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Supply network structures in the international clothing industry:

Differences across retailer types

Article  in  International Journal of Operations & Production Management · June 2013

DOI: 10.1108/IJOPM-12-2011-0478

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IJOPM
33,7 Supply network structures in the
international clothing industry:
differences across retailer types
858
Bart L. MacCarthy and P.G.S.A. Jayarathne
Nottingham University Business School, The University of Nottingham,
Received 16 December 2011
Revised 24 July 2012 Nottingham, UK
5 October 2012
Accepted 11 October 2012 Abstract
Purpose – The study seeks to classify retailer-driven clothing supply networks to provide new
insights on their structure and operation and examine whether or not differences are evident in the
types of networks operated by different types of retailer.
Design/methodology/approach – A large-scale empirical investigation is conducted of 73 supply
networks operating with 26 Sri Lankan apparel manufacturers, representing 39 major retailers.
In-depth interviews and survey methods are used, representing qualitative and quantitative
approaches, respectively.
Findings – Six primary types of clothing supply network are identified. A strong association is
shown between retailer type and network type, specifically for networks operated by established
brand retailers and by value players such as supermarket retailers. The typical attributes of the supply
networks of each type of retailer are compared.
Research limitations/implications – Although the empirical study is large, it is limited to supply
networks with prime manufacturing partners located in Sri Lanka. The country is important in global
clothing production, serving many prominent global retailers. Studying and comparing supply
networks anchored in other regions will provide a valuable comparison with the findings here.
Practical implications – The study has implications for clothing retailers in analyzing, managing
and developing their networks. For manufacturers, it provides insights to understand the network
structures operated by different types of retailer for different classes of garment. The study also offers
insights for policy makers in clothing producing regions.
Originality/value – A new empirically based classification is presented for clothing supply
networks. The diversity in network types has not previously been shown. The comparison of networks
of established brand retailers and value players provides empirical evidence of differences not reported
previously. The findings enrich both the theoretical and empirical bases for sector-specific supply
network studies.
Keywords Supply networks, Clothing, Retail, Supply chain management
Paper type Research paper

International Journal of Operations &
Production Management
Vol. 33 No. 7, 2013
pp. 858-886
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/IJOPM-12-2011-0478
1. Introduction
The clothing industry presents significant supply chain challenges due to its
international scope and its dynamic nature (Bruce and Daly, 2004; Christopher et al.,
2004). The abolition of the multi-fiber agreement (MFA) in 2005 removed many of the
barriers to trade in textiles and clothing globally (Martin, 2007). The industry has been
noted as one of the most global and mobile industries in the world (Abernathy et al.,
2006). As well as constituting a major class of retail products, the industry is also
important economically in many regions of the world (Gereffi and Frederick, 2010).
Clothing supply networks are principally “buyer-driven” (Gereffi, 1999; Tyler et al.,
2006). The power of major retailers and brand owners significantly influences their
structure, organization and management. Different types of clothing retailers serve Supply network
different market segments. An important development in recent years has been the structures
emergence of “value players” that challenge traditional established clothing retailers
by selling garments at a comparatively low price (Barnes and Lea-Greenwood, 2006;
Verdict Consultancy Group, 2010). In the UK clothing market for instance, value
players like Matalan and the major grocery/supermarket retailers such as Asda, Tesco,
and Sainsbury have had a substantial impact on the sector in terms of market share 859
(Barnes and Lea-Greenwood, 2006; Verdict Consultancy Group, 2010; Mintel, 2010).
A number of generic supply network classifications have been presented in the
literature. However, they lack significant detail to provide insights on the structure
and management of the different types of supply network that have emerged in
the international clothing industry. Although some specific clothing supply networks
have been described (e.g. Zara – Ferdows et al., 2004; Tokatli, 2007; Lewis et al., 2008;
Eiriz and Areias, 2008), no classification of clothing supply networks has been
presented in the literature to date. In addition, the clothing supply networks that have
emerged for different types of retailer, their structure, organization and the way they
are managed, have not been analyzed and compared in detail.
To address these gaps, this paper uses an extensive empirical study to examine
the types of clothing supply networks that have emerged in contemporary practice.
It seeks to:
. develop an empirically-based classification scheme for contemporary clothing
supply networks to provide new insights on their structure and operation; and
.
examine whether or not differences are evident in the types of supply network
operated by different types of retailer, specifically between established brand
retailers and value players.

The desirability of investigating sector-specific networks has been highlighted

frequently in the literature (New and Mitropoulos, 1995; Meixell and Gargeya, 2005;
Zhang and Gregory, 2011) and was noted by Giunipero et al. (2008) in their
identification of research challenges in supply chain management (SCM).
The paper first reviews relevant literature on supply networks, highlighting
research gaps and justifying the objectives of the study in Section 2. The methodology
adopted is then described in Section 3. Using data collected in the field, a new
classification of clothing supply networks is developed. A correlation analysis is
conducted to examine the degree of association between supply network types and
retailer types. The results and findings are presented in detail in Section 4 and
discussed in the context of the research objectives set in Section 5. Typical supply
networks of established brand retailers and value brand retailers are compared and
discussed in Section 6. The contributions, managerial implications and limitations of
the study, along with potential avenues for further work are discussed in Section 7.

2. Theoretical background and literature review

Halldorsson et al. (2007) identify useful theoretical perspectives to explain structure
and management issues in supply networks, including principal-agent theory (PAT),
transaction cost analysis (TCA), network perspective theory (NT), and the resource
based view (RBV). Given the focus and scope of the study presented in this paper –
supply network structures – the dominant perspective considered is network theory,
IJOPM although the discussion of findings is complemented by insights from other
33,7 perspectives on the resources, activities and capabilities of network members. Network
theory contributes to understanding the dynamics of inter-organizational relations by
emphasizing the importance of the relationships between the network entities, the
build-up of trust through positive long-term cooperative relations and the mutual
adoption of routines and systems through exchange processes (Halldorsson et al.,
860 2007). It has been applied in supply chain research to map and classify activities,
actors, resources and structures in supply networks.
Here, we first highlight the limitations of existing generic classifications of supply
networks in explaining differences in the types of network that occur in the
contemporary international clothing industry. We then identify the objectives of this
study and discuss major themes from the SCM literature that need to be considered to
understand, analyze and compare clothing industry supply networks.
Two dominant perspectives are evident in supply network classification schemes
presented in the literature – “structure and configuration”, and “strategy, governance
and power”. Typical of the former are the schemes discussed by Hinterhuber and
Levin (1994), Cravens et al. (1996), Nassimbeni (1998) and Ernst and Kamrad (2000).
Classifications adopting “strategy, governance or power” perspectives focus
principally on how network activities are coordinated and controlled by entities in
the network. Typical of this approach are the schemes by Harland et al. (2001),
Cox (2004), Lee (2002), Verwaal and Hesselmans (2004) and Provan and Kenis (2008).
Shi and Gregory (1998), Shi et al. (1997) and Shi (2003) discuss the strategic capabilities
of the international manufacturing configurations, capturing elements of both
dominant perspectives.
Although some of the existing classifications provide some insights on
retailer-driven clothing supply networks, they suffer from a number of limitations
which limit their usefulness in studying the contemporary international clothing
industry:
.
Most are very general and fail to discriminate clearly or to provide significant
explanatory power on network structure, relationships, or network management
in the context considered here. For instance, all of the different networks studied
in this work fit into one category in many schemes, e.g. “flexible network” (Ernst
and Kamrad, 2000; Cravens et al., 1996), “supply network” (Nassimbeni, 1998),
“responsive network” (Lee, 2002), “dynamic/high degree of focal firm influence”
(Harland et al., 2001).
.
Most of the above classification schemes have been developed solely on one
(Cox et al., 2001) or two dimensions (Ernst and Kamrad, 2000; Cravens et al.,
1996; Lee, 2002) – a limitation noted by some scholars that restricts their value in
specific contexts (Cravens et al., 1996; Ernst and Kamrad, 2000).
.
None of the classifications are sector-specific, despite the desirability of
investigating industry-specific networks highlighted in the literature (New and
Mitropoulos, 1995; Meixell and Gargeya, 2005; Giunipero et al., 2008; Zhang
and Gregory, 2011). No classification scheme exists that focuses on supply
networks in the clothing sector, notwithstanding the importance of the sector
globally in terms of economics and employment (Gereffi and Frederick, 2010),
and in providing a major category of retail products.
 .
In comparison to producer-driven supply networks, such as occur in the Supply network
automotive or aerospace sector, retail supply networks have had comparatively structures
much less research. Randall et al. (2011) note that SCM research has tended to
overlook the retail sector and thus there is a need for detailed investigation.

