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International Journal of Engineering, Science and Technology Vol. 5, No. 2, 2013, pp. 38-48

INTERNATIONAL JOURNAL OF ENGINEERING, SCIENCE AND TECHNOLOGY www.ijest-ng.com www.ajol.info/index.php/ijest 2013 MultiCraft Limited. All rights reserved

Intermediation in agile global fashion supply chains

L. Purvis*, M. M. Naim and D. Towill
*

Cardiff Business School, Cardiff University, UNITED KINGDOM Corresponding Author: e-mail: PurvisL@cardiff.ac.uk, Tel +44-2920-879368

Abstract Previous studies (such as Fung et al., 2007) have revealed that in industries characterized by high degrees of agility, fragmentation and globalization, such as the fashion sector, trade intermediaries play a significant role in integrating geographically dispersed value-chain activities. The typical tasks of an intermediary include sourcing, supplier quality control, shipping management and distribution. However, their ability to reduce costs and compress time along these activities and enhance the level of agility that fashion retailers are ultimately able to exhibit has received little attention in the literature. As a result, this paper explores the role of intermediaries as sourcing agents in agile fashion supply networks in a global context. The methodology employed involves two primary, exploratory case studies of UK based high street fashion retailers. The paper provides empirical evidence to highlight the role of trade intermediaries in increasing supply chain performance along two dimensions: total supply chain lead time and total supply chain costs. Keywords: supply chain management, agility, intermediation, fashion. DOI: http://dx.doi.org/10.4314/ijest.v5i2.3S 1. Introduction Modern fashion is claimed to affect everyone with its ephemera, promoting greater purchasing frequency. Customers now have more choice, are likely to be less loyal, are not prepared to accept second best and have become more sophisticated in their tastes and their approach to buying goods and services (Hines, 2001). In this context, previous studies have shown that as the fashion element of clothing products increases, so their shelf-life decreases (Forza and Vinelli, 2007). Combined with higher demand for more frequent new product introductions, this increases the level of responsiveness that companies operating in this highly volatile environment need to exhibit. In such market conditions featuring increasing levels of product variety and customisation, the ability to respond to customer orders in a timely fashion can provide a critical competitive advantage. Furthermore, as the focus of competition has now shifted from individual companies to supply chains (SC), a single firms ability to be flexible is no longer adequate and all participants of a SC should be considered. As such, aligning New Product Development (NPD) and SCM processes is essential for ensuring success in the market place. Previous studies (Fung et al., 2006) have revealed that in industries with a high degree of fragmentation and globalization, such as textile and clothing, trade intermediaries play a significant role in integrating geographically dispersed value-chain activities. The typical tasks of an intermediary include sourcing, supplier quality control, shipping management and distribution. However, their ability to reduce costs and compress time along these activities and enhance the level of agility that fashion retailers are ultimately able to exhibit has received little attention in the literature. As a result, this paper explores the role of intermediaries as sourcing agents in agile fast fashion supply networks in a global context. Two main research questions are posed: 1. When do fashion retailers use intermediaries for sourcing their products? 2. How do intermediaries add value in the global fashion supply chain management context?

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2. Literature review 2.1. SCM in the fashion industry: As a result of the characteristics of todays fashion markets highlighted in the previous section, high street retailers success is nowadays a function of not only their ability to design products with a high fashion content and monitor demand for these, but also of their ability to manage a flexible and responsive supply chain that allows them to adapt quickly to any changes in demand (see Figure 1). For items with high fashion content, identifying market needs is essential, but given the very short product life cycle, an agile supply chain able to deliver the product in a timely manner is also required. In contrast, efficiency should be pursued when dealing with functional products characterized by long lifecycles and predictable demand.

