A Comparative Study of the Supply Chain Key Factors Differentiated by Nearshore Manufacturing

Shahriare Mahmood, Hanna Kropsu-Vehkaperä and Pekka Kess
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Shahriare Mahmood: University of Oulu, Department of Industrial Engineering and Management, Finland
Hanna Kropsu-Vehkaperä: University of Oulu, Department of Industrial Engineering and Management, Finland
Pekka Kess: University of Oulu, Department of Industrial Engineering and Management, Finland

from University of Primorska Press

Abstract: The impact of globalization has led the global brands to offshore production, but the everincreasing demand of fashion products and the need for replenishment in quick succession demands for manufacturing near to market. Moreover, in-season purchase is also favoured as a curtailed risk where small volume is needed to be produced in short interval. As traditional offshore production setup of fashion supply chain is not eligible to fulfil the agile demand, near shore production could be effective to meet the need. Albeit it is a known phenomenon that near shore manufacturing is not as cost effective, but it could be lucrative while considering the big picture. Different operational setup has an impact on supply chain arrangement where the key factors have difference in priority. The aim of this paper is to analyse the key factors and to study the difference in importance level of those supply chain factors. Pre-set supply chain key factor’s impact is analysed for two different supply chains where one has its own production operation for the final product and another is outsourcing completely. The collected data from both the cases is analysed through analytic hierarchy process to understand the priorities of the values. Eventually it has found that the supply chain factors are nearly equally important in both cases, but still there are differences in importance among some factors. Although both the cases have few common features, which is ideal for comparison, but it could be beneficial to study few more similar cases to establish the phenomenon. The exclusivity of this research is to examine the significance of nearshore manufacturing and point out the important considerations in different cases. In particular, it has taken into consideration also the complicacy of textile supply chain for selecting the key factors. The intention is to add some knowledge on selection of supply chain strategy and open up the possibility to rethink the existing strategy. Particularly it is important for those who wants to endorse agile strategy.

Keywords: supply chain management; nearshore manufacturing; analytic hierarchy process; fashion supply chain (search for similar items in EconPapers)
Date: 2017
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