Fast Fashion

portal The dress industry, as one of the close world-wideizes industries in the world (Fibonacci et al 1994), is currently undergoing a restructuring, especially the stead refrain demeanor sector. Fashion grocery stores ar synonymous with rapid changes and brusque point of intersection life calendar method of birth controls. Therefore, changes in consumer contend for newness and devise trend force the emergence of fast expressive style schema in retailers like Ezra and HM and shifts in the focus of competitory wages from price towards dissolute resolution.That is to say, clothing firms, which argon doning worldwide or shoreward sourcing dodging, are not noninsured to welcome more than war-ridden avails as before. However, the mind is should fast means retailers adopt warm response system kinda of abroad sourcing dodge immediately, or adopt twain strategies? In the first section, a literature review of the nature of forge market and relate argument s will be introduced. The overseas sourcing strategy and the prompt response strategy will be explained with theoretical accounts of existing clothing firms in the second and the third gear section.The fourth section will compare and contrast the advantage and disadvantages of these 2 strategies. Combining theoretical knowledge with empirical human face studies, it is argued that companies could reach the upper limit profit by adopting overseas sourcing strategy as well as nimble response strategy. 1 . Literature Review Fashion retailers, such(prenominal) as Ezra, HM, Benton and label Spencer have revolutionized the fashion industry by creating a c at one timept of fast fashion.The change in the culture of fashion from haute couture to fast fashion has attracted legion(predicate) researchers to identify and explore the nature of fast fashion market (Tokomak 2008, p. 22, Christopher et al 2004, p. 367, soul and -raccoon 2008, Tactile et al 2008). Accordingly, mindless life cycles, rapid prototyping and high volatility are identified as the key features of the fashion market. Compared to other industries, apparel product manufacturing has unique features, for instance, numerous SKIS ( memory board keeping unit) in a season, hard to estimate customers withdraw and childlike range of products for basic to fashion items Non 2004).All these unique characteristics require a unalike shape up to action sourcing, Soul and Turn-on (2008) pointed out that fast fashion retailers prefer using an opportunity-pull approach to the conventional designer-push model. By adopting the new approach, retailers could answer to the shifts in the market as quickly as possible. As a result, the more continuous action schedule (eight to twelve fashion seasons) has substituted for the traditional cardinal to four seasons calendar (Tactile et al 2008, p. 264, Dickens 2011, p. 316).In relation to globular proceeds meshworks, Dickens (2011) identified the core of a glob al occupation network as the circuit of four basic operations, which refers to inputs, transformation, distribution and consumption. Theoretically, the quicker the end product circuit flows, the higher the gross margin the company can gain. When we expend the theory into the clothing industry, the price of production and the speed to response to changes in consumer demand are equally important. Both of them could contribute to the flow of production circuit.Since numbers of studies have elaborated the benefit of production relocation, the implementation of quick response strategy by fashion retailers has attracted the interest of researchers in upstart years (Bristle et al 2003, Perry and Shoal 2000, leer and Bergen 1997). However, results of an exploratory study (Bristle et al 2003) shows that the advantages of quick response strategy have not been fully still by fashion retailers. They tend to implement quick response strategy for internal bestow chain management.Moreover, leer and Bergen (1997) tried to use testicle model to examine the impact of quick response strategy on fashion retailers. Although there is companies already adopted both strategies, limited forethought has been paid to the combined force-out of these two strategies by researchers. Hypothesis In an era of fast fashion, companies that adopt both global sourcing strategy and quick response strategy have better chance to succeed in the fashion looting market. 2. Cost, the most basic consideration. In order to have higher profit margin, one of the most effective fashions is to fade down production cost.In view of the low labor cost in developing countries, global sourcing seems to be a mature choice to subordinate costs. With the development of global production networks and the increasing competition, fast all fashion clothing firms have shifted their manufacturing operations to low lost locations over the old decades. The shifts in the Shares maker Levi Stratuss global strat egy could vividly demonstrate how global sourcing strategy works and affect its supply chain. At first, the company was created in the USA.As it developed and became a global company, they began to employ workers all over the world. However, in face of fierce competition, Levi Strauss started to shift its operation to lower-cost countries in the late sass. By the year 2003, Levi Strauss closed the last four plants in North American and has become an entirely seaward pay backr (Dickens 2011 p. 318). The German fashion company Hugo hirer as well as provides similar example. In face of high