This paper seeks to address these significant gaps in the context of clothing supply
networks. Two objectives are set for the study. The first objective is to develop an 861
empirically-based classification scheme for contemporary clothing supply networks to
provide new insights on their structure and operation, using relevant constructs from
the SCM literature. A key characteristic of clothing supply networks is that they are
buyer-driven (Gereffi, 1999; Tyler et al., 2006). The retailer or brand owner, as the
buying entity, is powerful and influences the structure, relationships and operational
practices across the network. A typical scenario is that a retailer based in a developed
Western economy works with a specific prime manufacturer based in a clothing
production region in a less developed economy to supply a particular type of garment.
This motivates the second objective of the study – to examine the characteristics of
the supply networks operated by different clothing retailers in order to answer the
question whether or not different types of retailer utilize different types of supply
network and whether they manage their networks in the same or in different ways.
Different perspectives have been taken in the literature to categorize clothing
retailers, including marketing, brand, volume and price perspectives (Barnes and
Lea-Greenwood, 2006; Sen, 2008; Brun and Castelli, 2008; Verdict Consultancy Group,
2010; Gereffi and Frederick, 2010). For this study we adopt an approach in line with
Barnes and Lea-Greenwood (2006). Each retailer has been classified as either an
“established brand” (EB) or a “value player” (VP). Value players are typically
associated with major supermarket chains or other volume retailers that sell garments
at a comparatively low price. The emergence of value players in many markets has
been significant in the last decade in terms of their effects on market share (Verdict
Consultancy Group, 2010; Mintel, 2010).
The operational and sourcing strategies of some clothing retailers have been
described in the literature. Benetton has utilized both franchising and sub-contracting
when maintaining relationships with downstream and upstream network partners,
respectively, (Camuffo et al., 2001). Zara is well known as the only strongly vertically
integrated clothing retailer that maintains significant upstream clothing production, as
well as textile production in its parent company, Inditex (Tokatli, 2007). Using publicly
available sources, Lewis et al. (2008) highlights differences in Zara’s supply network
from that of the international trading company, Li and Fung, with respect to global
network structure and global resource leverage. Given the diversity evident in clothing
retailers, we start with the proposition that different types of retailer will utilize
different supply network configurations and we examine the evidence to support or
refute this proposition, specifically by comparing the networks of EB with those of VP.
As with any sector-specific supply network study, some aspects are common across
all clothing supply networks with regard to the typical value-adding activities and the
principal entities involved. The entities in clothing supply networks include retailers,
distributors, logistics and warehousing companies, designers, merchandisers, yarn
and fabric producers, trims producers, garment manufacturers, and embellishment
service providers (e.g. embroidery, decorative attachments, printing, washing).
IJOPM In general, the textile producers supply the clothing plants, which in turn feed into a
33,7 retailer’s distribution and logistics systems to enable garments produced in a global
supply network to meet anticipated demand in a specific retail market (MacCarthy and
Jayarathne, 2010). To meet the two objectives of this study, a detailed analysis of the
SCM literature has been necessary to identify the most appropriate dimensions on
which to analyze, classify and compare contemporary retailer-driven clothing supply
862 networks. Four important dimensions have been identified.
Relationships among the entities in a supply network, and particularly between a
focal or prime organization and other entities, have frequently been noted as an
important influence on network structures and their management (Ghoshal and
Bartlett, 1990; Snow et al., 1992; Ghoshal and Nohria, 1993; De Toni and Nassimbeni,
1995; Cravens et al., 1996; Rugman and Verbeke, 2003). Cheng and Kam (2008) note that
the diversity of relationships within the network, particularly between the principal
and agents, influence network structure to create different types of network structures.
As retailers use different mechanisms to work with prime manufacturing partners
in clothing supply networks, this provides the first key perspective to investigate
for this study.
The level of vertical integration is one of the most widely discussed issues in
highlighting differences in supply networks (Ghoshal and Nohria, 1993; Hinterhuber
and Levin, 1994; Grandori and Soda, 1995; Robertson and Langlois, 1995; Cravens et al.,
1996; Nassimbeni, 1998; Achrol and Kotler, 1999; Ernst and Kamrad, 2000; Verwaal
and Hesselmans, 2004; Harland et al., 2004). Rudberg and Olhager (2003) note that
vertical integration has the greatest impact on the design of manufacturing networks.
Shi (2003) utilizes “vertical position and integration” as one of the factors to identify
different configurations for international manufacturing. As clothing manufacturers
differ in the extent of the upstream capacity they own or control and differ in their level
of integration with retailers, this provides the second key perspective for this study.
The nature of the product is highlighted in the literature as an influential factor in
determining the type of supply network. Several authors have explored the implication
of the nature of the product on the structure of supply networks, either explicitly or
implicitly (De Toni and Nassimbeni, 1995; Fisher, 1997; Harland et al., 2004;
Lamming et al., 2000; Lee, 2002; Cox et al., 2001). Lamming et al. (2000) conclude that
the complexity of the product supplied is significant as supply networks for complex
products are more challenging to manage because of the large number of components
and actors involved. Although the major value-adding processing stages are common
in clothing production, the complexity of a garment and the degree and nature of skills
needed to produce it can vary significantly. Product complexity therefore provides the
third key perspective used in this study.
Functional authority – which entities exercise controlling authority over which
activities – is also argued to influence the structure and organization of supply
networks (Harland et al., 2004; Verwaal and Hesselmans, 2004). De Toni and
Nassimbeni (1995) note that the nature of the operational interdependencies between
the units – design, production, and flow of materials – affects the configuration of the
supply chain and its constituent tiers in distinct ways. Shi et al. (1997) note that
coordination in terms of product, manufacturing process, and managerial mechanisms
are important aspects for network configurations for multinational companies. Choi
and Hong (2002) consider the formalization, centralization, and complexity of specific
supply networks in the auto-industry, with centralization being the degree to which Supply network
authority in decision making is concentrated or dispersed. Functional authority for structures
key activities such as design provides the fourth key perspective used for the analysis
in this study.
The four dimensions discussed above – the relationship between the retailer and
prime manufacturer, the level of vertical integration, product complexity and functional
authority – are used as the principal dimensions for the analysis here. We note that, 863
although geographic dispersion may appear to be an important dimension, it has not
been included here as all the clothing supply networks considered are strongly similar in
pattern, as described in the methodology section below. We discuss this issue as a
potential avenue for further research in Section 7.

