Mapping the flow Of Apparel in a Wholesale Company
Abstract: Globalization that diminishes the barriers to trade worldwide has transformed the structure of production and increased the global competition in the textile and apparel industry. Especially, the elimination of quotas on January 2005 has totally changed the whole scenario of the apparel industry. A boom has been noticed in the emerging markets. Buyers shift their maximum orders to the low cost countries to increase their profit margins. China has gained its popularity among the European and American buyers because of the cheap labor and large scales of production and has become the world’s largest exporter of textile and apparel. The traditional competitive factor among the buyers is the lower cost of the product but the changing markets trends and demand volatility pushes the buyers to focus also on quality and lead times in addition to price. Due to the huge competition among the cluster of brands, retailers and wholesalers, lead time is becoming critical as longer lead times increases the risk of bottleneck to sales. China is the most important apparel supplier for the EU (especially Germany, the UK, and France) because it provides the cost benefit to the sourcing companies, but at the same time, it increases the lead times and also has more environmental impact in terms of pollution because of the long geographical distance.This thesis highlights that there is a remarkable rise of the labor cost in China, noticed for the last couple of years, which has reduced the competitive factor of price while sourcing from China. This is also an upcoming challenge for the whole world with regards to sourcing strategies. Many sourcing companies are shifting their shares away from China in order to achieve their desired profit margins. Turkey may be an alternative sourcing destination for the European apparel buyers and wholesalers because of its competitive labor cost, favorable government policies, flexibility, sustainability, and proximity to Europe. In this thesis, a pilot study is carried out to determine the relationship and effects of lead times on sales. This thesis also describes the effects of relationships among the business partners on the supply chain flow. It is noted through several pilot studies that the organizations who work in collaboration with their supply chain partners can significantly improve their supply chain efficiency by reducing the inventories, markdowns, lead times, lost sales, and increasing forecast accuracy. There are several tools in use for collaboration such as Vendor Managed Inventory (VMI), Electronic Data Interchange (EDI), Just in Time (JIT), Customer Relationship Management (CRM), and Collaboration, Planning, Forecasting, and Replenishment (CPFR). In this paper the CPFR implementation steps, benefits, and hindrances are discussed in detail.
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