supply chain

Thanks to the 1995 North American Free Trade Agreement (NAFTA), lots of US underwear manufacturers decided to move production to Latin America.

Higher logistical costs more than offset the savings in production costs. Shipping costs were higher, and communications lines were extended and unreliable.

Several US companies have filed for bankruptcy protection, mainly as a result of these operational problems.  They include Fruit of the Loom, as well as Ithaca Industries and Beltex.

Not all underwear companies have suffered though.  Sara Lee outsourced, while Stone Apparel spent $1million on a system that wires its retail customers through to factories in the Caribbean. Stone Apparel reports sales up 40% to $60million, partly attributed to this system.
 

Value Nets

veryard projects > component-based business > supply chain > value nets