Figure 1. The Clothing Supply Chain (Source: McMichael et al., 2000) Due to the growing high street retailer concentration in the UK, which increases competitive pressures along price, the industry has been long focusing upon reducing labour costs within garment manufacture, mainly through global sourcing (Jackson and Shaw, 2001; Bruce et al., 2004). Outsourcing to further away regions, however, has also resulted in extensive and complex apparel supply chains, and consequently longer lead times. As such, experts maintain that global supply chains are more difficult to manage than domestic supply chains (Dornier et al., 1998; Wood et al., 2002) and less agile (Jin, 2004). But given the need for speed and responsiveness in the fashion industry, time expansion of the supply chain is not only undesirable, but results in an erosion of competitive advantage. Christopher et al. (2004) furthermore caution that there may exist hidden risks associated with offshore suppliers, such as unstable exchange rates and inflexibility, which can ultimately affect the efficiency and effectiveness of fashion supply chains. Consequently, companies operating in the fashion sector use a combination of local and overseas sources of supply (Masson et al., 2007), which allows them to provide a customised response to the needs of the marketplace. However, this can also dramatically increase the complexity of their supply networks, which might, in turn, affect their speed to market. Jin (2004) notes that in a lean retailing world, agility, the ability to respond quickly to changing customer needs, has become a critical factor in sustaining a competitive advantage. Lean retailing makes manufacturing firms that utilise a global sourcing strategy face the dilemma of balancing the benefits of cost effectiveness with the benefits of agility. That is, by sourcing globally, firms can reduce production costs, but may not be agile enough to meet retailers needs on a timely basis.

Figure 2. Variation in Products Shelf Life Based on Fashion Content (Source: Forza and Vinelli, 1997) Figure 2 illustrates that apparel products have varying levels of fashion content, which will ultimately determine their season length. This will eventually impact on where retailers and, further up the supply chain, their manufacturers and fabric providers,

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will source their products from. At one end, for basic products with longer shelf lives, the physical costs are likely to represent a major part of the total potential costs. Like most of the labour-intensive industries, a natural choice of production venue is the developing or underdeveloped countries, where wages are substantially lower (Sen, 2008). Due to the long replenishment times, Subrahamayan (2000) highlighted that initial orders constitute anywhere between 60% to 100% of the total order in a given basic product category, leading to large inventory holding costs. At the other extreme, for high fashion products with much shorter life cycles and higher market mediation costs, the retailers will seek responsiveness when making their sourcing decisions. This will give domestic manufacturers a huge advantage (Sen, 2008). Furthermore, Kopczak and Johnson (2003) state that in sectors in which product and process technology evolve rapidly and product lives are short, with each new generation of products the components and process technologies that are specified may change dramatically. Christopher et al. (2004) state that retailers have to act these days as network orchestrators, working with a team of actors closely for a while but that will, however, be disbanded and a new one assembled for the next play. As such, in search of the right set of skills and cost saving opportunities, the sourcing network of UK high street clothing retailers now spreads over a large range of countries and regions. Corroborated with the rapidly reconfigurable nature of the clothing supply networks and arms length relationships that characterize the industry (Storey et al., 2005; Barnes and Lea-Greenwood, 2006), this raises the particular issue of complexity in the fashion supply chains and its possibly negative impact on managing the supply network and fostering collaboration and information exchanges between the network players. The literature supports the view that highly complex networks are less responsive and require more resources and effort to synchronise and coordinate activities (Meepetchdee and Shah, 2007). While a larger and more varied supply network may be sought to improve the product range dimensions of agility, this leads to increased structural complexity which is counter to improving supply agility and other aspects of supply performance (Milgate, 2001; Prater et al., 2001). The shift to offshore sourcing, according to Ohmae (1989), is a necessity born from the ongoing need for cost management (Doyle et al., 2006). However, in doing so, the supply chain, while benefiting from advantageous cost structures, becomes increasingly complex to manage, not least in respect of supplier selection, evaluation and management (Vokurka et al., 1996; Cebi and Bayraktar, 2003; Doyle et al., 2006). Prater et al. (2001) highlighted the fact that international supply chains are now complex, dynamic systems that are subject to large time-lags and variability in delivery. Complexity may also arise here from long physical distances. Long distances usually increase transportation and order lead times (Stank, 1999), hinder collaboration and decrease the reliability of demand forecasts (Ho, 1992). This, in turn, increases the uncertainty with respect to production schedules, orders to suppliers, and the likelihood of meeting demand (Swenseth and Buffa, 1991). It also leads to more resources and effort being required in order to synchronise and coordinate activities within the network (Meepetchdee and Shah, 2007). And as greater levels of coordination and more information and business processes for decision making will be required, this also implies higher costs under higher complexity (Meepetchdee and Shah, 2007). Some authors have advocated a range of approaches to solving this issue, for example focusing on reducing supply complexity by restructuring the supply chain (Prater et al., 2001; Hoole, 2005), trying to manage it better (Meijboom, 1999) which might require the implementation of costly coordination mechanisms (Prater et al., 2001), or simply trying to avoid it altogether (Christopher, 2004). However the geographic separation of the supply chain elements, increasingly prevalent in international operations, and the very wide supplier base required may challenge these approaches. It follows that network complexity in this industry presents a series of problems that might impact on supply chain performance, particularly collaboration and communication between the network players. Indeed even before widespread off-shoring in the fashion industry became apparent, studies reported, as highlighted earlier on, that this was already a major issue in the industry. 2.2. The value of intermediaries in SCs: Previous studies (Popp, 2000) identified that in many global apparel supply chains there are one or more intermediaries acting as significant figures, further increasing the complexity of the networks employed. They normally work as agents, bridging retailers in developed nations and manufacturers in developing countries. They may also source fabrics and trimmings for manufacturers and exercise control over an integrated supply chain. Overall, they leverage their knowledge about overseas markets in sourcing and economise costs through supply chain management (Fung et al., 2007). The emergence of additional layers in the supply chains, such as intermediaries, is not a new trend, though, and has been documented as early as Alderson (1954), who identified 4 fundamental reasons as to why it makes sense to introduce an intermediary into a chain of supply: they increase the efficiency of the exchange process by adding time, place and possession utility; enable the adjustment of the discrepancy of assortments by performing the functions of sorting and assorting; act as marketing agents to make possible the routinisation of transactions; facilitate the searching process by consumers and therefore reduce the costs of selling, transportation, inventory carrying, storage, order processing, accounts receivable/bad debts and customer service. However, the subject of intermediation has received little recent attention in the operations and supply chain management literature (for some exceptions see Magretta, 1998; Popp, 2000). Yet, Fung et al. (2007) highlighted that the subject has been much more popular in the economics literature and some of the common research themes are: the changing roles and functions of intermediaries, organisational antecedents of cooperative relationships, their service offerings and their role as an information hub. From the perspective of transaction cost economics, for example, Peng and Ilinitch (1998) argue that exporting indirectly through intermediaries becomes an attractive choice for the producers marketing channel if the transaction costs of direct exports are higher than those of indirect exports. Transaction costs are comprised of search, negotiation, monitoring and enforcement costs

