Clothing Supply Network

Supply Network Design and Management for Global Quick Response (GQR) in the
Clothing Industry
Bart MacCarthy & P G S A Jayarathne
Nottingham University Business School
Jubilee Campus, Wollaton Road,
Nottingham, NG8 1BB, UK.
Email: bart.maccarthy@nottingham.ac.uk
Abstract
The clothing industry is truly global both in terms of the dispersal of clothing supply networks across the
world and in terms of the markets supplied. Clothing supply networks have continued to develop and
change as trade barriers have disappeared and the pace of globalisation has quickened. Supply networks in
the clothing industry need to develop responsive strategies in an international supply context. MacCarthy
and Jayarathne (2010) have defined Global Quick Response (GQR) as a strategy that seeks to achieve
accurate, rapid, and cost-effective response to specific markets dynamically by leveraging the potential of dispersed global
supply and production resources through lead time compression, effective real time information management, flexible pipeline
management, and optimal logistics and distribution systems. Much of the focus of Quick Response (QR)
initiatives in the clothing sector has been at the plant level. Here we discuss the implications of GQR for
network design and management in the global context. Examples of different network configurations
supplying different markets are described. Control, power and governance issues are noted. Open
pipeline strategies and staged postponement are discussed for the planning and management of
responsive clothing supply networks. The challenges in assessing responsiveness at the network level are
discussed. The relevance of GQR practices and strategies in other sectors is noted.
Keywords: Clothing industry, Global Quick Response, Network design and management, Open pipeline.
1
MacCarthy & Jayarathne (2010), Supply Network Design and Management for Global Quick Response (GQR) in the Clothing Industry,
15th Cambridge International Manufacturing Symposium, 23 24, September 2010.
1. Introduction
The clothing industry is truly global, both in terms of the dispersal of clothing supply networks across the
world and in terms of the markets supplied. Vollrath et al. (2004) describe how global trade in textiles and
clothing almost doubled in a decade to $334 billion, driven by market liberalisation and the removal of
trade barriers, the development of consumer economies and reductions in apparel and textile prices. The
sector is also highly mobile. Vollrath et al. (2004) also show the very significant changes that took place in
the geographical dispersal of global trade networks in textiles and apparel over a ten year period.
Three decades ago the majority of demand in the US and EU markets was supplied from domestic
production. With trade liberalisation and particularly the abolition of the Multi Fibre Agreement, the
changes in the nature of supply networks have been very significant. Garments worth $63 billion were
domestically supplied in the US in 1995 while garments worth $35 billion were imported. By 2005, the
respective figures were $45 billion and $65 billion (Abernathy et al., 2006). In the EU the number of
apparel manufacturing companies reduced by almost 6% in the period 2005 to 2006 (EMCC 2008).
China, India, Indonesia, Bangladesh and Pakistan were the major clothing producing nations in 2005
(Audet, 2007).
In addition to changes in the clothing supply base, trends and dynamics in demand have also
changed significantly in the last two decades. Todays apparel demand may be described as being highly
fragmented with a fashion influence now apparent in almost all product categories (Hunter et al., 2002).
Product variety and new product introduction have been accelerating in basic and in fashion garments
(Sen, 2008). The traditional two seasons per year have given way to frequent refreshes within a season.
Importantly, as well as the trends of compressing new product introduction time, multiple refreshes per
season and very quick response from suppliers, there is continual pressure on costs (Tokatli, 2007;
MacCarthy and Jayarathne, 2010a). The rise of supermarket clothing suppliers and the so-called Fast
Fashion retailers have further emphasised cost issues (MacCarthy and Jayarathne, 2010a).
Clothing supply networks contain different entities - designers, merchandisers, yarn producers, fabric
producers, trims producers, garment manufacturers, distributors, logistics and warehouse companies,
retailers, brand owners and the ultimate consumer (Wadhwa et al., 2008). Retailers and brand owners are
the most powerful entities in clothing supply networks (Gereffi, 1999; Tyler, 2006) and have a strong
influence on their configuration, organisation and management (MacCarthy and Jayarathne, 2010b). Here
we analyse how retailers and brand owners design and manage clothing supply networks for Global
Quick Response (GQR). Examples are provided of different types of clothing supply network that
operate in different ways. The principal dimensions on which clothing supply networks differ are
outlined. Responsiveness in clothing supply networks is then discussed and Global Quick Response
concepts are introduced. Open pipeline and staged postponement processes are described and their value
in dynamically managing clothing supply networks highlighted.
The challenges in assessing the

