First Faculty Advisor
Second Faculty Advisor
risk mitigation; offshore; supplier selection; CSR; fashion
Purpose – Many supply chains offshore manufacturing to countries such as China to take advantage of low-cost labor, substantial capacity, and expertise. Such low-cost country strategies create supply chain complexity and therefore increase risk potential. Using the fashion industry as a context, this study examines criteria that the fashion industry considers to mitigate risk when selecting their international suppliers.
Methodology – The primary data collection for this paper consisted of an extensive literature review and in-depth qualitative interviews with supply chain professionals of fashion companies. A variety of different businesses and professionals were studied for this research.
Findings – Examples of potential sources of risks identified by informants include quality, forecast inaccuracies, international trade implications, global health and economic risk, and geographic distance. Despite the success of China as a garment manufacturing hub, fashion retailers are diversifying risk by shifting some production out of the country. Retailers prioritize corporate social responsibility practices and continuously monitor or audit their suppliers to ensure that their values are being upheld.
Research Limitations and Future Research – Findings from this research can be used as a framework to conduct additional interviews and develop and administer a survey to fashion industry professionals to gather additional quantitative data.
Originality/value – The papers identifies risk mitigation strategies and the connection to ethical manufacturing. While the context of this study is the fashion industry, findings can be broadly applied to supply chain risk mitigation in many other industries.