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(Williamson, 1985). In a global context, search costs can be high and even prohibitive for distant, unfamiliar areas. Similarly, high negotiation costs are assumed to apply due to language and cultural barriers. With regard to monitoring and enforcement cost, Peng and Ilinitch (1998) suggest that these costs are comparatively low in industries where products are standardised and have a high commodity market, making indirect exports an attractive option. Their research also revealed that differentiated goods characterised by a low commodity content and high degree of value added, such as high fashion items, are less likely to be traded by an intermediary. As such, two opposing views seem to exist in the literature regarding the effect of environmental uncertainty on intermediated exchange relationships. One view posits that when faced with high uncertainty, firms will coordinate their activities more closely in an attempt to reduce uncertainty (Pfeffer and Salancik, 1978) through direct exchanges and long term partnerships. The other view argues that firms attempt to maximize their flexibility in uncertain environments by reducing their reliance on individual relationships (e.g., Heide 1994) through frequent use of intermediated relationships. However, to date, there are no empirical studies attempting to link the existence of intermediaries in supply chains and the content of their service offerings to the degree of volatility in the market they operate. As such, this paper concentrates on filling this gap. 3. Methodology To investigate the two research questions raised in the previous section, two case studies of UK based specialist fashion retailers were conducted. The case study is a well-recognised methodology for exploring areas where theory is still developing (Yin, 2003), such as that of indirect sourcing in agile supply systems. The UK fashion sector was chosen as the focus of this research, due to its high levels of demand volatility and short product life cycles, which are more likely to require the adoption of highly flexible sourcing strategies. At the same time, the use of intermediated exchange relationships has been previously reported in the literature with regards to intermediaries involvement in sourcing, supplier quality control, shipping management and distribution (Popp, 2000). Euromonitor (2005) classifies the distribution channels for clothing in the UK into specialist (covering independent clothing retailers and clothing multiples) and non-specialist (variety stores, department stores, sports shops, hyper- and super-markets, home shopping companies, street markets and other). Based on reports published by Mintel (2007), the structure of clothing retailing in the UK is one of the most concentrated in the world, with specialist clothing retailers accounting for 68% of the market share. However, independent specialist stores have a share of only 14%, which means that the market is dominated by strong clothing multiples, which have experienced solid sales growth since 1998. Their ability to supply versions of the latest catwalk styles at affordable prices and with the shortest possible lead times is seen as an important point of differentiation that they have in the marketplace (Mintel, 2003) and, as such, formed the focus of the research presented here. A purposive sampling strategy was used to select the case studies for the purpose of this research. The top 10 leading UK specialist clothing multiples in terms of market share were initially approached thorough email (see Table 1). Three of them replied, but one expressed great concerns in terms of time availability for this research and was used as a pilot case study. The pilot study involved one interview with a member of the purchasing team and allowed the researchers to explore the nature of the retailers activities / products in which the intermediaries were used, as opposed to those which did not. The remaining two retailers were used as main case studies, and the case findings will be presented in the following section. Their product offering ranged from functional, low fashion content items with long life cycles and predictable demand to high fashion items with a shelf life of up to 6 weeks and a very volatile demand. The retailers managed an extensive global network of garment manufacturers, textile producers, textile finishers and printers, trim manufacturers, carriers and brokers. Table 1. The top 10 leading UK clothing specialists in terms of UK market share (Source: Mintel, 2005; Verdict, 2005)
Marks & Spencer Arcadia Next Mosaic Fashions* New Look Bhs River Island H&M Monsoon TK Maxx 2004 (%) 9.5 7.3 7.8 3.3 2.7 2 1.3 1.1 1.1 1.5 2005 (%) 9.6 7.5 8.3 3.6 2.9 1.9 1.5 1.1 1.3 1.6

