McCormick+Schmitz Handbook for value chain research on - PACA

ut more frequent orders. Manufacturers who can deliver quickly are likely to get the
orders. This seems to favour domestic producers. American garment makers, <strong>for</strong> example,
increasingly offer electronic ordering, automated distribution centres, and inventorymanagement
systems linked to those of their customers. Some can deliver orders at a few
days’ notice, something difficult <strong>for</strong> developing country producers to match. Wherever
production takes place, the emphasis is necessarily on speed and quality.
What does all of this mean <strong>for</strong> workers? First, the continued presence of both standard
and fashion garments in the market means that <strong>for</strong> the immediate future at least, there will
be mass-producing factories making that million blue polo shirts <strong>for</strong> The Gap. These
orders will be filled in countries where low labour costs are the chief competitive edge.
Lean retailing may have some effect. For example, retailers may decide to buy their very
large or very small sizes closer to home in order to reduce the probability of getting stuck
with a size that won’t sell. But the overall impact on producers of standard garments - and
by extension on their workers - may be minimal.
Lean retailing will have a much clearer effect on workers producing fashion garments.
Here order sizes will be smaller, so workers will be required to change what they are
doing much more frequently. If, as some predict, retailers are willing to sacrifice price <strong>for</strong>
delivery speed and more goods are produced near the point of sale, total volumes
produced in developing countries could stagnate or decline. In this case, both factory and
homeworkers could find themselves with less work than previously. Even if the work is
there, the emphasis on speed is likely to put considerable pressure on workers.
Homeworkers, who are paid by the piece, are likely to feel this most keenly.
The emphasis on speed is also likely to change manufacturers’ approach to quality. With
very short lead times, low quality work is more likely to be rejected rather than reworked.
This could further diminish the incomes of homeworkers, whose pay depends on accepted
pieces.
[Readers: could you provide a case study or some concrete examples to illustrate this
section? DM/HS]
28