Traditionally, the competition in the textiles/clothing sector has been among two categories of operators. The first group called ‘clothing operators’ (manufactures or retailers) who were specialists in forecasting and influencing the fashion trends. They enjoyed strong brand image and used to undertake marketing a product designed and developed long before the actual time of consumption. The second category of firms used to offer competition based on their ability to act fast by rapidly adjusting to the prevailing fashion trends created by others. They were able to supply products already known to be a market success as they specialized in ensuring ‘speed to market’. They were known for their rapidity and flexibility. Thus the key factors for success were different for these two categories of operators.In the current globalised scenario, the factors of success have considerably changed in view of the changing life style and very wide options of sourcing available to international buyers or retailers. Again we can categorize them among two groups. The first one consists of retailers who adapt a global sourcing strategy and go for the cheapest sources worldwide in order to maximize gross margin. They are willing to accept lower fashion content in terms of design, and are also not much rigid about the yarn or fabric specifications. The second group is that of retailers whose main concern is to decrease ‘time to market’. They don’t mind paying a higher price to suppliers who offer them the advantage of lower logistics cost and an opportunity to compensate the lost sales. There is a growing tendency among retailers to choose those alternatives which result in a faster supply chain and that are not too distant either culturally or geographically. This minimizes the impact of any inevitable redesigning of the planning processes as a result of inaccurate forecast or any sudden change.
The textiles and apparel sector (t/a) is known for its complexity. Consumers’ erratic behavioral patterns with regard to buying and consumption coupled with the short life cycle of a typical garment cause considerable difficulty in forecasting demand. Further confusion is created due to the huge number of production alternatives available globally under the free market scenario. In addition, considerable modernization has taken place in the distribution network in recent years. As a result, new formats have been introduced and large-scale distribution has begun to play a key role in the main European countries and also in the American market. It is clear that pressure on suppliers to search for new sources of supply will only increase with consumers demanding more variety, more fashion, more product access and lower prices. In addition, top retailers place greater risk arising from added variability of product demand further up the supply chain, forcing suppliers to balance the direct costs of sourcing against the indirect consequences of unsold inventory. Decision makers are under additional stress arising out of global phenomenon of currency volatility, political uncertainty and a number of compliance issues. Growing regionalization of supply chains seems to be inevitable in view of increasing importance of speed and flexibility driven fast-fashion. Overall, sourcing has become a vital process in the context of corporate functions and has acquired a central role as part of the clothing retailer’s functions.