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The major rationale for selecting the two case studies was to gain insight into the sourcing strategies used and the role trading agents played in managing the retailers supply networks. Each case consisted of interviews with managers directly involved in supply chain management decisions, supported by documentary evidence. In total, 12 semi-structured interviews were conducted, totaling over 30 hours. Some examples of the questions asked during the interviews conducted are: Do you use intermediaries in managing your outsourced activities? What product / activities involve the use of intermediaries? What are the specific roles of the intermediary in managing your outsourced activities? Data was further collected through observations and site visits, an industrial workshop and consultation of key documentation and publications related to the two fashion retailers supply networks. The source of qualitative data was considerably rich yielding 200 pages of transcripts from the 30 hours of interviews and further secondary data collection. 4. Findings Based on early interviews with the two retailers, the products they offered were initially grouped based on their shelf life: long (12-18 months), medium (average of 6 months) and short (3-6 weeks). The 2 retailers product offerings were then further explored following the DWV3 model originally introduced by Christopher and Towill (2000) in order to understand their behavior in the market place (see Table 2). Table 2. DWV3 attributes of retailers products Low Fashion Items Mid-Fashion Items (Scenario 1) (Scenarios 2 and 3)
Life cycle Demand predictability (how fast is the swing) Volume Demand predictability (how big is the swing) Variety D W V1 V2 V3 Long Low High Low Low Medium Medium Medium Medium High High Fashion Items (Scenario 4) Short High Low High Medium

Consequentially, the value streams employed for sourcing these products (Table 3) were mapped and will be presented here as Scenario 1 (for long shelf life, low fashion content items), Scenarios 2 and 3 (for medium shelf life items) and Scenario 4 (for short shelf-life, high fashion items). Scenarios 2 and 3 (both referring to mid-fashion items) distinguish between the employment of local UK based sources of supply (a value stream only used by retailer A) and global sources of supply (a scenario used by both retailers interviewed). The four different scenarios cover all products that were offered by the two retailers that participated in this research: Table 3. Supply pipelines employed by the 2 fashion retailers
1.Low Fashion Items Rate of new product introductions Suppliers location Intermediaries used Low China, India, Romania, etc. No 2.Mid Fashion Items (UK Supply) Medium UK No 3.Mid Fashion Items (Global supply) Medium China, Eastern Europe Yes 4.High Fashion Items High Eastern Europe, Turkey Yes

