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Global Sourcing Chapter 1

Terms in this set (85)

Apparel Supply Chain
the sequence of business processes involving single or multiple businesses and countries that enables demand for products and/or services to be satisfied
Value Chain
a set of activities at various stages of the supply chain that add value/worth to apparel products
apparel
wearing apparel and accessories with the primary focus on wearing apparel
Cut-make-trim (CMT) factory or vendor
apparel contractors that commonly provide apparel assembly as their primary service
what do cut-make-trim (cmt) factory and vendors do?
- cut the fabric
- make the garment
- trim the excess seams, loose threads, and package ready for shipping
global trade
interactive participation of many groups, cultures, and nations in the merchandising, design, development, production, and distribution of products and design
globalization
a process whereby the world's people, their firms, and their countries become increasingly interconnected in all facets of their lives
trade
exchange of goods, service, or both; can be domestic, international or global
domestic trade
the exchange of goods, services, or both within the boundaries of a specified state of country
international trade
any exchange of goods involving two or more countries
global trade
interactive participation of many groups, cultures, and nations in the merchandising, design, development, production, and distribution of products and design
globalization
a process whereby the world's people, their firms, and their countries become increasingly interconnected in all facets of their lives
trade balance =
exports - imports
characteristics of the apparel industry
1. labor intensive
2. low entry barriers
characteristics of the textiles industry
1. capital intensive
2. technology intensive
characteristics of developed countries
1. trade deficit in apparel production
2. still actively involved in design, product development, sourcing, and brand management
3. some domestic production of high-end branded goods
characteristics of developing countries
in the transition phase between primary focus on:
1. export
2. increasing domestic consumption
3. increasing imports from lower-wage countries
characteristics of newly developing countries
1. large labor force, lowest wages
2. low infra structure (physical and governmental) and low literacy rates
3. apparel surplus
4. textile trade deficit
apparel firm
a commercial or industrial business that is engaged in some aspects of designing, merchandising, marketing, producing, and/or retailing garments and/or other attire
apparel industry
combination of trades and businesses that contribute to designing, developing, producing, and retailing garments and other attire that covers, protects, and/or adorns the human body
apparel manufacturer
firm engaged in the entire process of apparel manufacturing; might also be involved in sourcing materials and/or retailing
apparel manufacturing
processes involving division of labor for designing, merchandising, developing, producing, and often wholesale marketing garments and/or other attire that adorn the human body
apparel production
part of the process of apparel manufacturing that actually converts materials - including fabrics, findings, trims, and usually thread - into garments; also known as apparel assembly
apparel production vendor
firm that takes orders for apparel products from other firms and that either produces or arranges for the production of those specific garments; historically called production contractors
apparel sourcing
determining the most cost efficient vendor of services, materials, production, and/or finished goods at a specified quality and service level, for delivery within an identified time frame
brand manager
a former apparel manufacturer that is engaged in design and product development but owns little or no production facilities and sources garment assembly from vendors located elsewhere in the world
clothing
wearing apparel including men's, women's, and children's garments as well as gloves, footwear, and headgear
accessories
handbags, jewelry, purses, wallets, tote bags, and belts as well as eyeglass frames
conglomerate
business formed when firms serving multiple markets join together with common ownership
contractor
firm that provides services for other businesses, often used for selected apparel manufacturing processes; in today's sourcing language these firms are called vendors
country of origin
the location where an article was wholly obtained; when more than one country is involved, the location where the last substantial transformation was carried out; the location where there is a change in the product designation number, according to the Harmonized Commodity Code and Designation System (HS)
department store
retailer that provides a variety of product lines, including apparel for men, women, and children; soft goods for the home; and home furnishings, usually at moderate-to-higher price levels
developed country
a nation whose gross domestic product per capita and other measures of well-being fall well above the world average
developing country
nation whose gross domestic product per capita and other measures of well-being fall near or slightly below the world average
e-commerce
electronic business or exchange conducted over the internet
e-tailing
retailers providing opportunities for ultimate consumers to purchase products or services, using electronic systems such as the internet
exports
goods shipped to another country for import in exchange for money, other goods, or jobs
findings
materials other than face fabric used to construct garments: interlinings, pocket bags, linings, closures, and trims
firm
any for-profit business, corporation, proprietorship, or partnership
Full-package factory or vendor
apparel production firms that not only provide production services but also assist with and finance materials sourcing and some phases of product development
garment
a piece of clothing
GDP per capita PPP
abbreviation for gross domestic product per capita adjusted by purchasing power parity
Gross Domestic Product (GDP)
market value of the output of products and services produced within a country in a year
gross domestic product (GDP) per capita
