Chapter 4 - Sourcing decisions Across the Supply Chain

Sourcing

Happens from beginning of the supply chain to the end. 

1. How, when, where, and by whom will the textiles and materials we use be designed manufactured

2. How, when, where and by whom will the merchandise we sell be designed, manufactured, and distributed. 

Yarn forward rule of origin

 a trade rule that allows apparel to be duty-free if the yarn and all production steps happen within the countries in the agreement

Company and design criteria (internal)

the company’s approach to design and manufacturing, including production costs, fabric/material quality and availability, quality control standards, needed equipment and skills, factory capacity, and social/environmental responsibility.

Political and geographical criteria (external)

government rules and trade policies, location and shipping distance, country infrastructure, availability of materials, political and economic conditions, and risks like natural disasters

The company’s sourcing philosophy

(1) Serves as a guideline or framework for sourcing decisions across their supply chain

(2) Outlines which of the following criteria are priorities for them

Social responsibility/ corporate social responsibility(CSR)

prioritizes economic, environmental, social, and cultural sustainability in their sourcing decisions.

Offshore sourcing

getting materials or making products in another country instead of where they’re sold.

Infrastructure

 the basic systems a country needs to function (roads, power, water, ports, communication, etc.).

Sourcing options

the different ways a company can get materials and produce goods (like vertical integration, contract production, domestic or offshore sourcing)

Sourcing fairs

trade shows where companies and manufacturers meet and connect

Domestic sourcing

getting materials and producing goods in the same country where they are sold.

Local sourcing

getting materials from nearby suppliers within a certain distance of where products are made or distributed

Advantages of offshore sourcing

lower costs, better access to materials, available factory capacity, and being closer to global markets

Disadvantages of offshore sourcing

tariffs and trade limits, language/cultural barriers, different laws, shipping costs and environmental impact, and currency changes.

Combination sourcing

using both domestic and offshore sources to stay flexible and adjust to changes in demand, trends, and production needs

Steps in sourcing decisions

define company goals, design the product line, choose materials, evaluate sourcing options, check factory standards, and negotiate with suppliers

Patagonia’s Mission, objectives, and sourcing alignment

“We’re in business to save our home planet.” The company focuses on both profit and protecting the environment. It uses sustainable materials like organic cotton and recycled polyester, and promotes repair and reuse through Worn Wear.

Patagonia’s Suppliers and common characteristics

sources materials globally, including the Texas Organic Cotton Marketing Cooperative. Its suppliers commonly use sustainable materials, follow fair labor practices, and operate with transparency.

Patagonia’s Certifications and importance

uses certifications like Fair Trade Certified (fair wages and community support) and GOTS (organic and eco-friendly production). These help ensure ethical, sustainable, and responsible sourcing.