Scenario 1: Low Fashion Items (shelf life of 6 months to 2 years) - served by supply networks employing close, stable relationships with global suppliers; Scenarios 2 and 3: Mid Fashion Items (shelf life of 3 to 6 months) two different sourcing scenarios were encountered here: o Scenario 2: A small minority of items (offered by Retailer A) was served by flexible UK-based suppliers with which strong partnerships existed;

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Scenario 3: Items (offered by both Retailer A and retailer B) were served by rapidly reconfigurable networks employing ad-hoc, short term relationships with overseas garment manufacturers; Scenario 4: High Fashion Items (shelf life of up to 6 weeks) served by rapidly reconfigurable global networks, required high levels of flexibility from the garment manufacturers employed. Within these four different scenarios, the roles played by trading agents were further investigated. 4.1. Scenario 1 - Low fashion items: The demand for these low fashion content, functional products, such as black tights or white T-shirts, was stable and predictable for both retailers. These products had a long life cycle (6 months up to 2 years, and sometimes longer) and the design alterations were rare from one season to another. The volumes sold per SKU were high, the range variety was low and they mainly competed in the market place based on cost. Stable networks with collaborative partnerships were employed and this led to the creation of typically lean supply chains focused on cost minimisation. Sourcing was committed up to one year in advance, and the search for low labour costs meant that global suppliers were always used. Production of these items would be placed in a mix of countries with various strengths, such as very low labour costs (Vietnam and the Philipines), high quality (China) or more favourable trade agreements (Eastern Europe). No trading agents were employed in these pipelines, as retailers preferred to source directly from the global suppliers with which they had long, stable partnerships with. o 4.2. Scenario 2 - Mid fashion items (UK supply):This sourcing strategy was employed by retailer A for a small proportion of their knitwear range. These were seasonal products with a higher fashion content, which attracted higher profit margins. They were technically complex products which were woven in one single piece by a capital-intensive UK based garment manufacturer. The products life cycle would average 6 months (one season), after which the line would be discontinued and any left-over stock would be marked down, incurring significant losses. A wide choice of product designs, colors and sizes was made available, which diluted demand across the product range and increased the need for smaller, more frequent deliveries. Time compression and efficiency were mainly achieved through greater sharing of information and integrated logistics systems. No intermediaries were used in this pipeline. 4.3. Scenario 3 - Mid-fashion items (Global supply):The majority of the two retailers product range was mainly made up of woven products, the manufacturing of which was a much more labour intensive process. These would be designed up to 6 months before each season would be due to start, once information from designers, fashion shows and trend annalists would be gathered. The 6 months design cycle was dictated mainly by the long lead times imposed by the fabric suppliers. With an increasing number of new products introduced each season and reduced volumes per SKU, the pool of skills required for clothing manufacturing was becoming increasingly complex, requiring a larger network of suppliers every season. And due to the high UK labour costs, combined with reduced local capacity availability, the supply networks used were exclusively global in nature. The apparel suppliers used were characterised by high labour intensity, small average plant size and relatively unsophisticated technology used. On average, over 300 garment manufacturers would be used by each retailer each season. In order to reduce the complexities associated with global sourcing and the continuous need to restructure the supply network, the common norm for sourcing these items was to make use of indirect sourcing through intermediaries. The intermediaries had access to large local suppliers networks in the area they were serving, which allowed for the rapid identification and utilisation of spare manufacturing capacity (see Figure 3).

Before:

After:

Retailer

Intermediary

Apparel supplier

Textile supplier

Figure 3. Supply chain structures before and after the use of intermediaries In these networks, direct sourcing through the establishment of long-term partnerships with a small number of more flexible suppliers was perceived as likely to reduce the retailers market-orientation capabilities to flexibly and responsively cater for a

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diverse, fast moving fashion market. The intermediaries strategy of not owning any production facilities kept the supply chain flexible and adaptable, encouraging the constant search for flexible, quality-conscious and cost-effective producers. The information and material flows across these supply pipelines is illustrated in Figure 4. The intermediaries were engaged in all phases of apparel manufacturing, assisting the fashion suppliers in both the design and new product development stage, as well as the design and management of the supply systems necessary to bring these new products to the marketplace: raw materials sourcing, apparel manufacturing and distribution of the finished goods. Fabric and trims were also sourced through the intermediaries, with raw materials delivered straight to the manufacturers facilities.