3. Methodology
Research setting
The study is based on an extensive investigation of clothing supply networks where
the prime manufacturing partner is located in Sri Lanka. In total, 26 clothing
manufacturers serving 39 international retailers, comprising 73 supply networks are
studied (explained below). Given the objectives and the current state of knowledge on
clothing supply networks, the study qualifies principally as theory building research
(Wacker, 2008; Stock, 2009). Both qualitative and quantitative research methods have
been used. Combined methods are particularly suited to the study of phenomena in
SCM (Stock et al., 2000; Voss et al., 2002).
The clothing industry is the largest industrial sector in Sri Lanka, accounting for
approximately 60 percent of the total industrial exports and is the largest foreign
income generator for the country (Asian Textile Business, 2005; CBARSL, 2010).
The country maintains a strong reputation as a preferred supplier for major retailers
and brand owners across the EU and in North America (Kelegama, 2005; Wijayasiri
and Dissanayaka, 2008). It is one of the top 15 clothing supplying countries that supply
87 percent of the world’s clothing market. The annual value of its clothing output has
been estimated at US$3.5 billion annually (Gereffi and Frederick, 2010). As Sri Lanka
manufactures for many of the world’s leading retailers and produces a wide range of
garment types – from very basic to highly complex styles – it exhibits diversity in
network structures, operational approaches, and relationships.
The sample of manufacturers studied control the majority (over 60 percent) of
Sri Lankan apparel exports, reflecting the comprehensiveness of the study. The sample
has included all the major manufacturers in Sri Lanka, a number of whom have
extensive production in other countries in the Asian region and source raw materials
from textile suppliers both within the region and internationally.

Data collection
The unit of analysis defined for the study is a clothing supply network that includes
the retailer or brand owner, agents working on behalf of retailers, a prime
manufacturer and its manufacturing base, the textile and accessory suppliers that feed
into the network, and the logistics partners that handle downstream warehousing and
shipping. Supply networks have been identified through prime manufacturers.
As noted by Humphrey and Schmitz (2001), selecting retailers as the proxy for supply
network studies is difficult and often infeasible. They argue that prime manufacturers
IJOPM should be selected as they can provide key insights on supply networks, both upstream
33,7 and downstream in the clothing industry. However, in addition, the retailers’
perspectives have also been considered in this study through data collection and
interviews with their regional buying offices or their agents.
Table I summarizes the 73 supply networks studied and their links with the
26 prime manufacturers and 39 retailers based principally in the US and the EU
864 clothing markets. The identity of the prime manufacturers, the retailers and their
networks are anonymised for this research. The codes assigned for each supply
network in the third column identify a manufacturer (the first two characters), a
specific network (the next three or four characters) and a retailer (the characters
following the dash). A manufacturer may operate in supply networks serving different
retailers and/or may operate in different supply networks for the same retailer.

Number of supply
Prime manufacturer networks Names of retailers and respective supply networks

Company 1 4 MINW1 – R37, R18; MINW2 – R2; MINW3 – R27;

MINW4 – R22
Company 2 6 MANW1 – R33; MANW2A – R31; MANW2B – R31;
MANW2C – R31MANW3 – R13; MANW4 – R36
Company 3 2 BCNW1 – R27; BCNW2 – R18
Company 4 3 BANW1 – R37; BANW2 – R20; BANW3 – R21
Company 5 3 BINW1 – R37; BINW2 – R24; BINW3 – R22
Company 6 1 ONW1 – R19, R22, R36
Company 7 6 HNW1 – R27; HNW2 – R28; HNW3 – R16;
HNW4 – R26; HNW5 – R25; HNW6 – R4, R39
Company 8 1 NNW1 – R30
Company 9 5 UANW1 – R30; UANW2 – R35; UANW3 – R8;
UANW4 – R34; UANW5 – R10
Company 10 3 VTNW1 – R27; VTNW2 – R19; VTNW3 – R10
Company 11 2 ENW1 – R4; ENW2 – R15
Company 12 3 CNW1 – R27; CNW2 – R6; CNW3 – R7, R28
Company 13 1 CCLNW1 – R27, R14
Company 14 5 HCNW1 – R35; HCNW2 – R30; HCNW3 – R27;
HCNW4 – R29; HCNW5 – R23
Company 15 1 CMNW1 – R27
Company 16 1 SSNW1 – R32
Company 17 3 MENW1 – R30; MENW2 – R35; MENW3 – R27
Company 18 3 SGNW1 – R30; SGNW2 – R27; SGNW3 – R34
Company 19 4 OGNW1 – R35; OGNW2 – R30; OGNW3 – R4;
OGNW4 – R10
Company 20 2 JGNW1 – R12; JGNW2 – R28
Company 21 4 SNW1 – R8; SNW2 – R11; SNW3 – R14; SNW4 – R30
Company 22 1 KGNW1 – R35
Company 23 2 CKDNW1 – R30; CKDNW2 – R8
Company 24 1 AVNW1 – R7
Table I. Company 25 4 TSNW1 – R27; TSNW2 – R4; TSNW3 – R38;
Summary of the TSNW4 – R5
relationship between Company 26 2 STGNW1 – R38; STGNW2 – R3
manufacturers, supply 26 companies 73 networks 39 retailers
networks and retailers
used in the study Notes: Numbers from R1 to R39 are assigned for names of retailers; codes are given for every network
Table II summarizes the sources of data, data collection stages and the roles of Supply network
interviewees. In-depth interviews have been carried out with all the key supply chain structures
players at both strategic and operational levels to gain detailed information on the
structure, operation and management of the different supply networks. Strategic level
personnel at the retailers’ regional offices or agents representing retailers have been
interviewed to obtain the retailers’ perspectives. The study was conducted over a three
year period and has generated large amounts of data and information in three stages 865
on contemporary clothing supply networks.
Interviews have also been conducted with relevant government and industry bodies
to obtain different perspectives on policies and support for the industry. Use has also
been made of relevant secondary data sources, observations made by the researcher as
well as interviews, reports and publications from industry and government bodies to
complement the primary data sets.
A validation process has been carried out with key personnel in the different
networks to critique and inform the analysis. In addition, it has been presented at an
industrial event organized for senior executives in the clothing industry in Sri Lanka,
which is an open forum. Relevant comments were considered in adding to, and refining
the classification.

