Conditions to authorise subcontracting in fashion and apparel industry : a brand's perspective

Abstract: In current supply chains, the context of subcontracting is majorly connected to unauthorised subcontracting with negative conjunction which has created the fear of discussing subcontracting. However, previous research presents subcontracting as a common practice within fashion and apparel supply chains, however, nearly no study has focused on elaborating the authorisation process. Therefore, this thesis explores the potential of authorising subcontracting to bring benefits for fashion and apparel brands, and aims to identify conditions from a brand’s perspective which need to apply for the authorisation process. Underpinned by the social exchange theory, circumstances within buyer-supplier relationships are discussed in which the ideal balance of power-dependence may lead to an open and effective communication environment for the treatment of subcontracting. Empirical data is collected through seven interviews with a qualitative research outlook. This revealed the significance of buyer-supplier relationships within which honesty, trust and transparency are building the basis for the discussion of subcontractors. Moreover, the findings further indicate that brands may have the benefit of having better capacity availability, more effective lead times, and the potential to have a broader production specialisation when embedding and authorising subcontractors. However, the conditions of keeping full control of the subcontracted production needs to be ensured by the brand directly or through the supervision of the tier 1 supplier to ensure high production quality standards. This study provides a starting point to understand the process of communicating and authorising subcontracting within brands and tier 1 suppliers which provides worthful insights for scholars and practitioners. From a theoretical perspective, this research aims to highlight the positive aspects of subcontracting for brands while leading the research stream towards the context of authorising subcontracting which has been lacking so far. In addition, from a practical perspective, this study aims to support brands and additional stakeholder groups in understanding and supporting the authorisation process. This may be the solution to tackle the issue of unauthorised and hidden subcontracting within the fashion and apparel industry.