LGT5034 Global Sourcing and Supply

Individual Assignment






Is Fast Fashion a Global Sourcing Strategy?

No. Words: 1446














Journal
Fast Fashion in a Flat World: Global Sourcing Strategies, Barbara Mihm, University of Wisconsin- Stevens
Point, USA, 2010

Summary of the Journal
The aim of the chosen Journal (Fast Fashion in a Flat World: Global Sourcing Strategies) is explore a
model for understanding sourcing decisions made by retailers involved in apparel business. For this
purpose, the concept of fast fashion is used by applying the model to two different retailers (Zara and
Kohls) that have taken very different sourcing decisions to run their business. By analyzing the
corporate strategy of these two retailers, a shortlist of factors that influence sourcing decisions is
provided. Finally, key financial metrics are used with the aim to compare the results of the sourcing
strategies adopted by the two retailers.

Abstract
The purpose of this paper is to compare the consistency between the real objective and the final result
of the chosen Journal that in my opinion is not coherent. First, the consistency of the Journal is
challenged addressing the lack of understanding of the concept of fast fashion as a global sourcing
strategy. Second, this paper explores the fact that the journal wrongly confuses the sourcing strategies
of an organization with its supply chain management strategies. Third, the scope of the concept of
sourcing is addressed due to the misunderstanding showed in the Journal that sourcing just refer to
the products to be sold. Finally, conclusions and recommendations are made.

Introduction
The title of the Journal suggests a connection between the concept of fast fashion and the development
of global sourcing strategies. However the approach taken in the Journal doesnt show strong evidence
of this connection. The Journal based all its argument based in the following assumption: There are
three basic methods a retailer can use in sourcing brands carried exclusively by that retailer. These
methods can be depicted on a continuum, moving from high levels of control to lower levels of control.
This approach doesnt include an explanation of the concept of Fast fashion and its relationship with a
global sourcing strategy. Instead of that, the Journal jump to describe a model that allocates a retailer in
any of three positions based in the level of involvement within the supply chain.


Outsourcing Model for Fast Fashion
Source: by the autor

The above model might bring an understanding of the supply chain strategy that a retailer could
implement, but it doesnt explain the global sourcing strategy of that retailer.


Analysis
As mentioned in the abstract of this paper, my purpose is to compare the consistency between the real
objective and the final result of the chosen Journal based in the following points:

1. Lack of understanding of the concept of fast fashion as a global sourcing strategy.
2. Sourcing vs. Supply chain management
3. Scope of global sourcing


1. Lack of understanding of the concept of fast fashion as a global sourcing
strategy.
The concept of fast fashion is mainly related to the quick response needs of retailers. However, the
quick response demands were then essentially only revolving around replenishment cycles. There are
differences between the quick response considerations revolving around replenishment cycles and the
quick response considerations lead by fast fashion cycles (where there is low or no replenishment).
(Nebahat Tokatli, 2007)

A precision need to be made when we talk about fast fashion, quick response and fast fashion are not
the same. Quick response is different from fast fashion, because quick response is a supply-side
initiative while fast fashion is a consumer-driven initiative (Fast fashion and supply chain management,
2005). This precision allows us to support the argument that linking the concept of fast fashion with
global sourcing strategy is wrong.

Fast fashion is a consumer-driven initiative that has a strong relationship with the aim of the retailer to
be profitable, it means that a fast fashion initiative attend the needs of deployment of some strategies
in the corporate level. In fact, a fast fashion initiative require market responsiveness and speed through
quick incorporation of consumer preferences into the design cycle and product development, which
increases the prot margins for retailers (Christopher, Lowson, and Peck 2004). Since fast fashion is an
enabler of profit, the corporate level of a retailer should consider its implementation, which brings the
need to adapt and make changes in the supply chain, where retailers might consider one of the models
that the Journal suggest: fully vertically integrated, house branded or fully outsourced.

2. Sourcing vs. Supply chain management

The model that the Journal explores could be taken as part of a supply chain management strategy,
rather than a sourcing strategy as the Journal suggest. The model explores decisions that the corporate
level of a retailer should consider when developing the strategies for its supply chain, such as make or
buy, outsourcing, locations, level of involvement, vertically integration, etc.
For example, the Journal wrongly supports the following statement: The last factor that influences
sourcing decisions is how much involvement in the supply chain a retailer wants to pursue. Some
retailers are interested in involving only themselves with parts of the supply chain. For example, Wal-
Mart has been known to handle logistics better than most outsourcing options. Firms that can execute
all parts of the supply chain have large control in sourcing

Note that the above statement mixes the concepts of sourcing decisions with supply chain coordination.
It is wrong to say that firms that can execute all parts of the supply chain have large control in sourcing,
instead of that, the right approach could be: firms that can execute all parts of the supply chain have
large control of its supply chain.


Source: PwCs PRTM Management Consultants.


The above diagram shows the complete cycle of a supply chain and then we can identify very clearly that
sourcing is part of the whole supply chain, therefore, sourcing strategies complement the whole supply
chain strategy of a company.

Now, taken in consideration the Title of the Journal which talks about Global Sourcing, we must to
address the fact that this is a totally different topic because the theory suggest if a retailer want to
adopt a global sourcing strategy, it need a completely different supply chain that support that strategy.
Supply chain management is often described as a holistic approach for planning and control of raw-
materials and information flows to suppliers and customers, (Minner, 2003). When we talk about a
global sourcing approach, the supply chain management is not just for a domestic market, but an
international wide phenomenon, which deal with the challenges of globalization on managers who
designs the supply chains for new and existing products (Minner, 2003)



3. Scope of global sourcing
Due to globalization, retailers have to shift their sourcing strategies. Customers all over the world
demand more and expect that companies fulfill their demands quickly. Retailers have to implement
strategies that support flexibility and quick response to customers. The Journal just considers products
to be sold in the scope the global sourcing activities and this might be not so precise. Instead of that, the
overall scope of strategic sourcing is to achieve large and sustainable cost reductions, long-term supply
stability and minimization of supply risk. The strategies to achieve such goals can be as wide as
rationalizing supplier base, leveraging spending across departments, business units and geographical
regions, reconfiguring supply specifications, and / or developing strategic partnerships / alliances with
selected suppliers. (Deloitte, 2014)


Conclusion
A fast fashion initiative is part of a commercial and financial strategy that the corporate level of a
retailer might want to implement. For doing this, the corporate level of a retailer has to integrate all the
needs that the fast fashion system requires to be successful into its supply chain. These changes require
the commitment of the corporate level and the availability of resources to be implemented. For example,
a fast fashion initiative usually require that the company implement a global sourcing strategy and this
requires huge amount of financial resources and the deployment of a skillful team that usually is not so
easy to find.








References
Barbara Mihm, 2010. Fast Fashion in a Flat World: Global Sourcing Strategies. University of Wisconsin-
Stevens Point.
Capell, K. (2008). Zara thrives by breaking all the rules.
Christopher, M., R. Lowson, and H. Peck. 2004. Creating agile supply chains in the fashion industry.
Fast fashion and supply chain management, 2005. Retrieved from www.just-style.com
Global sourcing: insights from the global clothing industrythe case of Zara, a fast fashion retailer.
Nebahat Tokatli, 2007.
Levy, M & Weitz, B. (2009). Retailing Management. McGraw-Hill Irwin.
Lowson, R.H. (2001), Retail sourcing strategies: are they costeffective?