Data analysis approaches

A classification scheme can be derived using either clustering or observations and
judgments (Bozarth and McDermott, 1998). As Bozarth and McDermott (1998) note, the
descriptive power of a classification scheme is more important than the methods used
to derive it. This study has utilized a logically-developed qualitative observational
approach to derive a classification scheme with sufficient descriptive power to address

Data collection stagesa

Data sources Phase 1 Phase 2 Phase 3 Roles and characteristics of interviewees

In-depth interviews Five Strategic level personnel (e.g. director,

(government interviews assistant director) in five government
authority) authorities
In-depth interviews 26 26 Ten Strategic level personnel (e.g. CEO,
(prime interviews interviews interviews director, general manager) in 26 clothing
manufacturers) manufacturers
78 Operational level personnel (e.g. account
interviews managers, senior merchandisers,
merchandisers) in 26 clothing
manufacturers
In-depth interviews Five Eight Five Strategic level personnel (e.g. country
(retailers, retail interviews interviews interviews manager) in selected retail agents or
agents) retailer’s regional offices
Observations U U U Direct observation of the operational
policies, procedures and practices of the
selected manufacturers and retail agents
Documents U U U Supporting data from selected
manufacturers and retail agents
Table II.
Notes: aData collection stages: 1 ( July-August 2009); 2 (October 2010-February 2011); Summary of the
3 (November 2011) data sources
IJOPM the essential elements of a network configuration – network structure, operations
33,7 processes, governance system, support infrastructure, and external relationships
(Srai and Gregory, 2008).
Critical qualitative analysis has been carried out on all data sources with several
iterations to identify, compare and classify the networks operated by prime
manufacturers for different retailers. In addition to the qualitative analysis, the
866 data has been analyzed using statistical methods to examine differences across types
of retailers with respect to their supply network structures. Correlation analysis
has been carried out using both parametric and non-parametric methods.
Correlation analysis of this type has been carried out in similar studies in the
literature (Fiorito et al., 1998).

Network configuration mapping and visualization

Many different supply network mapping approaches have been described in the
literature, capturing different network perspectives and applied in different contexts,
e.g. relationships and complexity (Lambert et al., 1998; Catalan and Kotzab, 2003); power
and governance (Sturgeon et al., 2005; Gereffi et al., 2005); configuration (Srai and
Gregory, 2008); industry specific (Lamprinopoulou and Tregear, 2011); company
specific (Choi and Hong, 2002). The configuration mapping approaches used here follow
the guidelines given by Gardner and Cooper (2003) and Farris (2010) for effective supply
network mapping approaches. The conventions used are described in the Appendix.

4. Classification of clothing supply networks

The process of classifying the observed networks has been informed by the major
dimensions identified in the literature review, by the patterns observed in analyzing
and comparing different networks, and by iteration and critique. Any classification
scheme must balance the desire to discriminate clearly between classes against the
over complexity that may result from a profusion of classes. The principal dimensions
used for the full classification of networks are:
(1) The nature of the relationship between the prime retailer and the prime
manufacturer. This dimension considers the nature of the primary relationship
in the network. Five types are considered:
. Direct. The retailer develops and maintains the relationship with the prime
manufacturer directly.
.
Retailer’s regional office. The retailer develops and maintains the relationship
with the prime manufacturer through the retailer’s regional office.
.
Manufacturer’s regional office. The retailer develops and maintains the
relationship with the prime manufacturer through the manufacturer’s
regional office (in the country base of the retailer).
.
Independent retail agent. The retailer develops and maintains the relationship
with the prime manufacturer through an independent company that
represents the retailer in interactions with the prime manufacturer.
.
Trading company. The retailer develops and maintains the relationship with
the prime manufacturer through an international trading company, which
serves for multiple retailers (e.g. such as Li and Fung).
 (2) The level of vertical integration in the network. This dimension considers the Supply network
level of integration evident across the network. Four levels of integration are structures
considered – backward integration (upstream) between the prime manufacturer
and its textile and accessories supply base, forward integration (downstream)
between the prime manufacturer and the retailer, full integration (both
upstream and downstream), or no integration.
(3) The nature of the product[1]. This dimension considers the nature of the 867
product in terms of the operational competencies required in the production
processes and/or specialist materials needed. Two broad categories are
considered:
.
products that need special production competencies, typically with
complicated designs, and/or that need specialist materials (e.g. intimate
garments such as lingerie and foundation wear, casual wear with complex
embellishments, sportswear, leisure wear, and evening wear); and
.
products that do not need special production competencies, typically have
simple designs that require commonly available materials only (e.g. casual
wear with simple designs, sleepwear, school wear, or essentials such as
t-shirts).
(4) Functional authority. This dimension considers the entity (the retailer, retailer
agent, or prime manufacturer) that exercises decision authority for key
activities in the clothing supply process. Specifically, authority for the following
key activities are examined – design, sample development, fabric sourcing, and
final quality assurance – are considered.

From detailed scrutiny and analysis of the data on networks, it was evident that the
first three dimensions generated six main classes of clothing supply networks. For
some of the network classes, sub-classes have been identified, mostly determined by
the fourth dimension. In total 15 distinct networks have been identified when
sub-classes are included. The six main classes are described and illustrated below,
highlighting their principal distinguishing features. The statistical analysis in the
following sections uses these six main classes. Aspects of the sub-classes are noted,
particularly for the most commonly observed networks but only briefly.

FULLY INTEGRATED (FI)

In this type of network, shown in Figure 1, the retailer, the prime manufacturer and
fabric suppliers are all strongly integrated in terms of strategic alliances and joint
ventures – the dark dotted line shows the integrated entities of the network. The
retailer deals with the prime manufacturer through the prime manufacturer’s regional
office located in the country where retailer operates (in the examples here, these are in
the UK). Garment design and sample development activities are carried out under the
control of the retailer in a collaborative effort with the regional office of the prime
manufacturer and, when required, the prime manufacturer in Sri Lanka (SL). Fabrics
and accessories are mostly supplied by suppliers who operate under the umbrella of
the prime manufacturer. Fabric sourcing decisions are made by the retailer in
collaboration with the prime manufacturer’s regional office in UK and, where
necessary, the prime manufacturer in SL. All the main production activities are carried
IJOPM
33,7

868

Figure 1.
FULLY INTEGRATED
supply network

out exclusively by the manufacturer within its production plants in SL, as well as most
of the embellishment and final quality assurance activities. However, given the types of
garments produced, some external embellishment service providers may temporarily
operate in the network depending on current designs. External quality auditors may be
appointed on the request of retailer to assess garment quality or to audit the
manufacturing quality system. This may occur at any time.
This type of network is used by some retailers to source garments that need highly
specialized operational competencies and strict control on materials procurement and
garment specification (special fabrics and accessories), particularly for intimate
apparel and lingerie. The retailer values strong integration and benefits from quality
assurance throughout the process and guaranteed supply. However, it is not a common
network type with only a small number of examples identified in the study. This kind
of network requires high investment and long-term partnerships. No sub-types have
been identified.