2
responsiveness of different types of global supply networks are discussed and the relevance of GQR to
other sectors is noted.
2. Differences in clothing supply networks
Retailers and brand owners exert significant influence on supply networks, resulting in differences in their
structure, the nature of the relationships within them and in their operating policies. We illustrate this by
considering the case of a major producer in Sri Lanka and the supply networks in which it participates
with a major retailer and a major supermarket.
Company SLA (note: company identities have been anonymised) is a very large Sri Lankan apparel
manufacturing company that supplies many well known retailers, brand owners and supermarkets. It has
competencies in apparel manufacturing, embroidery and garment embellishment skills. Figures 1 and 2
illustrate how Company SLA operates for two different types of retailers.
Figure 1 depicts the supply network typically producing complicated garments for a leading retailer.
Based on styles designed by the retailer, SLA develops samples and gets them approved either by the
retailer or by the retailers agent in Sri Lanka (note: the steps necessary in sample development are not
discussed in this paper). After approval of samples by the retailer, the retailers agent places orders with
agreed volumes, colours, sizes and delivery dates. These orders are then placed with an appropriate
production plant according to the request of the retailer or its agent after consideration of the
competencies of different production plants. It is important to note that fabric and accessory sourcing
decisions, including material specification and supplier selection are done mostly based on the
recommendation of the retailer or its buying office. Typically, the retailer has already approved the fabrics
at the product development stage. Sometimes the retailer may place only part of the order in Sri Lanka,
placing the rest in another country to minimize risk. In that case, all the suppliers, including those in Sri
Lanka, need to source from the same fabric supplier to maintain quality and consistency.
The agent of the retailer closely monitors the entire process to ensure garments are produced
according to their required standards and specifications and are delivered on time. Then, a final quality
audit is carried out mostly by the buyer appointed quality auditors at the buyers warehouse in Sri Lanka.
Then the final quality-approved garments are exported to the retail stores via a forwarding company
recommended by the retailer.
3
Buyer
appointed
Quality
Local50 60
%
Import4050%
Buyers main
stores
Factory
Factory
Reputable retail
brand - UK
Buyers SL
office
Fabric
Suppliers
Corporate
Office
Trims
Suppliers
Mostly local
Forwarders
Shipping
Main Factory
placing the apparel orders

Fabric and accessories sourcing flow
Finished apparel flow
Final quality check up before exporting
Little import
Figure 1: Supply Network for a Leading Retailer
Figure 2 depicts the supply network of a major supermarket in which SLA participates. Unlike the
network in Figure 1, here the company typically designs the garments and presents them to the retailer.
The buying team at the supermarket selects certain designs. SLA then proceeds with sample development.
In this case, the company may use the service of garment designers. After sample approval, orders are
placed including details of colours, volume, sizes, delivery dates, etc. These orders are then placed to the
specific production plants according to their production competencies and capacities. Fabric and
accessory sourcing decisions, including material specification and supplier selection are mostly made by
the company itself, unlike the case of the leading retailers network. The company does need to obtain
approval of the quality of all fabric and accessories from the supermarket in advance. They can then
proceed to source from any suppliers that can supply to the approved standards. The final quality audit is
also carried out by the manufacturing company itself. Finally, the approved garments are first sent to the
stores of such supermarket brands in Sri Lanka and then exported to the buyer via the forwarder
recommended by the supermarket retailer.
The two examples described here illustrate how different types of network have emerged to respond
to trends and dynamics in the global apparel market. A number of generic factors may be identified in
distinguishing different types of clothing supply network.
The degree of integration and the degree of permanency of the network are important. Temporary,
one-off supply networks operate differently to supply networks that have developed relationships and
4
modes of operation established over a period of time. Some networks may be strongly integrated across
all elements, whilst others may have strong integration across upstream or downstream entities only.
The degree of involvement of retailers in dealing with the supply base is a critically important
distinguishing factor. Retailers may deal directly with a prime manufacturer in the supply base or retailers
may use agents (buying offices) as intermediaries when dealing with manufacturers. The latter approach
changes the nature of the relationships and responsibilities in the supply network.
Buyers main
stores
Local50
60
% Import4050%
Forwarders
Shipping
Factory
Factory
Supermarket
brand - UK
Fabric
Suppliers
Corporate
Office
Trims Suppliers
Mostly local
Main Factory
placing the apparel orders

