The paper "Supply Chain Principles" is a perfect example of a business assignment. The primary motivation of the research conducted by Kam, Chen and Wilding (2011) was to find how production outsourcing risks were managed by apparel retailers in China. The study specifically investigated whether guanxi – a Chinese concept that stresses the need for mutuality in relationships – is invoked in managing apparel production risks. In their research, Kam et al. (2011) acknowledge that most retailers need to develop long-term relationships with the apparel manufacturers that they outsource production to.
The foregoing is supported elsewhere in literature by Lin et al. (2007) and Kumar and Arbi (2008). Kam et al. (2011) note the important role that consumer value has in determining the approach that an apparel retailer takes in the management of outsourcing risk. *** defines customer value as the contribution that a company makes to its customers. Customer value depends on all offering made by a company to its customers including the tangible products and the intangibles (e. g. services). Kam et al. (2011) further note that guanxi is not always applicable in the selection of manufacturers; something that the authors indicate could be a result of cultural conflict between retailers’ own culture and the predominant culture in China.
Kam et al. (2011) specifically note that business relationships in the western cultures are determined by other values that are impersonal and economically beneficial. The main argument that Kam et al. (2011) put forward was that the strategies that apparel retailers use to manage outsourcing risks mainly depend on their perception of value in relation to their customers. Specifically, Kam et al.
(2011) indicate that retailers linked product values to product characteristics (e. g. fashion apparel items or basic apparel items), and the market environment (e. g. whether the market requires fast or moderately slow lead times). Kam et al. (2011) further indicate that the value apparel retailers placed on the products they dealt with determined the selection process through which they identified the manufacturers they could outsource the production to. In the basic apparel items for example, Kam et al. (2011) argue that the Chinese guanxi was not evident, mainly because retailers needed to work with manufacturers whose quality, speed, and technology was assured.
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