Lessons From The School of Hard Retail Sourcing Knocks

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Sourcing Journal Online recently published a column by Mike Todaro, managing director of the American Apparel Producer’s Network, simply titled Sourcing is Hard. The piece is ingenious and captures, in roughly 1,000 words, why the intersection of sourcing and supply chain is difficult for so many industries beyond just retail (while using apparel examples to illustrate its points). If you read one thing this month, check out this op-ed.

Todaro begins by framing his argument by adopting a Yogi Berra quote. He observed that, “Yogi Berra once said, ‘Baseball is 90 percent mental, the other half is physical.’ In sourcing, we might say 90 percent of the problems are from not talking to your supply chain, the other half are bad accounting.” One of the reasons for this challenge today, he said, is declining vertical integration of supply chains that has led to operations skills gaps.

I also like his points about tapping lower-tier suppliers for market intelligence. As he observes here, “The supply chain knows who is making what for whom, and their capacity to make it.” Take the following questions (and his answers) as examples:

  • Is production coming back? Ask the thread guys.
  • Who makes world class underwear? Ask the elastic guys.
  • Where is there a great pants factory? Ask the zipper guys.
  • How can I differentiate my garment? Ask the label/embellishment guys.The supply chain knows.”

Indeed it does. But OEMs and buyers further up the chain rarely stop to engage lower-tier suppliers and develop relationships. Perhaps this lesson from the apparel industry will wake up at least one large buying organization in another market to the benefits of getting to know lower-tier vendors on an individual basis.

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