ANNUAL PREVIEW: Want More Profits? Score Your Supply Chain

By Jim.Robinson|January 26, 2012

By Wally Darneille, CEO, Plains Cotton Cooperative Association (PCCA)

The volatility in cotton prices over the last three years should have taught everyone involved in cotton, textiles and apparel a very important lesson: namely, that understanding, managing and scoring the supply chain accurately is critical to the survival and profitability of every business.

Far too often, sourcing decisions have been made based on only one dimension – nominal price, or “first cost.” But price becomes meaningless if the delivery is not made. A common refrain in 2011 was that the brand or retailer couldn’t get delivery of the garment, because the contractor couldn’t get the fabric, because the weaver or knitter didn’t get the yarn from the spinner, who didn’t get the cotton from his supplier.

There are multiple factors involved in making sourcing decisions, and they are interactive. While sourcing decisions are different for each region, product and company, there are some common rules that should be followed. Sourcing executives should make informed decisions after carefully considering all of the factors, the component parameters of those factors, and the way they interact with each other. This article offers a “Sourcing Scoreboard” for making informed decisions about scoring the supply chain accurately.

You can read the rest of this article and dozens of others when the 2012 Cotton International Annual Edition is published. Be sure to watch for it in your mailbox in February 2012!