Figure 4. Global sourcing through trade intermediaries 4.3.1. The Lohn model: An alternative sourcing model (the Lohn model) was identified in the pipelines used to source midfashion items from some of the Eastern European suppliers. In these pipelines, the intermediary would source all the raw materials required for the manufacture of a particular product, coordinate their arrival to its own warehouse and then organise their delivery as a bundle to the manufacturers facility (Figure 5). This process was mainly employed when the raw materials required were manufactured in a different county than that in which the garment manufacturer operated and the apparel supplier lacked both the operational and financial ability to engage in global sourcing. This sourcing model increased the flexibility of the total supply pipeline while making use of low cost suppliers with limited capabilities.

Figure 5. The Lohn Model 4.4. Scenario 4 - High fashion items: The retailers seasonal product range offer also allowed for quick new product introductions designed as a response to shifts in popular culture and creating significant demand for a fashion style or trend. For these high fashion items with very short shelf lives (averaging 3 to 6 weeks), forecasts were impossible to be made. As a result, the 2 retailers had to be extremely agile in capturing emerging trends, designing new products and quickly bringing them to the market. As such, lead-time reduction was key to the fashion retailers success. Even for these items, with a much shorter shelf life, the retailers preferred global sourcing to local producers. Some of the reasons quoted for this were the lack of skilled manufacturers in the UK, the reduced local availability of fabrics and trims, high labour costs and very limited capacity still available. Eastern Europe and North Africa were the preferred sources of supply, mainly due to their proximity to the UK. To minimise the risk of obsolescence, small volume deliveries were required on a frequent basis. This required a high level of volume flexibility from the

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supply network and increased the need for dynamic capacity management, including the ability to add or reduce capacity at an existing facility, add or eliminate facilities, or source additional capacity at very short notice. The same sourcing practice of auctioning out production through trade intermediaries was used, allowing for the quick redesign of the supply chain on an ad-hoc basis. 5. Discussion and Conclusions 5.1. Indirect sourcing and the globalisation of fashion SCs: Previous studies have highlighted that in global supply chains lower degrees of flexibility can be expected, mainly due to a firm's inability to transfer production from one plant to another and its inability to successfully respond when capacity is constrained (Radjou, 2002). However, in response to the first research question we aimed to address, our case study findings reveal that retailers in the fashion industry still mainly make use of global sourcing but strive to limit interdependence and retain the ability to easily switch partners for products requiring an agile response to market. This flexibility will result in a more intensive capacity utilization resulted from industry-wide sharing, higher risk alleviation capabilities and higher levels of customer sensitivity. Achieving this level of responsiveness in a global environment, however, was only made possible through the use of intermediaries, who assisted the retailers in sourcing, supplier quality control, shipping management and distribution. They had detailed local knowledge of financial, managerial and technical capabilities of individual manufacturers in the area they were serving, as well as spare capacity available at very short notice. This knowledge helped to integrate a highly segmented production structure and accelerate the pace of production. At the same time, through the employment of intermediaries the retailers ability to coordinate inter-firm scale and scope economies was greatly enhanced. The concern was to achieve both economies when orders tended to be small and frequent changes in design (Hsing, 1999). As such, through intermediaries consolidating orders from different customers before placing them with a specialised manufacturer, as well as consolidating orders placed with different manufacturers before shipping finalised products to the UK, significant cost savings were achieved. From a transaction cost economics perspective, our results show that intermediaries were more knowledgeable about the foreign markets (lowering retailers search costs), had superior negotiating capabilities (lowering their negotiating costs) and were used for supplier quality control and to take title of the goods produced (lowering the retailers monitoring and enforcement costs). However, for items with lower levels of demand variability which were produced in large volumes, as well as those items produced in the UK, direct sourcing and long term partnerships were employed without making use of trading agents. This confirms findings from previous studies (Shin, 1989, Klein et al, 1990) which highlighted that the value-added contribution of the intermediary will be correlated with the uncertainty or risk inherent in the particular exchange setting. 5.2. Indirect sourcing and time compression in fashion SCs: To enable a quick response to rapid changes in market trends, fashion retailers needed suppliers with the capability to manufacture the product required, but who were also able to provide the logistical know-how to find all the parts needed for the finished product and then deliver it to the UK. Thus, they required more advanced full-package companies (intermediaries) who, in turn, may subcontract out these orders to other local firms. The product development process, for example, was the point at which the retailer would be able to address a number of factors, such as the choice of fabrics and trims, flexibility of delivery system required in order to match consumer demands, the size of batches to be processed to reduce risks, ways of bringing design and coloring decisions closer to the point of sale, ways of reducing the total cost impact of product development. Intermediaries would offer to the fashion retailers assistance in bringing people with different areas of expertise together, including representatives from the retailer, the clothing manufacturer, the textile supplier, the dyer/printer and the yarn and fiber manufacturers. They would also source raw materials on behalf of the retailer and arrange delivery of the finished product to the retailers UK based distribution centers. This led to shorter new product development processes, increased delivery speed and greater confidence in delivery reliability, all critical aspects for increased competitiveness in the sector. As such, the intermediaries ability to manage effectively their linkages with upstream suppliers and downstream customers through the integration of key business processes distributed among a network of independent actors accelerated time to market and was their main source of competitive advantage. The use of intermediaries also gave retailers increased visibility further upstream the supply pipelines, as well as opening-up markets for local suppliers. 5.3. Indirect sourcing and complexity in fashion SCs: The literature review has highlighted the fact that while benefiting from advantageous cost structures, global supply chains can also become increasingly complex to manage, not least in respect of longer distances and supplier selection, evaluation and management processes (Vokurka et al., 1996; Doyle et al., 2006). Corroborated with high levels of innovation, dependent on high levels of supply flexibility, our findings have highlighted that most of these challenges were greatly reduced through the employment of trade intermediaries. However, products with more stable demand allowed for long-term agreements and trust based relationships to develop through direct sourcing. With regard to the number of actors in the chain, the literature also supports the view that while a larger and more varied supply network may be sought to improve the product range dimension of agility, this increases network complexity which is counter to improving agility (Milgate, 2001; Prater et al., 2001). However, our findings reveal that through indirect sourcing retailers benefited from more stable relationships with the few intermediaries used on a regular basis, rather than the loose relationships that