UPSTREAM (US)
Figure 2 shows an example of this network configuration with the dark dotted line
again showing the integrated entities. This network shares similarities with the FI
network above but downstream integration is less prominent. The retailer and prime
manufacturer operate independently, but the manufacturer has strong integration with
fabric suppliers, either through ownership, strategic alliances or joint ventures. The
retailer sources from the prime manufacturer through the retailer’s regional office in
SL. As with the FI network, this supply network is utilized by retailers to source
garments that need high quality materials and special operational competencies,
mainly, though not exclusively, for lingerie and intimate apparel.
The retailer designs the garments and sends them to the prime manufacturer
through its own regional SL office. The prime manufacturer develops and produces
sample garments accordingly. Fabrics and accessories are mostly supplied by
suppliers who operate within the prime manufacturer’s network, reflecting its
upstream integration. In addition, some independent raw material suppliers may also
supply for production depending on volume or specialist needs in some seasons for
 Supply network
structures

869

Figure 2.
UPSTREAM supply
network

some classes of garments, but strictly with the approval of (or selection by) the retailer
through their regional office. All the main production operations are carried out
exclusively by the manufacturer within its production plants, as well as most of the
embellishment activities, although external embellishment service providers may
temporarily operate in the network, depending on current designs. Quality assurance
activities are carried out in plants by the prime manufacturer but the retailer’s regional
office is also involved in final quality assurance activities. In addition, external quality
auditors appointed by the retailer’s regional office may carry out audits on quality, or
on the quality system, at any time.
Retailers using this type of network typically value garment uniqueness emanating
from unique textile fabrics, rather than garment design uniqueness (see the DS
network below) and hence the prime manufacturers’ unique competencies in textile
production or sourcing through upstream integration is a top priority. Although
retailers do not formally integrate with prime manufacturers, and maintain full
ownership of the design process, they tend to repeatedly source from the same
manufacturers who possess the necessary textile competencies, indicating informal
commitments. Such networks demand a high level of investment on the part of the
prime manufacturer and are comparatively less common than DS networks discussed
below. Some prime manufacturers with unique textile production competencies also do
not favour greater integration with specific retailers, as it may hinder their bargaining
power. Two sub-types of the US network have been identified, distinguished by fabric
sourcing authority.

DOWNSTREAM (DS)
An example of this commonly observed network type is shown in Figure 3. The prime
manufacturer and fabric suppliers operate independently. However, the retailer
maintains strong integration with the prime manufacturer, typically through long-term
partnerships, strategic alliances and joint ventures shown by the dark dotted line in
Figure 3. Also included in this category are networks where some (or all) of the
garment production facilities are fully owned by the retailer, shown by the dark solid
IJOPM
33,7

870

Figure 3.
DOWNSTREAM
supply network

line in Figure 3. Typically this type of network is used by retailers to source

complex fashion garments that need special garment production competencies with
significant work content, such as complex casual wear, leisure wear and some
sportswear.
Garment design activities are carried out by the retailer in collaboration with its
own regional office in SL. In most cases, the retailer develops and maintains
relationship with prime manufacturers through its regional office in SL. Garment
designs are first sent to the retailer’s regional office and a set of samples is developed
as a collaborative effort between the regional office, the retailer’s fully-owned
manufacturing firm (in some cases) and/or a prime manufacturing partner, depending
on volume. The main manufacturing activities are carried out by these two sets of
manufacturers within their production plants, including most of the embellishment
activities. However, as this network supplies complex fashion garments, external
embellishment service providers often operate in such networks, depending on current
designs. Fabric sourcing decisions are made by the retailer in collaboration with its
regional office in SL. Fabrics and accessories are supplied by independent suppliers. In
addition to the retailer’s fully-owned prime manufacturer, the retailer’s regional office
in SL is also involved in final quality assurance activities for any other prime
manufacturers involved. This structure also utilizes the services of external quality
auditors, who carry out audits on quality, or on the quality system, on the request of
the retailer.
Retailers utilizing this type of network serve the fashion market segment, where
garment design is the top priority. They maintain uniqueness through garment design
and embellishment attributes. Given the nature of the garments (casual wear,
sportswear, or leisure wear) unique fabrics types are not typically required and the
more commonly available seasonal fabrics are typically used. Thus, they can source
fabrics from independent suppliers enjoying the cost benefits through negotiation.
Competencies in converting common fabrics into fashion garments with exceptional
designs, high quality and high variety are evident in this type of network.
Maintaining close integration with prime garment manufacturers is more important Supply network
than with fabric suppliers as production competency is the essential input. structures
Six sub-types are evident in DS networks, emanating mainly from diversity in
functional authority with regard to design, sample development, sourcing and final
quality assurance activities. However, some differences are evident also in the nature of
the “retailer-manufacturer” relationship. A full description of sub-types is not given
here for brevity but we note that for some sub-types the retailer works through the 871
regional offices of prime manufacturer located in the country where retailer operates,
which is different from the generic description given above.

AGENTS (AG)
An example of this very common network type is shown in Figure 4. All the main
entities – the retailer, the prime manufacturer and fabric suppliers – operate
independently but collaborate temporarily. The retailer maintains the relationship with
the prime manufacturer(s) through an agent, an independent company located in SL
that works on behalf of the retailer. This type of network is typically used to source
garments such as simple casual wear, t-shirts and essentials, sleepwear, and school
wear, that need neither special operational competencies nor special materials.
The retailer may design the garment or may present only a garment concept to a
prime manufacturer through its agent. It may also consider and accept garments
designed and presented by the manufacturer, with or without changes. Sample
development is done by the prime manufacturer. Fabric sourcing decisions are made
by the retailer, its agent and the prime manufacturers in order to source fabrics from
independent suppliers with a focus on cost. All the main production operations, as well
as most of the embellishment activities, are carried out by the prime manufacturer
within its production plants. The services of external embellishment providers may be
utilized temporarily in order to meet special requirements, although less commonly
than in integrated networks. Sub-contractors may also be used for garment production
to cope with peak demand. The final quality audit is the responsibility of the prime
manufacturer, though the retailer’s agent may be involved in certain circumstances.
Retailers often maintain this type of network when sourcing simple garments. The
priority is to source less complex garments in relatively high volume at low cost,
utilizing commonly available fabrics. Retailers do not need to establish and maintain

Figure 4.
AGENTS supply network
IJOPM an integrated network. Competition amongst prime manufacturers provides
33,7 bargaining power for the retailers to minimize its costs. In many cases a number of
independently operating prime manufacturers, coordinated by the retailer’s agent, may
be necessary in order to supply high volume orders. Four sub-types are evident,
distinguished principally by the authority to carry out the main operational functions –
design, sample development, fabric sourcing and final quality audit. These are not
872 detailed here for brevity.

TRADING COs (TC)

Some networks in the study were identified that used international trading companies
as intermediaries between the retailer and manufacturers. Trading companies can be
clearly distinguished from agents. An agent typically represents one retailer, whereas a
trading company typically has international standing and may represent and facilitate
several retailers. Trading companies often provide more services than a retail agent
(e.g. credit facilities for manufacturers). In this type of network, shown in Figure 5, the
retailer, the prime manufacturer and fabric suppliers operate independently.
This type of network is typically used by retailers to source garments that do not
need special operational competency such as simple casual wear. The retailer mostly
designs the garments and asks the trading companies to source them through their
supply base. However, in some cases, retailers may accept a design presented by a
trading company. Owing to the competency and the bargaining power of the trading
company the retailer uses it to make fabric sourcing decisions. An office of the trading
company located in the country where production is being carried out, operates as
the coordinator as well as the quality auditor of the network, carrying out all final
quality assurance activities. All the main production operations are carried out by the
manufacturers within their production plants, as well as most of the embellishment
activities. Such networks may produce a high variety of garments and the services of
the external embellishment service providers may be utilized temporarily.
Sub-contractors may also operate temporarily in the network in order to fulfil the
peak demand, but strictly with the approval of the trading company. No sub-types
were evident in the networks identified.

