Apparel brands and retailers have experienced a steady increase in production costs over the past couple of years. That combined with bigger competition and slowed growth, has added to the pressure to improve margin performance. As a result, businesses must analyze their sourcing strategy to find the most effective ways to keep costs down.
The struggle to keep up has businesses focused on the wrong thing – cutting costs by squeezing out suppliers. Although you may get a few cents out of suppliers, in the grand scheme of things, this kind of cost-reduction won’t have a substantial impact on overall cost, especially when goods are being marked down at an all-time high.
Instead, retailers and brands need to evaluate their sourcing strategy – four elements in particular - to find ways to not only cut costs, but meet the demand for shorter lead times. In this blog, we’ll take a look at the four key elements shared by John Cheh, CEO of Esquel Group, in a recent Sourcing Journal article, and find out how they impact your overall supply chain program.