Global Value Chain for Apparel Sold at Target

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Author: Sheng Lu

Professor @ University of Delaware

3 thoughts on “Global Value Chain for Apparel Sold at Target”

  1. Target claims “70% of the value of imported apparel is created in the United States” and I agree.

    Even though a low-skilled foreign factory worker sews Target’s apparel, Target clarifies that it does not imply the value of their product lays within the factory worker’s hands. A relatively simple shirt that Target produces is more than what meets the eye. The important decisions made by Target’s high-skilled employees are the reason why consumers can purchase said shirt. Bringing manufacturing back to American would be harder said than done. Due to globalizations, we cannot just bring manufacturing back to the US; we have become too exposed and opened Pandora’s box to the world.

    Within Target’s design and development team itself, there is an umbrella of highly skilled specialists who work towards creating the best-valued product—such as the: product development team, buyers, designers, fabric engineers and fabric sourcing, technical designers, apparel designers, product safety team and quality assurance. All of these positions require dozens of employees to work as a team to make it through the various steps of production. It is a minimum of six months of product development before the sourcing and production step begins and then the factory workers will begin their share of work for the production process. However, just because a garment has been sewn together and is now a tangible item for a consumer to purchase, it does not mean the lifecycle is complete and will be found in Target stores tomorrow.

    What most people do not know is the products must go through transportation and distribution approval before being delivered at a Target location. Next, comes the store’s role in merchandise flow, backroom organization, and presentation of the products on the sales floor and much more to run a store effectively. Keep in mind; while the production process is following the necessary steps—there are a multitude of other jobs that must be completed on a corporate level, such as branding, marketing, placement and selling.

    In todays world, the global economy works together to produce all the clothing we wear, hence the impact of globalization, and the global economy. Would the world consider off-shoring a loss to America, if Americans understood how it affects the world and helps struggling countries?

  2. I find it interesting that Target claims that “70% of the value of imported apparel is created in the United States” but most of that value created is through high level positions.
    It is understandable that Target advertises that their high level position employees create the value of their clothing while not forgetting about their lower positioned workers. But I think that more than 30% of apparels’ value should be attributed to the lower positioned workers. They are the ones that are creating the garment physically after all. They do the manual labor and are highly skilled but poorly employed to do so. The big shots create the concept for the garments and then make sure they are made as cheaply as possible to make the most profit from them. This becomes an unfair disadvantage to the people actually making the physical garment. They are forced to work in mostly poor conditions with very little pay to do what they are doing.
    I think that we as the future high positioned employees at companies who will be making decisions about what apparel a company produces and how that company produces it should start to think about these lower positioned workers as people instead of garment makers. They work hard to produce the clothing that we will be telling them to make someday and that can’t be forgotten about. I know the world can’t be changed overnight but I think that if we as the future all come together to create the change in our industry, someday people will be saying that “50% of the value of imported apparel is created in the United States and 50% is created by our workers overseas”.

    1. This is a very great point! A recent study also shows that almost 70% of the value of an imported clothing stay in the United States, contributed by functions like design, product development, branding, marketing and retailing: http://tppapparelcoalition.org/uploads/021313_Moongate_Assoc_Global_Value_Chain_Report.pdf

      You see, while from the function perspective, each process alongside the apparel supply chain can be equally important (e.g., textile manufacturing vs. apparel assembly), the added value created by each process is often not (for example, the added value contributed by a designer vs. an assembly worker). Behind this pheromone involves many factors, such as the demand and supply in the job market.

      On the other hand, I am with you that the distribution of gains of globalization should become more equal. Later in the course, we will have more in-depth discussions on these topics.

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