Figure 5.
TRADING COs
supply network
TEMPNET (TN) Supply network
In this network, shown in Figure 6, the retailer, prime manufacturer and fabric structures
suppliers operate independently. The retailer maintains a direct relationship with the
prime manufacturer. This type of supply network is used mainly by retailers to source
garments that do not need special operational competency such as simple casual wear
and essentials. This type of network often operates when a relatively small retailer
places an initial order with a new manufacturer. 873
The retailer designs the garments and sends them to the prime manufacturer
directly. The prime manufacturer develops and produces sample garments
accordingly. All the main production operations are carried out by the manufacturer
within its production plants, as well as most of the embellishment activities, and
quality assurance activities. External embellishment service providers may temporarily
operate in the network. Fabric sourcing decisions are taken by the retailer and fabrics
are always supplied by independent suppliers to the prime manufacturer. As its name
implies, this network tends to have a relatively short lifespan. An increase in the
volume of orders placed with such a manufacturer or to such country may create the
necessity for the retailer to utilize the services of an independent agent. No sub-types
were evident.
The above classification and descriptions provide strong empirical evidence to
show the diversity of clothing supply networks that are used by retailers. As shown in
Table III, among these six main networks, the AG network is the most commonly
observed type, followed by DS, US, TN, TC, and FI. We next consider the second
objective of the study – whether or not there is an association between the types of
networks operated and the two principal types of retailer identified.

5. Supply networks of different types of clothing retailer

Figure 7 shows the frequency with which each network type is used by each of the two
types of retailer. It is evident visually that the established brand retailers (EB) operate
mostly with the classes of integrated network in the first three categories described in
Section 4 above, whilst the value players (VP) tend to operate with the remaining
categories. Within the data set it is also clear that some retailers operate with more
than one type of network. A correlation analysis has been performed using both

Figure 6.
TEMPNET
supply network
IJOPM
Main network configurations Frequency Empirical examples
33,7
FULLY INTEGRATED 2 CCLNW1; MINW3
UPSTREAM 8 BANW1; BINW1; BCNW1; MINW1; HNW1
BINW2; MINW2; BCNW2
DOWNSTERAM 23 NNW1; SGNW1; OGNW2; MENW1; SNW4;
874 UANW1; HCNW2; CKDNW1
MANW1
MANW2A; MANW2B; MANW2C
ONW1; BINW3; MINW4; MANW4
HCNW4; MENW3
SSNW1; STGNW2; CMNW1; CNW1;TSNW1
AGENTS 31 TSNW3; ENW1; HNW6; UANW2; MENW2;
HCNW1; HNW2; SNW2; OGNW1; JGNW2; OGNW3;
TSNW4; KGNW1
SNW3; SGNW2; HNW3; MANW3; KGNW1;
VTNW1; STGNW1; TSNW2
Table III. AVNW1; CNW3; ENW2; CNW 2; VTNW3; OGNW4;
Summary of the six UANW5; BANW2
main network classes, SGNW3; UANW4
sub-types and empirical TRADING COs 3 SNW1; CKDNW2; UANW3
examples TEMPNET 6 JGNW1; HCNW5; VTNW2; HNW4; HNW5; BANW3

Figure 7.
Supply networks of
different retailer types

parametric (Pearson’s coefficient) and non-parametric (Spearman’s r) methods to

examine quantitatively the degree of association between retailer type and network
type. The results are shown in Table IV.
Correlation coefficients are positive and significant for both the Pearson correlation
coefficient (r) and Spearman’s r at the 99 percent confidence level. At r ¼ 0.779 and
r ¼ 0.782, the strength of the correlation is high. The shared variance is 60.68 and
61.15 percent in the parametric and non-parametric approaches, respectively. Thus,
retailer type helps to explain more than 60 percent of the variance in the types of
supply network.
In summary, the results support the proposition made in the literature review that
different types of retailer utilize different supply network configurations and show that
there is a strong significant association between retailer type and network type.
 Supply network
Correlations
SNW RET structures
SNW Pearson correlation 1 0.779 *
Sig. (two-tailed) 0.000
n 73 73
RET Pearson correlation 0.779 * 1 875
Sig. (two-tailed) 0.000
n 73 73
Spearman’s r
SNW Correlation coefficient 1.000 0.782 *
Sig. (two-tailed) 0.000
n 73 73
RET Correlation coefficient 0.782 * 1.000
Sig. (two-tailed) 0.000 Table IV.
n 73 73 Correlation of network
types and retailer
Note: *Correlation is significant at: 0.01 level (two-tailed) types (Pearson)

These findings have been further verified using Fisher’s exact probability test.
However, the results have been excluded for brevity.

6. Discussion
A large number of authors have highlighted the paucity of studies analyzing real
supply networks in specific sectors (New and Mitropoulos, 1995; Lamming et al., 2000;
Choi and Hong, 2002; Meixell and Gargeya, 2005; Burgess et al., 2006; Storey et al.,
2006; Giunipero et al., 2008; Stock, 2009; Zhang and Gregory, 2011). The relatively
limited amount of research on retail supply networks has also been noted (Randall et al.,
2011). The study here has undertaken a large-scale empirical investigation of
retailer-driven clothing supply networks. The first objective of the study was to
develop a classification scheme for contemporary clothing supply networks to provide
new insights on their structure and operation. The second objective was to examine the
characteristics of the supply networks operated by different clothing retailers in order
to answer the question whether or not different types of retailer utilize different types
of supply network and whether they manage their networks in the same or in different
ways. We discuss our findings with regard to each of these research objectives in the
sub-sections below.

6.1 Classification of clothing supply networks

The classification developed identifies six primary types of clothing supply network –
FI, US, DS, AG, TC, TN. As noted in the review of literature, most previous
classifications place these networks into one general category, providing limited
insights on the diversity evident in their structures, relationships and in their
management. For instance, Harland et al. (2001) present a useful classification that
covers a very broad range of sectors. However, all the networks considered here fit into
the category “dynamic/high degree of focal firm influence”. The identification here of
six primary network types shows the diversity of network possibilities within this
broad category for retailer-driven clothing supply networks. The new classification
IJOPM provides a much richer picture based on empirical evidence to understand differences
33,7 in supply network structures and their management in this sector.
Figure 8 summarizes graphically the relationships between the six primary supply
network classes identified here. The five types of relationship identified between the
retailer and the prime manufacturer are shown on the vertical axis and the four levels
of network integration are shown on the bottom-horizontal axis. The top-horizontal
876 axis differentiates between two major categories of product typically produced, those
that need special production competencies (PDSC), and those that do not need special
competencies (PDNSC). Within some of these primary classes, different sub-classes
have been identified, although for brevity each sub-class is not discussed here.
The six primary network classes provide valuable insights on how the relationship
between retailer and prime manufacturer, the level of integration of the network, and the
nature of the products produced influence network design and management in the sector.
In identifying four levels of vertical integration – upstream, downstream, full
integration, and no integration – and in providing empirical evidence to support when
and why each occurs, the study significantly extends existing generic approaches
(Nassimbeni, 1998; Ernst and Kamrad, 2000; Harland et al., 2004; Wang and Chan, 2010;

