources from. With this in mind, do you think that it would be wise for Primark to look for sourcing opportunities outside of Asia? Or do you believe Primark’s Ethical Trade and Environmental Sustainability team is sufficient to ensure ethical and sustainable sourcing?

Question #5:  As of May 2021, Primark has the most workers in its Asian factories. Should we still call Primark an EU company? Does a company’s national identity still matter in today’s globalized world?

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

Author: Sheng Lu

Professor @ University of Delaware

13 thoughts on “Globalization and Primark’s Sourcing Model: Discussion Questions from Students in FASH455”

  1. #2: I believe that it is beneficial that Primark uses such a diverse sourcing base in order to acquire their inventory. In sourcing from a variety of different factories and countries, Primark has the ability to have many different diverse looks as well as fabrications. The brand is also aiding the employment of many individuals across the world. However, the con to sourcing from such a diverse range of factories, raises the question of: Does Primark know the true conditions that the factory workers endure? In using 928 contracted factories, there is no way for buyers from the company to know the true ethical issues that can be happening in the factories they are sourcing from. Brands like Nike, send sustainability experts to many of the factories they source from in order to ensure the conditions are ethical and safe. I wonder if Primark does the same. Being a multi-million dollar company, it certainly has the means to do so.
    #3: I do not believe that globalization is in rear view. With production times only getting faster and transportation never short of advancement, globalization is here to stay. In bringing manufacturing closer to home, some companies may choose to source some of their goods from closer factories. However, I do not believe that all items a company sells can be sourced close to home. Department stores like Macy’s and Neiman Marcus carry goods across departments as well as industries and would be insufficiently stocked if they were only sourcing close to home. Globalization fuels our world and without it, we would not have many of the goods we enjoy as well as depend on.

  2. #3) I am in agreement that I believe globalization is here to stay. I think the popularity around near-shoring has a lot to do with the challenges that companies faced during the COVID-19 Pandemic when borders were closed, and many products were unable to be produced or transported. The idea of being able to solely depend on our own resources and manufacturing feels very secure, but it does not solve many of the problems our world faces today.

    #5) In the circumstance that Primark has the most workers in Asia, but is considered an EU Company, I think that they would remain an EU Company. I don’t think National Identity necessarily matters, especially today now that the world and fashion industry are so globalized. I feel that I have always considered company’s national identities based off of where the idea for the retailer originated, not in regard to where majority of their manufacturing labor take place.

  3. Question #2:
    Some of the advantages of a diverse sourcing base influenced cost, skilled workforce, and increased production capacity. Competition in sourcing allows Primark to have a choice in the industry. They can choose cheaper manufacturers outside of the U.K. while still ensuring a quality product. By cutting down on labor costs, the money can be directed toward other steps of production. Another advantage includes skilled workers from China, Taiwan, or Indonesia – all experts in their field. This saves time in the process and marginalizes failure. They are kept current on new techniques and awareness of how to implement operations. This keeps the process efficient. Lastly, global sourcing gives companies an upper hand when increasing production capacity. Some countries far exceed others in capacity and it makes an obvious solution to countries that lack. I think one of the obvious disadvantages would be communication. A language barrier may set back dates and cause misunderstanding. Operations might not run as smoothly, with lines blurred. Politics between country relationships is another concern. Political instability can cause rifts in supply lines, delaying or halting routes. Finally, shipping costs would the final disadvantage. At times, a cost equation might find domestic sourcing might prove more cost-efficient than international.
    Question #3:
    I believe in our current economical crisis of 2022, near-shoring is rising and globalization is “in retreat.” However, I believe it is a temporary reaction to our current post COVID world, one that will not last over time. In a supply chain crisis, panic might influence a brand’s decision to turn local. With uncertainty and expensive production and shipping in other countries, turning inward to near-shoring might provide stability for smaller companies. Looking to become independent of other countries allows a sense of control and certainty many are searching for today. In the end, I believe that globalization will always exist as resources are scarce. The flight or fight panic is driving near-shoring but as stability creeps back into our supply chain, globalization

    1. great thoughts and comments! Two thoughts: 1) if companies can take advantage of the resources around the world, why not? also, as we discussed in the class, apparel companies today “make anywhere in the world and sell anywhere i the world.” If Primark has the ambition to expand internationally, there is no reason to cut its global production network. 2) If near sourcing means moving production closer to the end market, for a global fashion brand, it still makes sense to have a global production network as its markets are everywhere in the world.

  4. #4 I think that if Primark is following the correct labor laws and protecting their employees in various different ways than they shouldn’t have to look for sourcing opportunities outside of Asia. The most important part of a company having a factory and stating that they have an Ethical Trade and Environmental sustainability team is being transparent and being able to make documents and efforts public information. I think any company needs to take responsibility for their factories and correct labor laws to succeed in the future.

    #5 I think Primark should still be called an EU company just because a company has more workers in a different country than where it originated, it was still established and created in the EU. Since the industry is so globalized, the location of workers shouldn’t determine what country we consider the company to be. If we were to consider this for all companies many of them would no longer have the same national identity as they do now.

  5. Question #2: There are definitely pros and cons to this situation. The pros would be that you they are able to keep up with demand and trends because they can spread the work out across all of their factories. They also have the ability to specialize their labor if needed. The cons would be that it can be hard to manage such a large quantity of factories. This could lead to issues with making sure that ethical practices are being followed and buildings are up to code because they can’t be everywhere all at once.

