Strategic Procurement in Textile Industry

This article discusses the various risks involved in designing supply chains in the textile industry, such as demand and supply lead times, quality issues, inventory management, outsourcing risks, loss of control, hidden costs, confidentiality of information, customer expectations, and delay in production. It also suggests that strategic procurement can help organisations plan their supply chain designs in an appropriate manner.

STRATEGIC PROCUREMENT IN TEXTILE INDUSTRY
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Introduction
Supply chain design management provides strategic benefits to the organisation (Trkman &
McCormack, 2009). The key to today’s global fast moving and rapidly expanding organisations
is in enhancing effectiveness of their supply chain. Especially the textile industry has become
fast moving and dynamic where competency is determined by capability of a firm to react to
market choices. Varied supply chains implement diversified strategies in order to gain
competitiveness in the market. Procurement in supply chain is complex and initiates the process,
hence strategic procurement can enable organisation to overview the procurement strategy with
the overall business strategy (Christopher, Mena, Khan & Yurt, 2011). The scope of the current
discussion encompasses various risks in designing supply chains, which can help implement a
successful strategic procurement.
Analysis
Supply chain designs are dynamic framework that allows organisations procure raw materials
and produce finished products to meet final consumer demands. In textile industry which has
become fast changing, supply chain has to be able to react quickly such that it can meet
consumer demands (Zsidisin & Ritchie, 2009). Thus, all possible risks in supply chain designs
have to be identified and catered to. Some of the integral risks have been highlighted below;
 Risks in demand and supply lead times: Lead time is the amount of time that lapses
between commencement and end of a process. Streamlining of operations significantly
reduces lead times and affects inventory. In case organisations are unable to match up
demand and supply lead times, then there might be wastage of raw material and
significant delay in final products from reaching the market (Simchi-Levi, Kaminsky,
Simchi-Levi & Shankar, 2008). Any delay in supply or demand lead times might impact
supply chain designs and create considerable amounts of risks for the supply chain
designs.
 Quality Issues: Organisations across the textile industry need to maintain appropriate
quality of raw materials and that of finished products. Quality checks such as monitoring
and control plays an integral role in final consumers accepting the product and the brand
name. Disparity in quality might hamper supply chain designs, where organisations need
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to reframe such designs. Various organisations implements Six Sigma processes in order
to control their quality standards in raw materials as well as in finished products.
 Inventory Management or stock over risks: Every organisation need to anticipate
demands and maintain adequate quantities of raw materials or stock of items. In case of
stock pile up or lack of stocks might create significant amounts of risks for the entire
supply chain designs. In lack of stock, other processes of the supply chain will come to
halt and in case of stock overflow, there might not be present end customers ready to
accept the product. Stock over can impose considerable amounts of risks and might
dampen the overall reactiveness of the supply chain. Outsourcing Risks: In case of outsourcing supply chains, organisations need to take
adequate care to ensure that appropriate standards of quality is maintained (Sodhi &
Tang, 2012). An effective and efficient quality control technique ensures that outsourcing
is beneficial. In absence of quality checks, outsourcing might impose considerable
amounts of risks to the entire supply chain design leading to its failure. Other challenges
related to outsourcing include incapability to deliver at the right time and so on.
 Loss of Control: An organisation needs to have adequate control over its supply chain
processes. In case the organisation fails to have control over one or any of its processes, it
might impend huge costs for the organisation. This might lead to ineffectiveness of its
processes. As in case an organisation losing control over its inventory might have
significant impacts on its overall effectiveness to maintain adequate costs. Hidden Costs: Supply chain designs cannot have any kind of hidden costs. In presence of
any hidden costs, the efficacy of the supply chain designs might be lost. The core aim of
the supply chain design is to maintain profitability and efficiency of the organisation. In
absence of the same, the entire objective of having a supply chain might be deterred. Confidentiality of Information: Supply chain needs to maintain confidentiality in
information. Confidentiality related to supplier data, finance and accounts related
information and so on. In absence of an organisation’s capability to maintain
confidentiality it might fail to maintain long-term relationship with its customers. Customer Expectations: Supply chain designs include processes which meets customer
expectations (Sodhi & Tang, 2012). In case supply chain inefficiency arises, there might
be challenges relative to customer’s demand being not fulfilled. In such case the
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organisation might lose out on its brand name and customers might be unwilling to
repurchase product of the same brand. Delay in Production: Any delay in production might significantly impact supply chain
designs. Delaying production might hamper the next process of carrying products to
distributors and meeting customer demands. Therefore, any delay in production might
disrupt the entire process of supply chain designs leading to its complete failure.
Conclusion
Analysis of the above challenges in supply chain design which affects demand and supply lead
times reveals considerable amounts of problems. While some issues can be attended, others pose
considerable amounts of problems. Thus, supply chain designs need to be dynamic in nature such
that they can respond consumer demands and in managing demand and supply risks. In order to
overcome most challenges, organisation’s can make use of in-house integrated supply chain
planning. Organisation’s can also apply outsourcing strategy such that they are able to gain
considerable efficiency in supply chain. Strategic procurement can also allow organisations plan
their process of supply chain designs in an appropriate manner. Strategic partnering with
suppliers and distributors will enable companies to become competitive.
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Reference Lists
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