Integration in loosely coupled garment supply chains: The case of a Mexican trader as switchboard operator
Journal article, Peer reviewed
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Original versionJournal of Global Operations and Strategic Sourcing. 2018, 11 (3), 357-383. 10.1108/JGOSS-10-2017-0042
Purpose This paper aims to deliberate about the problem of tight and seamless integration in a supply chain by conceptualising and understanding how looseness and its creation represent an effective supply chain design. Design/methodology/approach This research is grounded in system theory and industrial network research, while the case study of a textile and garment supply network coordinated by a third party in Mexico empirically illustrates how looseness in the supply chain may be created. The information gathered through in-depth interviews with critical informants at Aztex and three of their suppliers, visits in situ and secondary information, was organised with the template analysis technique and interpreted from three different but complementary perspectives, system theory, supply chain coordination modes and industrial networks, to establish the particularities of the triad model. Findings The study shows that supply chain integration may take place in a variety of forms, and that new theoretical perspectives are required to understand how the looseness in the connections among actors contributes to the flexibility and efficiency of the chain. Additionally, the analysis of the case puts forward the trader’s crucial role as linking pin between suppliers and customers in the specific context of the garment sector. Research limitations/implications Additional cases and triangulation of information from traders, suppliers and customers would contribute to explore in more detail how integration takes place not only in the textile and garment industry sector but also in other industries. Practical implications A rational explanation of why establish full integration across several tiers of suppliers and customers is too difficult to attain is given to managers. They may recognise that tight couplings will be necessary and possible only with strategic counterparts; meanwhile, others are more suitable to be delegated to a third party. Social implications The economic and industrial stability and progress of low-cost sourcing countries depends on the selection of international purchasers. The advancement of triangle manufacturing facilitated by a trader may become another criterion to drive the selection towards a region. In the case of Mexico, this adds to the near sourcing advantages of the country. Originality/value The research confirms that there is no unique global mode of supplier integration and suggests that different approaches are viable as long as the objectives of operational efficiency, good customer service and flexibility are satisfied.