Fashion Marketing: Contemporary Issues, Second edition - Pr School

Supply chain strategies, structures and relationships 33
Gabbana, Gucci and Chanel. Consumers are not afraid to mix and match
either, no sense of customer loyalty here.
So where to source: local or global?
Well the answer to this question depends on the strategy. If your strategic
focus is to achieve lowest cost you would need to source from a supplier
who would help you do that. It may not matter where in the world the supplier
is located or would it? Well not if you simply specify a contract price
the supplier has to meet, along with delivery schedules the supplier has to
meet too. However, there may be more uncertainty and there may be higher
risk involved. For example, not as easy to get to the source if it is located
geographically half way round the globe, if the plant managers don’t speak
your language and don’t engage in practices that you have come to expect of
your local supplier who you have now ditched because you have been able on
paper at least to lower cost. Nor is it easy to know about or overcome disruptions
to supply – strikes, tsunami, customs impounding merchandise, tariff
disputes, accidents on the high seas, delays, other problems of manufacture.
Things are always more difficult to manage at a distance even in the age of
the Internet and advanced information communication systems. One manager
told me it is easier, faster and cheaper to transmit errors but it still takes time
to sort them out because it usually involves face-to-face interaction. Maybe
distance is not dead after all (Cairncross, 1998). If on the other hand your strategic
objective is to satisfy customers and earn a reasonable profit in so doing
it may be appropriate to source closer to market to catch a trend. Hence it may
be appropriate to source more locally. The premise here would be that what
you incur by way of higher cost is set against faster lead times for delivery
of the product. Thus if time is an important part of achieving your competitive
advantage then it would be sensible to make the trade-off. Uncertainties
may be lower from local supply sources because you may be in more regular
contact. Hence establishing relationships may lead to improving competitiveness.
Nevertheless, for each of these arguments I am putting forward you
could equally present the opposite argument and you might be right given
the particular circumstances. This is why the herd-like decision-making that
takes place in many retail organizations is problematic. Supposing a group of
twenty-something buyers just happen to meet at a business/social occasion in
Corks Winebar, London. Inevitably the subject of what they do, how well they
are doing, how much they get paid, what fun they had on their last buying
trip to Vietnam or Bangladesh and so on comes into the conversation and for
all they may deny it maybe they let slip who they buy from, prices paid and
how good such and such is or don’t touch supplier X may creep into the conversation.
The discourse of many retail organizations has been about lowering
intake cost to improve retail margins. No question here about being a better
retailer in terms of knowing their customer and how to meet their needs better.
Not much marketing here! However, catching a trend, buying cheap and
hope you sell through is probably a relatively good description. However, if