An assessment of sourcing strategies in the apparel industry

Journal article, 2007

Purpose – The purpose of this paper is to empirically identify different types of sourcing strategies applied in the apparel industry, and to explain how various sourcing strategies are related to the apparel firm’s characteristics, prerequisites and supplier performance. Design/methodology/approach – This paper is based on a survey that was sent out to Swedish apparel firms. Commonly applied sourcing strategies, in terms of supply markets and supply channels, are first derived using cluster analysis. These strategies are then linked to relevant firm characteristics, prerequisites and supplier performance measures, where significant differences between groups of firms applying various sourcing strategies are targeted. Findings – Five commonly applied sourcing strategies are identified. Further, several significant differences – with respect to product issues, organizational issues and supplier performance – are found between the firm groups. Research limitations/implications – Several future research areas in conjunction with this study can be derived by widening or changing the scope. For instance, other industries as well as apparel industries in other countries can be targeted and thus provide valuable comparisons. Practical implications – Assessing the contextual appropriateness of sourcing strategies provides a strategic sourcing benchmark for firms across industries. Notably, apparel firms’ experience in exploiting low-cost supply markets may provide valuable insights for firms that just recently have recognized the potential of these markets. Originality/value – This paper provides a contextual understanding of how various sourcing strategies are utilized in the Swedish apparel industry, and thereby contributes to the general conception of sourcing strategies.