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they previously had with the myriad of suppliers used on an on-off basis (see Figure 3). However, the intermediaries main source of competitive advantage stemmed from the knowledge gap separating potential buyers and suppliers (Nayyar, 1990). Information asymmetries existed between buyers and sellers in these networks, which the intermediary was able to exploit. In time this would possibly diminish, but to reduce the risk of being by-passed by the retailers, the intermediaries were engaging in relation-specific investments that created higher exit barriers for their clients. As such, in addressing research question 2, our case studies reveal that trade intermediaries played a significant role in increasing supply chain performance along two dimensions: reducing total supply chain lead time and reducing total supply chain costs. To conclude, our paper shows that the global, flexible and responsive supply chain is not an unattainable goal. Instead, it is becoming a necessity as customers become more demanding in terms of both service and cost. This, however, has led to the retailers replacing the extant linear supply chain relationship model that dominates most sectors (Ritchie and Brindley, 2000) with a more amorphous supply network model. In essence, fashion retailers recognized that overseas intermediaries are better equipped to manage all aspects of the sourcing, production and delivery process when high levels of responsiveness and an ability to build flexible alliances at short notice are required, while only engaging in direct sourcing for products with more stable demand profiles. This, however, can also restrict their competitive edge, which is now focused towards the management of activities further downstream the supply chain, such as retailing, UK distribution and branding and increases their dependence on the use of global intermediaries. In long term, this could encourage opportunistic behavior. Further studies, however, are necessary in order to investigate the complex interactions that can arise between different types / levels of supply chain uncertainty and the involvement of intermediaries in the different market(s) they operate in. Additional studies would also benefit from addressing the extent to which intermediated relationships could facilitate higher levels of flexibility in supply chains (such as new product, delivery and access), as well as the trade-offs involved when managing intermediated relationships. Quantifying the impact of intermediated relationships on firm performance and total supply chain cost, as well as the long term sustainability of the sourcing systems presented in this paper would also benefit from further investigations. Furthermore, like many case-based studies, limitations such as the small sample size, contextual bias and subjective criterion for some of the variables considered have to be noted. 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Biographical notes L. Purvis, M.M. Naim and D. Towill are all with the Cardiff Business School, Cardiff University, United Kingdom

Received October 2012 Accepted October 2012 Final acceptance in revised form November 2012