production cost, viz. high labor cost in national market, more and more fashion retailers demand to outsource their production.Moreover, some fast fashion retailers hitherto have no manufacturing competency (Tokomak 2008). The representatives of this kind of retailers are Gap, H&M and Mango. As they do not own any factories, the only way for them do produce their products is outsourcing. The s uccess of these retailers without factories proves the feasibility of global sourcing strategy. By contrast, when most retailers were busy outsourcing their production to lower cost countries, some fast fashion retails still insist on national sourcing strategy, for instance, Ezra, Benton and Marks & Spencer.They held the view that market legibility and lean inventories may be more important than tinny labor (Tokomak 2008). However, could efficiency really overcome the lost in higher production cost? Maybe no one could answer this question. If we take Ezra as an example and experience out where Ezra produce the products, we could develop our own view. As a Spanish company owned by Inedited, Ezra produce its products mainly in Spain and Portugal (Wood 2010). Whereas their competitor found suppliers from worldwide low-cost countries, Ezra choose to produce products near its domestic market.That maximizes time efficiency. In fact, the unit labor costs in these two countries were lo w enough in the sass (Tokomak 2008), therefore, there is no need for Ezra to outsource its productions to other locations. It has the similar competitive advantage as other companies have, besides, by domestic sourcing and producing Just-in-time, Saras production cycles are such(prenominal) high-speed than its competitors. In this respect, it is better for Ezra to adopt the domestic sourcing strategy. However, recent years, the geography of Saras production network has become diverse.Ezra started to outsource and 34 percent of its production was carried out in Asia (Dickens 2011). Similar situation have also occurred in Benton and Marks & Spencer. On one hand, the unit labor cost among European countries has increased in recent years. On the other hand, the supplier firms in countries like Turkey, India and Asia have gained the ability to meet the higher requirement of tractableness and speed. It is inevitable for fast fashion retailers sourcing from these countries. However, co mpanies should also be aware of the possible risks and hidden cost brought by overseas sourcing.Global sourcing strategy requires close coordination of R&D, manufacturing, and marketing activities on a global basis. Managing geographically separated R&D, manufacturing, and marketing activities, those companies face difficult coordination problems of integrating operations and adapting them to different legal, political, and ethnic environments in different countries (Daniels et al 2013). Furthermore, separation of manufacturing activities involves an inherent risk that manufacturing in the value chain will gra two-foldly becomes neglected.Such neglect can be costly as continued involvement in manufacturing tends to lead to pioneering product design and innovation over time. An effective global sourcing strategy calls for unremitting forts to streamline manufacturing without sacrificing marketing flexibility. 3. Time, the gro surviveg consideration. With the wide spread of fast fa shion principle, fast fashion retailers are aware of the importance of efficiency. They notice that consumer demand is ever-changing more rapidly and customers more discerning about quality and choice.Although a substantial cost advantage can be gained by adopting overseas sourcing strategy, it cannot compress time in the supply system. To solve this problem, companies tend to choose the quick response strategy, which focuses on providing shorter lead times. According to Bristle et al (2003), quick response strategy was first developed as a result of the need to compete with offshore manufacturers in the USA. The quick response strategy emphasizes on flexibility and product velocity and relies on a measure of trust in sharing information (Barnes and Lea-Greenwood 2006 p. 63). In addition, composition maximizing the diversity of products, quick response could minimize lead-times, expenditure, cost and germinate of inventory. Quick response is not merely about cut lead-time by the use of domestic or near sourcing strategy, it also involves the ability to hoard latest information and use real-time data to take the involve of the consumers. To some extent, quick response help to shorten the product cycle times and decrease risks and inventories at each stage of manufacturing and retailing operations.The Spanish Ezra, as mentioned before, is an excellent example of a vertically integrated retailer using quick response methods (Bristle et al 2003). Despite successful application program of the concept fast fashion in HM and steer Shop, Ezra utilizes the fast fashion strategy in all aspects dominant, fast fashion in Ezra meaner, within only two weeks from concept to sales faster than any other company. Unlike most of its competitors, Ezra still produces most of the products in Spain and Portugal and only outsource basic items in lower cost countries.By adopting quick response strategy, Ezra focused on creating a short, flexible, tight and innovative supply c hain and tried to balance the higher labor cost by shorter (3-6 weeks) lead times. As a result, Saras short deliveries have made it as much as 12 times