Fabric and accessories sourcing flow
Finished apparel flow
Final quality check up before exporting
Little import
Figure 2: Supply Network for a Major Supermarket
Process ownership is also important design process ownership and sourcing process ownership in
particular. Design of garments may be carried out by retailers, retail agents, manufacturers, or as a
collaborative effort in different networks. Networks where retailers make the fabric sourcing decisions are
different to networks in which sourcing is done either by manufacturers or collaboratively by both
retailers and manufacturers. Actual ownership of fabric is also significant, distinguishing integrated
networks from contractual networks.
Garment complexity is a factor in distinguishing different networks. Designs with complicated
garment structures, demanding specifications and /or significant garment embellishments (e.g.,
embroidery, washing) require additional resources, skills and competencies than are required to produce
simpler garments. These complicate sourcing decisions, as well as routing, capacity and quality
management.
5
The nature of the involvement of retailers in quality assurance is also important. A retailer may assign
external quality experts to assure the quality of garments by conducting final quality audits or they may
devolve responsibility to manufacturers to carry out quality assurance activities.
Finally, supply networks differ with respect to power dependency between network entities and how
power is distributed across upstream and downstream supply network entities and the governance
structures for eth network.
The authors have developed a taxonomy of clothing supply networks based on these distinguishing
characteristics, which they continue to refine (MacCarthy & Jayarathne, 2010b).
3. Responsiveness in supply networks
Responsiveness has been defined in different ways in the operations management literature (e.g.,
Kritchanchai and MacCarthy, 1999; Reichart and Holweg, 2007). The importance of Quick Response
(QR) strategies has been emphasized in the clothing industry since late 1980s (Al-Zubaidi and Tyler,
2004). Common elements identified by MacCarthy and Jayarathne (2010a) in such strategies include:
effective information management and fast and accurate information transmission; utilising flexible
production resources and developing technological and automation solutions where appropriate;
developing supply chain partnerships and strong inbound and outbound logistics systems. In addition,
QR must be an explicit part of an organisations strategy and every opportunity for lead time compression
needs to be exploited in design, product development, planning and order fulfilment (MacCarthy and
Jayarathne, 2010a). However, much of the research on, and discussion of QR strategies in the clothing
industry and much of the focus of QR initiatives has been on clothing plants.
Global Quick Response
As contemporary clothing supply networks operate globally, Quick Response strategies need to be
considered in the global context. With this wider context in mind, MacCarthy and Jayarathne (2010a)
defined Global Quick Response (GQR) as a strategy that:
seeks to achieve accurate, rapid, and cost-effective response to specific markets dynamically by leveraging the potential of
dispersed global supply and production resources through lead time compression, effective real time information management,
flexible pipeline management, and optimal logistics and distribution systems.
GQR strategies in the clothing sector need to incorporate QR concepts but need additionally to
focus on the performance of the supply network as whole in the international context.
Managing the network for responsiveness open pipeline approaches
Sourcing from geographically dispersed networks typically results in longer lead times than occur with
domestically sourced production. When such networks are purely contractually based with impermanent
relationships, sourcing may also lack flexibility once commitments are made. There are many challenges in
6
planning and managing international clothing supply networks to ensure appropriate levels of
responsiveness.
The more cohesive types of network discussed in section 2 above that have emerged in the clothing
sector tend to adopt more flexible strategies based on open pipeline and postponement concepts to
ensure an appropriate degree of responsiveness to market demands (MacCarthy, 2010; MacCarthy and
Jayarathne, 2010a). The open pipeline is particularly important for ongoing replenishment orders where
market requirements are changing dynamically.
