Economic Competitiveness in the Global Textile Supply Chain: Examination of Logistics Cost Structures

Abstract

The purpose of this research was to examine the logistical cost structures along the global textile and apparel supply chain and their relationship to competitive advantage, strategy, performance and overall economic competitiveness. The topics were developed in accordance with the model proposed in Logistics, Strategy and Structure: A Conceptual Framework written by Stock, Greis & Kasarda in 1999. The research focused on the supply chains within the US Bed-bath and Bottom weights markets with companies using purely domestic, global and mixed strategies. A sample group involving US retailers, US/US manufacturers, US/US-Offshore manufacturers and sourcing agents was chosen for each market. As part of a collaborative research study focusing on economic competitiveness, a questionnaire was developed and administered during information interviews to the selected sample. Section II of the survey posed questions directly dealing with logistics costs, competitive advantage, strategy and performance.

With regard to logistics costs, the research sought to determine the most significant costs, as pertaining to the textile and apparel supply chain, as well as define them. It also examined each logistics cost structure and its relation to the finished product cost. Regarding competitive advantage, the research was used to provide and verify a definition. It also determined the advantages resulting from the use of specific logistical chains and cost optimization plans with their relationship to economic competitiveness. The research was also used in order to determine whether there was a relationship between logistical cost structures and economic competitiveness in terms of strategy and performance. Companies used for the information interview process were selected on the basis of annual sales and growth rates from 1999-2003, reputation, sourcing strategies and product mixes. The finalized sample contained 18 companies with 33 total respondents having an average of 25 years of experience. Four trips were made in order to individually interview executives from each sample company; each to Hong Kong, New York City, Miami and a driving trip of the Southeastern US.