    Question #3: I do not believe that globalization is at threat. In this day and age, everyone relies on each other. We have materials and resources countries need and vice versa. Just because some manufacturing may be brought closer home, does not mean that globalization will be over. We will continue to outsource what we need and export what we can. Near-shoring may just allow us to keep a better eye on what is going on during all steps of manufacturing.

  6. Question #2: Primark sources from 28 countries work with around 928 contracted factories. What are the pros and cons of using such a diverse sourcing base?

    The pros of using such a diverse sourcing base is that Primark has access to so many different resources and materials that they would not otherwise have. Another pro is that the work can be divided between so many factories that it reduces the pressure and workload for each. A con is that because there are so many factories and they are spread out, it can be hard to stay on top of each one and make sure that everything is operating the way it should be (ethical practices, time management).

    Question #3: Near-shoring, meaning bringing manufacturing closer to home, is growing in popularity. Does it mean globalization is “in retreat”? What is your view?

    I do not believe that globalization is in retreat. Although near-shoring may align with the values of certain companies, others thrive on globalization. Consumer demand is what drives brands to produce what they do and globalization allows those products to exist in the U.S. Without the continuation of globalization, brands would not be able to keep up with trends. Consumers would become uninterested and stop supporting these companies. Near-shoring will never take the place of globalization for this reason.

  7. Question #3: I agree with many of my classmates that globalization isn’t going anywhere. That being said, I’m not surprised that bringing manufacturing closer to home is becoming more popular. Many corporations are transferring manufacturing out of China due to tariffs and rising shipping costs, so it’s only natural that they’d opt to move factories closer to home to reduce lead times. However, globalization is such an important part of trade in the world we live in, I don’t think it will ever be completely gone. Individual countries don’t have the time, labor, or physical resources to manufacture everything themselves. Every country relies on other countries too much for globalization to ever become obsolete.

    Question #5: I believe Primark should still be considered an EU company. According to the smiling curve, manufacturing adds the least amount of value to the product. I believe that a company’s national identity should align with where a large portion of the value comes from. In Primark’s case the concept was conceived in the EU and the concept adds a large amount of value. I don’t think a company’s national identity is as important to consumers seeing as we live in a globalized world where most of our products come from other countries. I do think it’s important, especially with consumers’ increasing focus on transparency, that Primark discloses where it’s products are made. It is important to note where manufacturing takes place but I don’t think it is a reason to call Primark an Asian company.

  8. Question #2: A pro of Primark having so many sourcing bases is that hey have access to a lot of resources that other companies might now have. Also having a lot of their factories in Asia helps them save money and still lets them have access to all of their materials that would be harder to find in other countries. China, Bangladesh, and Pakistan are developing countries which means they are more capable of making the apparel than most countries because they have access to the resources. A con is that since most of their factories are in Asia, a lot of those countries don’t take care of their workers and have horrible working conditions. That could cause a scandal if anything bad happens with one of the factories. Another con is that since they have so many factories, I find it hard to believe that they know what’s going on in every place. Especially since Primark is considered a fast fashion company, their quality isn’t always the best with their products.

    Question #4: I think it would be smart for them to look at other options. Even though they have ethical trade and sustainability doesn’t mean nothing can go wrong. I remember when I was in my fashion sustainability class I learned about Primark. They had a scandal where one of their UK employees was hiring illegal workers and wasn’t paying them a fair minimum wage. I also think it’s a good idea because they don’t own any of these factories which means they don’t control their supply chain. Even if Primark has the right intentions, the employees in these countries could be doing something different when one of Primark’s representatives aren’t there to watch.

  9. 2. Their are definitely pros and cons to having a sourcing base as diverse as Primark’s. For starters, following and during the global pandemic, it was beneficial to have a diverse sourcing base that was able to adapt and adjust to various issues this caused. Whether it be places having a spike of outbreaks and shutting down, shipping delays, or places recovering, they had a choice of best place to source from. Cons to this could be that you have less control over sourcing and run a less tight business by having so many sourcing bases with all different standards and protocols.

    3. While many do see near shoring as being more sustainable and beneficial due to shorter transportation times, globalization does not necessarily mean retreat due to the fact that certain products or skills are only available, affordable or possibly even more sustainable if sourced further away. The global model also works better for some who are located in a geographical region that does not support or have the means for manufacturing nearby. In this case, globalization is crucial to the success of the brand or company and maybe even the economy of said country.

  10. Globalization is the process through which a company or other entity gains worldwide clout or begins to operate on a global scale. Two specific debates about globalization that I have found in the article are Globalization creates new career prospects while also displacing workers. Many of them are also earning less or have given up working altogether. Globalization has also narrowed the gap between the rich and the poor. Because the advantages are widely spread and not as easily understood as particular losses to specific enterprises or workers, globalization can be difficult to sell to the general public. The other side of the argument regarding Globalization is that it can be said that it helps gain access to new cultures, helps access new markets, as well as lower the costs of products. Mercantilism is still important in the twenty-first century, with a similar political purpose but slightly different economic tools for controlling property rights. China aimed to establish an export-driven strategy by increasing trade surplus by collecting foreign exchange reserves. It is believed that its continuous battle with liberalism will have a significant impact on the global economy’s future. Today, mercantilism is widely seen as an antiquated and ineffective set of economic policies.

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