Apparel production is one of the most globalised activities in the world economy, Christenson & Appelbaum, (1995) as cited in Eun-Ju Lee. As apparel represents a highly labor-intensive industry (Ckine, 1994) because some of the apparel production process like cutting trimming, and sewing is difficult to mechanize. The labor-intensive nature of apparel production has prompted growth of international production and trade networks seeking economic efficiency which some times lack locally.
In some instances the production of apparel occurs in vertically disintegrated subcontracting networks, of the global commodity chain, Gereffi (1994) as cited in Eun-Ju Lee Resources and capabilities that permit a particular country to take a more profitable position within the apparel commodity chain include not only labor factors and physical, financial resources, but also relationship based assets and marketing – based assets such as brand names, Madhok (1996) as cited in Eun-Ju Lee.
Countries that possess such resources and capabilities are, therefore likely to develop advanced competitive advantage beyond offering a low-cost product, and can command high values in world market, Lee & Kwon as cited in Eun-Ju Lee At the other end of the buyer-driven apparel commodity chain are less developed countries.
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Workers in less developed countries dye, cut, trim, and sew apparel products, according to the specifications of the lead firms in the apparel supply chain. As in the less developed or still developing countries the units will have highly skilled labor but has poor capital to complete the entire manufacturing of the apparel, they tend to supply their partly produced work to the ready made buyers and act as sub contractors.
In apparel industry, the way of global sourcing operations can be illustrated with the following example: A plastic production company ships its supply to a zipper which in turn distributes its production to the global garment maker who stitches these zips on the clothes. Some of the Supply chain factors that influence Global sourcing in Apparel industry are, Labor rates, Production system, Machinery and equipment, Information Management, Quality management, Methods of control, Industrial engineering overall direct cost level
The principal contributors to indirect costs as perceived by the buyers are related to pre-production activities such as development capability and full package capability as well as to minimum order size. The principal capabilities investigate in terms of product development were design capability, sample development, marker making and unit costing. General capability with regard to overall full package capability, that is to source and supply fabric as well as to cut and sew.
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