Postponement is an important generic strategy in coping with high variety and customization when
precise demand requirements are uncertain (Van Hoek, 2001). The most common type of postponement
referred to is form postponement. However, it is less relevant in the clothing context than in other
production environments. In clothing supply networks upstream fabric supply and downstream
distribution are very significant components of overall lead time (MacCarthy, 2010). For a number of
reasons, postponement in planning is more important in the clothing sector than form postponement.
Figure 3: Staged planning postponement in a clothing network (from: MacCarthy and Jayarathne, 2010a)
The power and control exercised by retailers and brand owners in supply networks has been noted
earlier. The retailer values the flexibility to delay precise commitments to volumes, styles, colour and size
mixes. However, manufacturers in the supply base value early commitments, allowing long lead times to
source and plan production and to maintain stable, controlled and low cost operations. Staged planning
postponement is a way of balancing these opposing desires. It is essentially a flexible make-to-forecast
approach that acknowledges the hard constraints in the supply process but that enables more precision in
ensuring supply matches demand.
MacCarthy and Jayarathne (2010a) describe a generic staged planning postponement process
operated over a rolling planning horizon shown in Figure 3, which commences with aggregate capacity
planning and moves though key stages for fabric procurement, rough-cut capacity planning and detailed
7
capacity and materials planning. Precision and detail in order commitment increase at each stage in the
process.
The details of any staged postponement strategy will differ depending on the nature of the market,
the complexity of garments produced and the nature of the supply network. Many factors may influence
the timing of commitments and the degree of flexibility allowed, including supply chain relationships,
sourcing lead times and importantly the power distribution across the supply network. Maximum
tolerable delays for key commitments need to be agreed and respected by key supply network partners.
The nature of commitments in different networks structures provides an interesting line of research.
Maintaining a responsive network
In order to operate a flexible and responsive open planning pipeline a healthy network needs to be
maintained. Although fashion trends can be difficult to predict, often changes from one season to the
next are more gradual. The same classic styles may be evident over a number of seasons. When style
changes are gradual, a strong healthy network should be capable inherently of flexing capacity and
absorbing seasonal and in-season changes for the required volume and mix levels.
There are often significant market opportunities when major changes in fashion occur. The retailer
or brand owner that can respond quickest may be able to generate significantly higher margins than is
typical in the industry. However, major changes in fashion may necessitate the acquisition of resources
and capabilities that were not required previously and may make some existing capabilities redundant,
thus challenging the strength and responsiveness of the network. Strong market intelligence systems and
effective communication with supply partners will help in limiting uncertainty, highlighting quickly where
additional capabilities may be required.
Retailers and brand owners need to understand where critical interfaces exist those linkages in the
network with the greatest influence on responsiveness and lead times that demand effective planning and
management with supply network partners. Rapid supplier development programs may be needed to
facilitate supply and capacity expansion, e.g. in the sourcing of a new type of fabric for instance. Effective
quality systems also play a part in enabling responsiveness when major fashion changes occur. Early
detection of problems and identification of appropriate solutions will enhance network learning.
4. Measuring GQR in clothing supply networks
Assessing the health of a supply network requires some indication, assessment or measurement of its
responsiveness. Here we consider the challenges in doing so.
As noted earlier, MacCarthy and Jayarathne (2010a) have identified core elements in QR systems and
applications in the clothing industry. These are illustrated in Figure 4. They are: fast and accurate
information transmission (IN); flexible production resources (FP); utilisation of technology and
8
automation where appropriate (TA