Figure 8.
Six main types of
clothing supply networks Notes: PDSC – products need special competency; PDNSC – products do not need special
and their sub-types
competency
Lamprinopoulou and Tregear, 2011) that have typically considered just two Supply network
integration levels – upstream and downstream. The nature of the relationships structures
between entities has been identified in the literature as being important in affecting
supply networks (Ghoshal and Bartlett, 1990; De Toni and Nassimbeni, 1995; Verwaal
and Hesselmans, 2004; Coe and Hess, 2005; Cheng and Kam, 2008). However, the
diversity of relationships that can occur and the precise forms they take have not been
highlighted frequently. This is the first study to classify these in the context of clothing 877
supply networks. We have identified and provided empirical evidence for five different
ways that retailers interact and maintain relationships with prime manufacturers,
highlighting their implications for each type on the network.
The study does not support directly the well known distinction made between
“functional” and “innovative” products in influencing supply network requirements
(Fisher, 1997; Lee, 2002). The study identifies product complexity (De Toni and
Nassimbeni, 1995; Lamming et al., 2000; Harland et al., 2004) in terms of work content
as important in influencing the type of supply network used, specifically whether or
not special operational competencies are required. For example, female lingerie and
foundation wear typically require high specification fabrics, as well as specialist
materials (e.g. lace trimmings) and often also require special operational competencies.
Thus, integrated networks that allow greater control over the network entities involved
in supply are favoured, particularly FI or US. When garment complexity is less
demanding but raw material specification is still critical, upstream networks suffice. In
contrast, for fashionable outerwear garments requiring design-led specialist operations
but using relatively standard materials, downstream integration – DS networks – is
sufficient and effective. Basic garments such as t-shirts that require commonly
available operational competencies and commonly available raw material tend to be
sourced using non-integrated networks (AG, TN, and TC).
Responsibilities for specific operational activities and processes have been
identified as important aspects for network configuration for multinational companies
(Shi et al., 1997; Verwaal and Hesselmans, 2004; Cox et al., 2001; Coe and Hess, 2005;
Srai and Gregory, 2008). The study here has found that consistent differences do exist
in some areas of functional authority across the primary networks identified,
particularly with respect to design, fabric sourcing, and quality assurance, as described
for each network type in Section 4. However, diversity was also evident within some of
primary categories, specifically US, DS, and AGs, giving rise to sub-classes. The study
indicates that delegation of authority for any of the key activities from a retailer to a
prime manufacturer depends on the complexity of the garments, the perceived
competencies of the prime manufacturer, the maturity of the relationship and trust, and
the nature of integration in the network. However, the picture is varied from the
empirical evidence here and this is noted as a potential area for further study.

6.2 Supply networks of different clothing retailers

The study has shown that there are differences in the types of supply network used
by different clothing retailers and that there is a strong significant association between
the type of retailer and the type of supply network. Evidence for the association
was first identified through qualitative methods and the classification developed in
Section 4. It was then supported strongly by the statistical correlation analysis
discussed in Section 5.
IJOPM Detailed analysis of the evidence has shown fundamental differences in the
33,7 supply networks of a typical established brand retailer and a typical value player in
key respects. Table V summarizes the differences evident from the study between
typical retailers of each type with respect to the major dimensions considered in
the study.
The strong tendency identified for established brand retailers to use integrated
878 networks and for value brand retailers to use non-integrated forms, often managed
through retailer agents, is a significant addition to current knowledge. We do not
expand on differences here as the relevant detail has been provided in Table V and the

Criteria Established brand retailers Value players

Supply network configuration
Relationship between retailer
and prime manufacturer
Level of vertical integration
Nature of the product
Functional authority
Garment design responsibility Retailer, retailer’s regional office Retailer or prime manufacturer
Sample development
Fabric sourcing
Final quality audit
Fabric suppliers
Use of external embellishment
service providers
Use of external quality auditors Used very often – for direct
Table V. Use of sub-contractors
Comparison of a typical
established brand retailer
with a typical
value player
Integrated networks – FI, US, Non-integrated networks – AG,
DS TN, TC
Retailers work with prime Retailers work with prime
manufacturers mainly through manufacturers mostly through
their own regional offices, but independent retail agents, but
sometimes through the sometimes through trading
manufacturers’ regional office companies or directly in
(in the retailer’s country) temporary networks
Upstream, downstream or full No strong integration
integration
Typically products with high Products with simple operations
complexity in operations and and much fewer embellishments
embellishments
Prime manufacturer with close Prime manufacturer
involvement of the retailer’s
regional office
Retailer, retailer’s regional office Typically prime manufacturer
but may be involve independent
retail agent, and/or retailer
Retailer’s regional office Mainly by manufacturers but
may have involvement of
independent retail agent (not
often)
Mostly by suppliers operating Always by independent
within the prime manufacturer’s suppliers
umbrella, sometimes by
independent suppliers approved
by the retailer
Yes – frequently Yes – but less frequently
Used less often and typically for
quality assessment and quality annual audit only
system assessment/audit
Used infrequently and subject to Used often – retailer may be
the clear approval of the retailer. made aware of their use but this
Exclusive production in prime may not always happen
manufacturer’s facilities
important
relevant network descriptions in Section 4. However, we do note that the differences Supply network
highlighted in Table V are supported by empirical evidence from the networks structures
operated by an extensive number of retailers and therefore add very significantly to the
available empirical base on retailer practices in clothing supply networks.

7. Conclusions
The study has examined the networks of a large number of retailers sourcing from 879
prime manufacturers in Sri Lanka. Two objectives were set:
(1) develop an empirically-based classification scheme for contemporary clothing
supply networks to provide new insights on their structure and operation; and
(2) examine whether or not differences were evident in the types of supply network
operated by different types of retailer and in how they manage their networks.

