The optimal quantity of quick response manufacturing for an onshore and offshore sourcing model

Roger D.H. Warburton · Roy Stratton

28 citations0/0 files storedInternational Journal of Logistics Research and Applications

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Supply Chain and Inventory Management Quality and Supply Management Sustainable Supply Chain Management

Abstract

Consumer demand for innovative and fashion products is highly unpredictable, but could be fulfilled through quick response manufacturing (QRM). However, the extra cost is usually considered to be a barrier to such an approach. The newsvendor algorithm is applied to demonstrate that a strategic combination of onshore and offshore manufacturing can be more profitable than a 100% offshore approach, highlighting the growing importance of a cost versus response trade-off. The optimal split between onshore and offshore manufacturing is calculated. We discuss the successful application of the QRM model in two practical cases: quick response manufacturing for athletic wear; and onshore garment dyeing versus offshore yarn dyeing. In the right context, QRM is a viable and profitable option. Issues in the practical application of the model are discussed.

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References

1998Toyota production system: beyond large-scale production 1997What is the Right Supply Chain for Your Product 1994Manufacturing Strategy : Text and Cases 1996Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales 1997Modelling the Costs and Benefits of Delayed Product Differentiation 1994Making supply meet demand in an uncertain world 2001Measuring agile capabilities in the supply chain 2001A review of agile manufacturing systems

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