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Textile and Apparel Supply Chain Management in Hon
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Apparel supply
Textile and apparel supply chain chain
management in Hong Kong management
Jimmy K.C. Lam
Institute of Textiles and Clothing, the Hong Kong Polytechnic University, 265
Hunghom, Hong Kong, and
R. Postle Received October 2004
Revised March 2006
Department of Textile, The University of New South Wales, Sydney, Australia Accepted March 2006
Abstract
Purpose – This paper aims to review the concept of supply chain management. The typical problems
facing with textile and apparel supply chain are short product cycle for fashion articles, long
production lead-time and forecasting errors for fashion items. The Hong Kong textile and apparel
supply chain faces additional problems of distance from customers in the US and European markets,
long production lead-times and minimum batch sizes for production, and, recently, elimination of
quota restriction in the US market, all of which force them to improve efficiency and enhance
competitiveness through supply chain management. Seeks also to provide a selective bibliography for
industrial practitioners with sources which can help them develop their supply chain strategies for the
fashion market in Hong Kong.
Design/methodology/approach – A range of recent published (1993-2005) works, which aim to
provide practical advice are critiqued to aid the individual practitioner to manage its supply chain
strategies in Hong Kong. These sources are sorted into sections: supply chain management in
Hong Kong, textile and apparel supply chain management in Hong Kong, and problems faced by small
and medium-sized enterprises for textile and apparel supply chain.
Findings – The differentiation of product demands into functional and innovative products helps the
supply chain company to employ different supply chain strategies for different products, namely
responsive supply chain strategy for innovative products and efficiency supply chain strategy for
functional products. These two supply chain strategies are focused on the downstream supply chain
aiming at shortening the time to research the market and also to reduce the stock levels in the retailing
industry.
Research limitations/implications – This is not an exhaustive list and cases are mainly from the
Hong Kong textile and apparel industry, which perhaps limits its usefulness elsewhere.
Practical implications – A very useful source of information and impartial advice for industrial
practitioners to develop their own supply chain strategies for the fashion market in Hong Kong.
Especially recently with the elimination of quota to the US market, the management of the supply
chain is critical.
Originality/value – This paper fulfils an identified information/resources need and offers practical
help to industrial practitioners on then supply chain management for the Hong Kong textile and
apparel industry.
Keywords Supply chain management, Textile industry, Hong Kong
Paper type General review
International Journal of Clothing
1. Introduction Science and Technology
Vol. 18 No. 4, 2006
In recent years, “world class” organizations purchase products, move and market goods pp. 265-277
and services on a global basis in order to meet customers’ needs on a timely basis, with q Emerald Group Publishing Limited
0955-6222
relevant and high quality products produced and delivered in a cost effective manner. DOI 10.1108/09556220610668491
IJCST To achieve this goal, the concept of supply chain management (Cox et al., 1995) has
18,4 proven to be of vital importance especially for the Hong Kong textile and garment
industries. Hong Kong has become an important sourcing and control centre for the
global garment industry with production plants in China, Indonesia, Thailand and India
(Hong Kong Government Industry Department, 1995).
Although billions of dollars of apparel business are conducted in Hong Kong,
266 relatively little knowledge about the management of supply chains is reported in
published research. The technologies of electronic data interchange (EDI), flexible
manufacturing, automated warehousing and rapid logistics appear to achieve little
improvement in the supply chain management (Fisher, 1997). New management
concepts such as quick response, efficient consumer response, mass customization,
lean manufacturing again fail to deliver the cost saving and performance
improvements in the supply chain (Fisher, 1997).
Figure 1.
Barriers to the
implementation of SCM in
Hong Kong
Figure 2.
Awareness of SCM in
Hong Kong
3. Textile and apparel supply chain management in Hong Kong Apparel supply
Although the two consultant reports show that Hong Kong industry in general is not
well prepared for the supply chain management, the textile and apparel industry in
chain
Hong Kong, however, is quite different. management
A report on the techno-economic and market research study on Hong Kong’s textile,
clothing and footwear industries (Trade and Industry Department, Hong Kong
Government, 2000) shows that some supply chain management is already being 269
undertaken by large enterprises in Hong Kong in response to demand from their
buyers for supply chain co-ordination. The tactics includes: integration of supply chain
through vendor partnership; streaming of supply chain through elimination of
intermediaries; and focussing on core competency to gain competitive advantage, as
shown in the following three examples.