gross domestic product (GDP) of a country divided by the number of people in the population after GDP has been adjusted by purchasing power parity (PPP); hereafter referred to as GDP per capita (PPP)
gross nation product (GNP)
value of the average output produced by domestic residents of a nation as they labor within that nation
gross national product (GNP) per capita
gross national product of a country divided by the number of people in the population
horizontal intergration
when previously competitive enterprises engaged in offering similar goods or services join together under a single management organization
import and export trading
a recently developed type of enterprise that assists textile and apparel firms in satisfying customer demand for goods and services from the global market
imports
goods available for domestic consumption or materials available for domestic production because of exports of other countries
international trade
any exchange of goods involving two or more countries
lean retailing
effective management of inventory, based on accurate and timely information and frequent resupply
market week
calendar time set aside for trade shows featuring manufacturers' and brand managers' lines of textile materials, apparel, or machinery, presented at wholesale to other manufacturers or retail buyers
mass retailer
a firm that offers a wide variety of consumer goods in a self-service environment with broad appeal across income ranges, ethnic groups, occupations, and lifestyles
merger
combining two business entities into one larger business
newly developing country
nation whose gross domestic product per capita and other measures of well-being fall well below the world average; just beginning to be engaged in industrial development, likely to involve apparel production; some sources use term "least developed country"
Nonstore Retailer
a firm that sells goods to the ultimate consumer without use of traditional "brick-and-mortar" store presentation
origin-conferring operations
processes that determine what a label on a product will state as country of origin
outsourcing
contracting out specific operations to a domestic or foreign vendor with the goal to perform these operations more efficiently and/or at a low cost; outsourced operations might include manufacturing, product development, logistics, IT, accounting, customer service, etc.
outward processing
temporary exporting of goods for manufacturing processes or repair purposes; the goods are then re-imported back into the country with partial or total exemption from import duty or taxes; primarily used in European Union
per capita
by or for each individual; total is divided by the number of individuals involved; all share equally
per capita purchasing power parity
measure that allows comparison of well-being among populations in different countries, as indicated by GDP, determined by adjusting GDP of a country by the buying power of its currency using the Consumer Price Index and dividing the total by the number of people in the population
politics
methods or tactics involved in managing an organization, business, state, or government, often in a pursuit of self-interest; sometimes includes crafty or unprincipled methods, or both
product developmet
design and engineering of products to be serviceable, producible, salable, and profitable
Purchasing Power Parity (PPP)
measure that allows comparison of well-being among populations in different countries, as indicated by GDP; determined by adjusting GDP of a country by the buying power of its currency using Consumer Price Index
quota
method used to restrict quantities of certain types of goods that can be imported or exported; limit on the quantity of products allowed to enter or exit a country
retail product developer
individual or team that creates product designs and develops merchandise plans and specifications for a retailer's private brands, which are ultimately sourced from production vendors
retailing
sale of merchandise or services, or both, to ultimate consumers
soft goods
products made of textiles or other flexible materials: fabrics, apparel, linens, towels, upholstery, and small fashion accessories
sourcing
process of finding, evaluating, and partnering with a vendor to secure services, materials, production, or finished goods, or a combination of these, at a specified cost, quality, and service level, for delivery within an identified time frame
specialty retailer
retailers that focus on specific classes of merchandise to the exclusion of other products
supply chain
total sequence of business processes involving single or multiple companies and countries that enables demand for products or services to be satisfied
Sustainability
involves the corporate, government, and consumer responsibility to integrate economic, political, environmental, and cultural dimensions to promote cooperation and solidarity among people and generations
takeover
the absorption of a weaker firm into a more successful operation
textile complex
the combination of textile-related industries that supply soft goods to the world population
Textile Industry
combination of trades and businesses that contribute to production, manufacturing, and retailing of fibers, yarns, fabrics, and related materials
textile materials sourcing
identifying appropriate countries of origin and vendors of fabric, thread, or findings at a specified quantity, quality, and service level, for delivery within a designated time frame
trade
exchange of goods, services, or both; can be domestic, international, or global
trade agreement
means of encouraging, regulating, or restricting elements of trade among countries
trade balance
quantitative relationship between exports and imports of a country
trade barriers
means of regulating or restricting trade; examples include state trading, tariffs, quotas, and limits on foreign investment
trade deficit
negative trade balance; value of imports exceeds value of exports
trade surplus
positive trade balance; value of exports exceeds value of imports
vertical integration
combining firms that perform different stages of the manufacturing and/or retailing of similar and/or compatible types of products
wearing apparel
garments that adorn the human body for comfort, protection, and adornment
World Trade Organization (WTO)
an institution with more than 160 countries as members; deals with the global rules of trade among nations
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