faster than the competition (Newsweek 2001, p. 36, cited in Tokomak 2008, p. 30). Ezra launches close 11000 new products in a year, which meaner the update speed is about two or three times a week. In 2005, sales grew by 21 percent over the prior fiscal year in Ezra, which makes Inedited ahead of H&M for the first time (Daniel et al 2013).The total result indicates that domestic sourcing still works as long as the company finds out a way to compensate for the losses in production cost. Having witnessed the successful experience of Ezra, competitors started to follow the lead of Ezra. For instance, Benton now replenishes stores once a week, Forever 21 Inc. And Unique are able to reap new products in store thin 6 weeks (Ordered and Johnson 2008). Another example that worth to be mentioned is the Next brand in the ELK. Base on the qu ick response strategy, the company uses a limited edition approach to accelerate the update speed.Moreover, in order to respond to the changes in demand as soon as possible, next has even purchased part of a multi-national clothing supplier to enable constantly changing ranges by reducing lead time (Bristle et al 2003). As we can learn from the case studies, time becomes a priority consideration in the fashion market. The bankers acceptance of quick response method should be able to make manufacturer to adjust the reduction of different styles, colors and sizes in response to retail sales during the season (Seen 2007). 4.Comparison between overseas sourcing strategy and quick response strategy One of the biggest differences is that overseas sourcing strategy uses cost as a competitive weapon while quick response strategy uses time. As we known, both cost and time are the keys for retailers to gain more market piece and profit The dilemma for fast fashion companies is Whether fashi on retailers should outsource production overseas for lower production cost or keep manufacturing nearby to facilitate speed. As highlighted earlier, the fashion market is volatile and unpredictable.Quick response strategy emerges in such an environment. Compared to overseas sourcing strategy, which faces long transport times and hindrance in controlling over production, quick response strategy enables retailers to trade with uncertainty or changes in the fashion market. On the other hand, although domestic sourcing provides companies from paying for higher logistic cost and other hidden costs, offshore sourcing secures lower cost inputs, (Christopher et al 2004). It is argued that fast fashion companies need to adopt strategies that optimally mix overseas sourcing ND quick response to win the market.The changes occurred in Marks & Spencer over these years could help us understand the advantages and disadvantages of both strategies. As a major British retailer, it chooses to use local anaesthetic suppliers for decades. However, in face of the downward pressure on price, it abandoned its domestic sourcing strategy and started to relocate production overseas (Christopher et al 2006). Accordingly, the average periodical labor cost in the I-J is nine times higher than in Morocco and even nineteen times higher than in China, Pakistan and Indonesia.After adopting oversea suppliers, Marks & Spencer on noticed that they overlooked the related problems, such as the cost of transportation, the need to forecast styles, colors and volumes in advance and the risk of stock inventory. Facing the challenge of adopting global sourcing, Marks & Spencer tend to use dual supply chains. By coxcomb global sourcing strategy and quick response strategy, fashionable items are manufactured in locations with a expedition time no more than four days.For basic items, for which demand is easier to be predicted, Marks & Spencer continue producing them in lower cost locations (Christop her et al 2006). Likewise, Ezra has also adopted both strategies for its supply chain. Today, price is no longer the unconquerable factor that concerned by customers. Many companies consider not apparently price but also quality, reliability, and technology of components and products to be procured. These companies design their sourcing stopping point on the basis of the interplay between their competitive advantages and the comparative advantages of various sourcing locations for long-term gains.By contrast, they care more about the quality, design and the level of popularity. Therefore, companies have to find the balance between cost and time. If fast fashion tillers make good use of these two strategies, like M&S and Ezra did, the negative effect could be covered to a large extent. Conclusion Volatile markets, short product lifestyles and high product variety are the characteristics of today are clothing industry. This essay mainly discusses the adoption of two common strateg ies- global sourcing strategy and quick response strategy, in fast fashion clothing sector.Although most companies already have chosen outsourcing strategy to maintain the competitive advantage, the nature of todays fashion market forces companies to consider the importance of speed and flexibility. The psychoanalysis of both strategies with the help of real companies experience shows that both of them have arbitrary and negative effects on fast fashion retailers. However, overseas sourcing strategy and quick response strategy are not mutually exclusive. In practice, the successful examples of M&S and Ezra have proved the feasibility of combing global sourcing with quick response strategy.