Chapter 1 - Intro to Global Sourcing
What percentage of apparel sold in today’s U.S. marketplace is produced outside the United States?
What is 90%?
This theory says a country should produce goods in which it has the lowest opportunity cost.
What is comparative advantage?
The global trade in textiles and apparel exceeds $_________ annually.
What is $800 billion annually?
What is CMT (Cut, Make, Trim) sourcing?
In this sourcing option, a company provides design and materials but contracts only for labor.
This is the first core step in the global sourcing process.
What is new product development?
The PESTS analysis framework stands for________________.
Political, Economic, Social, Technological, Sustainability
Companies choose this practice to access lower costs, improve product variety, or add supply flexibility.
What is global sourcing?
This economic law states that prices are determined by the relationship between how much buyers want something and how much is available.
What is the Law of Supply and Demand?
This government system is used to classify businesses by their industry sector in North America.
What is NAICS (North American Industry Classification System)?
This model has the supplier supply materials, cut and sew the garment, and deliver the finished product—requiring little involvement from the buyer.
What is full-package sourcing?
This U.S. system classifies garments for duty rates using a 10-digit code.
What is the Harmonized Tariff Schedule of the United States (HTSUS)?
Tariffs imposed by a government will directly impact this aspect of imported goods.
What is cost (or price)?
The process of dividing manufacturing steps among different countries to optimize efficiency and cost.
What is fragmentation?
This approach to global sourcing emphasizes long-term responsibility for people, planet, and profit.
What is moral responsibility (or sustainable/ethical sourcing)?
A __________ transforms raw materials into finished products, playing a pivotal role in the supply chain.
What is a Manufacturer?
A sourcing partnership where two firms share investment and responsibility in a new market.
What is a joint venture?
Information on this allows sustainable sourcing to be built into initial product and supplier decisions.
What is sustainability (or environmental and social impact)?
These agreements are designed to decrease or eliminate tariffs and quotas between countries.
What are Free Trade Agreements (FTAs)?
This supply chain concept is broader than sourcing and includes all steps from raw material to finished product.
What is supply chain management?
This theory describes how global production steps are spread across multiple countries.
What is fragmentation theory?
Patagonia is an example of a _________, that directly sells finished goods to consumers, connecting the production side with end-users in the market.
What is a retailer?
This sourcing option gives full control but higher responsibility for quality, cost, and logistics.
What is direct sourcing?
A team review before production that examines cost, design, and selling potential used by many brands.
What is a line review?
A strike or major change in labor laws in a supplier country is an example of this PESTS factor.
What is the political factor?
These are the three pillars of sustainability considered in global sourcing.
What are economic, social, and environmental factors?
This theory suggests companies need to consider their dependence on others for resources and may try to reduce that dependence through sourcing choices.
What is resource dependence theory?
The shift from domestic production to importing large amounts of textiles/apparel began in this decade for the U.S. market.
What are the 1960s?
These are the five major criteria for a make-or-buy decision in sourcing.
What are cost minimization, profit maximization, capabilities, risk reduction, and sustainability?
Bringing this group into the development process early can improve cost, compliance, and quality.
What is the sourcing/purchasing (or cross-functional) team?
These three macro factors are especially important for evaluating a country's risk of supply chain disruption.
What are political, economic, and sustainability factors?