Such companies have been innovative in supply chain man agement by focusing

Such companies have been innovative in supply chain

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and manufacturing sites. Such companies have been innovative in supply chain man- agement by focusing upon design and quality management issues and then identifying outsourcing sites for lower value-added manufacturing (Magretta, 1998). Acting as intermediaries they help clients (Western retailers) with product development by locating best-cost capabilities as well as timing and market response capabilities, significantly increasing the innovation potential for such retailers (Tran et al ., 2011). They add value to the latter’s products by tapping into their network of external specialists to enhance the agility and mass-customization strategies. One of the biggest trading and logistics companies is Hong Kong-based Li & Fung, which has built a reputation on being able to meet the new strict terms for quality, price and speed of delivery (see Financial Times , 2013; McFarlan et al ., 2007). This firm has also benefitted from technological innovations and supply chain coordina- tion, which enable it to take orders from small firms, combine them and realize production and distribution scale economies (Schary & Skjøtt-Larsen, 2001). Key to its success has been its ability to reconfigure supply chains to emphasize flexibility, innovation and speed. Intermediaries such as Li & Fung provide the requisite component of an emerging manufacturing model that emphasizes not just cost but also quality, speed and greater product variability. Second, improved channel integration has meant that supply chains are logistically equipped to deliver goods both cheaply and quickly (Barnes & Lea-Greenwood, 2006). Retail marketing innovations that emphasize inexpensive, fashion-basic goods have capitalized upon trade liberalization (particularly the elimination of the MFA) that has effectively removed a de facto tax on clothing. Reduced tariffs and fewer limitations on where manufacturing can be sourced have kept production costs for most garments low. With real-time sales information, retailers can order and re-order smaller quantities of goods much more frequently than in the past, thus lowering their own inventory costs and enabling them to keep retail prices low. Despite these changes, many retailers still find themselves captive within a large scale mass-fashion model whereby standardized goods that are sourced mainly in Asia are brought more quickly to consumer markets (Doeringer & Crean, 2006). The inherent limitations of this model continue to be exposed by changes in consumer behaviour. Short production runs and reduced lead times enable firms to more closely match supply and demand but the continued uncertainty of the latter means that many still face close-outs and unsold items. It also means that they continue to compete more on price than on quality or design attributes.
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253 GLOBAL COMMODITY CHAINS AND FAST FASHION Fast fashion Realizing that technological innovations and improved channel integration provided the logistical means to rationalize the supply chain through shortened turnaround times, a number of firms used these improved ways of matching supply and demand to capitalize upon changing consumer behaviour. This was particularly the case with
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