Both objectives have been met. New evidence, understanding and insights have been
presented on the diversity of supply networks in contemporary clothing industry.
Differences in the network types for two important classes of retailers – established
brands and value players – have been identified, analyzed and discussed.
The study contributes to existing knowledge first by studying a specific sector in
detail. The limited number of such studies has been noted frequently and highlighted
as an important challenge in SCM (Giunipero et al., 2008). Furthermore, studying
retailer-driven clothing supply networks using a large-scale empirical study
contributes to the need for greater emphasis to be placed on retail supply networks
(Randall et al., 2011).
Second, the classification scheme presented for clothing supply networks adds
significantly to current knowledge. As argued in the review of literature, existing
generic classifications lack discriminating power when applied to this sector. This is
the first such classification presented for clothing supply networks. It shows the
diversity in the types of network that exist. The analysis has generated a detailed
description of each class of network with regard to the nature of relationships, the level
of integration, the nature of the products produced, and the activities typically carried
out by each of the principal entities.
The third contribution of the study is in showing that established brand retailers
differ in the types of network they typically operate and in how they operate them in
comparison with value players such as supermarket retailers. The study has shown
quantitatively a strong association between retailer type and network type using an
extensive empirical base. The detailed comparison of the typical attributes of each type
of retailer also adds significantly to existing knowledge.
The fourth contribution strengthens the network theory perspective in SCM
(Halldorsson et al., 2007) by providing strong empirical evidence that not only
highlights the importance of the relationships between principal entities, the level of
integration in the network, the nature of the product produced, and the distribution of
functional authority across the network, but also in showing how these dimensions
interact to generate distinct types of network. The message is that for sector-specific
studies researchers need to “dig deeper” in order to generate relevant and valuable
insights to understand how supply networks operate and how they differ.
The findings from the study are important for retailers, manufacturers, and for policy
makers in clothing producing regions. For retailers, both the classification and the
IJOPM principal dimensions used in its development provide a clear basis to compare and
33,7 evaluate network design and management for particular classes of garments. This may
be particularly valuable in critically evaluating networks that have operated for some
time. For instance, it provides a basis to consider whether more or less integration is
needed, and/or whether more or less functional delegation may be desirable in an
existing network. Such consideration may motivate a retailer to modify existing
880 operational practices or introduce new practices to enhance the responsiveness. For
instance, in some cases it may focus attention on a critical activity such as fabric
sourcing and motivate a retailer to move away from conducting this activity themselves
and either collaborate with, or delegate the activity to a prime manufacturer. The
findings from the comparison of retailer types enables established brand retailers to
consider the relevance to them of approaches adopted by value players in sourcing
particular classes of garment, and vice versa.
For prime manufacturers the findings provide understanding and insights to
consider the kinds of network that retailers operate and, importantly, those network
types the manufacturer may desire to operate within in the future. It provides insights
for prime manufacturers on the nature of the relationships with different types of
retailers and the level of integration that is desired by different types of retailer for
different classes of garment. This may allow manufacturers to position themselves to
cater to the expectations of retailers whilst developing their resource base. For
example, a prime manufacturer may consider developing its range of operational
competencies within its network and its links with external embellishment providers in
order to facilitate stronger downstream integration with retailers in design-led fashion
garment markets. A prime manufacturer may also consider enhancing its own design
capabilities in order to offer garment designs to retailer agents representing value
players such as major supermarkets for the supply of simple low cost garments. The
findings may also benefit SMEs working in the sector by providing clarity on the range
and types of network operating within the international clothing industry and focusing
attention on the competencies that might gain them access to different types of
network through collaboration with prime manufacturers.
The clothing industry is significant in the world economy and is highly competitive
(Gereffi and Frederick, 2010). The findings from the study are also relevant for policy
makers in clothing producing regions, particularly in developing economies where the
sector contributes significantly to employment, industrial production and foreign
income. The findings provide a basis for policy makers to consider the types of
network within which their clothing producing regions predominantly operate, how
they may operate more effectively within such networks, and how they may develop
competencies to participate in a wider range of networks. Industry bodies also may use
the findings to promote wider understanding of the requirements and capabilities
necessary to operate within the clothing supply networks of different types of retailer.
Promoting such understanding to small and medium sized enterprises in the industry
is particularly important as their visibility of the wider international picture may be
limited.
Clearly, any study of this type has limitations. The study has focused on networks
where the prime manufacturer is based in Sri Lanka. As noted, it is a large and
important clothing producing region serving many of the most prominent global
clothing retailers. However, there are other very significant clothing producing regions.
Studying the supply networks anchored in other regions allows the findings here to be Supply network
tested and compared. The broader work conducted for this study indicates that structures
retailers’ global practices are similar in different global regions but this needs to be
examined and tested. In particular, a comparative study including countries like
Sri Lanka, Bangladesh, China, and Turkey that have different competitive advantages
in the global clothing market would provide an interesting and valuable study to test
the existence and prevalence of the network types identified here and allow similarities 881
and differences in retailer approaches to be examined further. The dimensions for
analysis and classification used in the study reported here provide a research
framework to conduct such a comparative study. In addition, such a study would also
allow the impact of different geographical locations to be included and its impact
determined.
As noted in the review of literature, retail supply networks have had comparatively
less research attention than producer-driven industrial supply networks. The types of
network described in this paper may also be relevant to retail supply networks in other
globally dispersed industries. In particular, we note not only related sectors such as
footwear but also other retail sectors that may share some of the characteristics of
the clothing sector, for instance some internationally sourced food products and the
international toy industry. The study here provides a research framework to consider
such sectors, first in terms of analysis and classification based on SCM constructs
relevant to that sector, and second in comparing the practices of different types of
retailer. Comparing findings from such studies with the findings here would enrich
both the theoretical and empirical bases for sector-specific supply networks.

Note
1. In specifying this dimension the most common categories of garments sold in retail outlets
were considered. It excludes highly specialised categories such as bridal wear that are
insignificant in the context here.

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(The Appendix follows overleaf.)

IJOPM Appendix. Illustration of supply network structures
Key:
33,7
= permanent entities of the network.
= several locations of the same entity/several entities in the same type.
886 = temporary entities of the network.
= focal firm of the network.
= vertical integration.
= permanent functions of an entity.
= temporary functions of an entity.
= functions operated as a collaborative effort.
= link between the players of the network.
= material, semi and finished garment flow of the network.

The illustrations show the entities of the network, tiers, focal company, links between the entities,
physical flow of goods between the entities, and main operational practices in the garment
production process (Srai and Gregory, 2008). Permanent entities of the network are shown in solid
circles (Lambert et al., 1998; Achrol and Kotler, 1999; Choi and Hong, 2002). The most powerful
entity – focal firm – is depicted as a shaded circle (Lambert and Cooper, 2000; Catalan and Kotzab,
2003). Entities temporarily operating in a network are illustrated using dashed lines/circles.
For instance, networks utilizing the services of external embellishment service providers, quality
auditors, subcontractors on an irregular basis are illustrated with dashed lines/circles.
The number of layers adjacent to circles shows either the different geographical location of the
same entity or several similar types of entities (Meixell and Gargeya, 2005). For instance, layers in
the depiction of the retailer indicate that the head office and branches are spread in different
geographical locations. The layers in the depiction of the prime manufacturer indicate the main
operations centre and several other production plants. Integration of the network, either backward
or forward, is shown by a dashed line covering the respective entities. Solid arrows and dashed
arrows represent the links between network entities and the physical flow – either raw material or
finished garments, respectively, (Lambert and Cooper, 2000; Gardner and Cooper, 2003).
The main operational functions of the clothing production process are illustrated using
rectangles, drawn within the respective entities (Lambert et al., 1998). Rectangles in solid lines are
for permanently performing operational functions, and dashed-line rectangles are for temporarily
operating functions. In addition, operational practices performed by several collaborating entities
(e.g. retailers and manufacturers) are illustrated as shaded rectangles (Nassimbeni, 1998) and
shown within the respective entities. For instance, two shared rectangles appearing in retailer and
in the manufacturer indicate that the retailer sources fabrics in collaboration with manufacturer.

Corresponding author
Bart L. MacCarthy can be contacted at: bart.maccarthy@nottingham.ac.uk

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