TA); fast logistics (FL); lead time compression (LT)
(LT); systems integration
across the supply network (SI).
Figure 4 gives examples of specific
s
items under each of these dimensions that have been derived
from process analyses from several QR initiative reported in the literature (e.g., Ko et al (2000), Fernie
and Azuma (2004), Giunipero et al (2001), Sullivan and Kang (1999), Ko and Kincade (1999), Kincade
(1995),
5), Hunter et al 1992, Forza and Vinelli 1997, 2000, Lowson et al 1999, Perry and Sohal 2001,
Oxborrow 2000, Al-Zubaidi
Zubaidi and Tyler 2004, Birtwistle et al 2006, Gunasekaran et al 2008).
Figure 4: Example dimensions of GQR
The authors of this paper have studied these QR dimensions in particular entities within clothing
supply networks. However, for GQR these
t
dimensions need to be considered at the network level. It is
worth noting that no study has been carried out at the network level in the literat
literature. Gauging the
responsiveness of a network is non-trivial
non
and doing so gives rise to significant challenges. Some of
these are noted briefly here.

In general, the prime manuf
ufacturer within the network has the clearest pers
perspective on, and the
strongest level of interaction with both the upstream and downstream parts of thee network. The prime
manufacturer needs to be able to correctly interpret retailer requirements, anticipatte future requirements
and engage in proactive planning with upstream and downstream
downstream network partners
partners. The prime is also
typically charged with solving operational problems in the network to ensure supply and therefore knows
9
MacCarthy & Jayarathne (2010), Supply Network Design and Management for Global Quick Response (GQR) in the Clothing Industry
Industry,
15th Cambridge International Manufacturing Symposium,
Symposium 23 24, September 2010
2010.
where critical interfaces occur. The prime manufacturer thus plays the critical role in determining the
ability of the network to respond. However, as noted in the discussion on actual networks and their
composition in section 2, there may also be other important entities operating in eth supply network. In
particular agents play a crucial role in some types of networks. They have detailed knowledge on
requirements and supply resources and may exercise significant power on network operation depending
on the type of network. Their perspectives on network governance and how the operating policies
deployed are also important in assessing GQR in clothing supply networks.
Further elements indentified by MacCarthy and Jayarathene (2010a) in successful QR initiatives are
an organisations strategy and its prevalent culture and whether they truly support responsiveness.
Investigating these softer dimensions at the network level is also important. All of these dimensions are
considered in authors current work on GQR in clothing supply networks.
5. Extending GQR concepts to other sectors
The GQR challenge described in this paper is by no means unique to the clothing industry. GQR goals,
requirements and constraints are strongly relevant in many sectors that seek to leverage the potential of
dispersed global supply and production resources to achieve accurate, rapid, and cost-effective response.
Indeed some of these challenges are universal. In addition, demand factors including global brands and
global advertising, are extending the spread of markets for many types for products.
There are direct analogues to the clothing sector in many consumer product sectors. The relevance
of supply network structures observed in the clothing sector to such sectors needs to be investigated.
Product and market characteristics differ, as do supply networks, including their degree of integration and
their degree of permanency, the relative dominance of upstream and/or downstream players and the
power and governance that prime players can exercise or impose on the network. Thus, the study of
GQR in other globally dispersed industries provides many avenues for further research.
10
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Supply Network Design and Management for Global Quick Response (GQR) in the

The challenges in assessing the

placing the apparel orders

Figure 1: Supply Network for a Leading Retailer

placing the apparel orders

Figure 2: Supply Network for a Major Supermarket

automation where appropriate (TA

Figure 4: Example dimensions of GQR

and doing so gives rise to significant challenges. Some of

these are noted briefly here.

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