Functional Innovative
273
Figure 3.
Accurate response to
market signals
Figure 4.
Forecast error and degree
of agreement amongst the
committee
supply chain, most garments produced in Hong Kong are intended for export and large
amounts of the required materials are imported. Managing the international logistics
therefore is crucial for the Hong Kong clothing industry.
Moon (1999) surveyed 105 clothing manufacturing firms in Hong Kong with
25 companies for in-depth interview to understand the supply logistics for Hong Kong
garment manufacturers. Results show that the overall logistics cost for in-coming
fabrics, expressed as a percentage of total fabric cost, ranges from 1.5 to 8 per cent,
with an average value of 3.7 per cent. Transportation consumes over 95 per cent of the
overall logistics cost.
Most surveyed firms, however, consider that the logistics are not important in their
supply chain. This finding is rather contradictory to conventional thinking in the
supply chain. Moon (1999) concluded that the Hong Kong clothing manufacturers like
IJCST to focus on their core business function, for example sourcing, production, marketing,
18,4 which are always regarded as the determinants of the firm’s existence. The clothing
manufacturers therefore spent less effort on supply-side logistics and were not aware
of the importance of developing logistics excellence in honing their competitive edge.
Hong Kong has long been regarded as an important sourcing centre for clothing
production in the Far East for the world market. Leung (1999) therefore, studied the
274 Hong Kong textile and apparel supply chain from the supplier viewpoint. By analysis
of the case study of a skiwear supply chain in Hong Kong (Hammond and Raman,
1995), Leung (1999) found that two reasons to limit the flexibility of the supply chain in
Hong Kong were long production lead-time and large batch requirements for
production, as shown in Table III.
Leung found that the key issues that constrain the flexibility of the supply chain
were:
.
little sharing of information amongst retailers, distributor and suppliers; and
.
fluctuation of fabric demand.
For the suppliers, key constraints for the supply chain flexibility were:
.
batch size of greige goods;
.
quota restriction to US market;
.
lead-times; and
.
insufficient experience in managing demand.
To increase the supply chain flexibility, Leung (1999) concluded that inventory-holding
points should be located for the greige goods in the supply chain. This pre-positioning
of greige fabric has enabled the skiwear company under study in the supply chain to
react more quickly to the market demand for its distributor and trading partners in
Hong Kong. They were able to print/dye the right pattern/colours for their styles,
based on market information.
The problems of information sharing and communication amongst the supply chain
members are reported by Chen (2005) for his study on supply chain management in
fashion industry between UK retailer shops and Chinese clothing manufacturers.
He pointed out that “misunderstanding is a big issue in translating specifications from
English into Chinese” and estimated that the manufacturers in China on average
receive and understand 65.5 per cent of the retailer’s information (Chen, 2005).
276 References
Borneman, J.M. (2005), “Trust: supply chain’s weakest link”, Textile World, Vol. 255 No. 9, p. 9.
Chow, C.K. (2005), “Hong Kong, competitive supplier”, Textile Asia, Vol. 36 No. 9, pp. 11-12.
Chen, Z. (2005), “Fashion clothing in supply chain management: Britain to China”, Textile Asia,
Vol. 36 No. 9, pp. 53-6.
Cox, J.F., Blackstone, J.H. and Spencer, M.S. (Eds) (1995), APICS Dictionary, 8th ed., American
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Ellram, L. and Copper, M. (1993), “Characteristics of supply chain management and the
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Fisher, M. and Raman, A. (1994), “Making supply meet demand: in an uncertain world”, Harvard
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Fisher, M.L. (1997), “What is the right supply chain for your product”, Harvard Business Review,
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Textiles and Clothing Industries, Trade and Industry Department, Hong Kong
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