Cotton Product Global Sourcing – Traceability and Transparency

New Teaching Module in AMDT 413 Global Sourcing

A series of new lectures were developed to cover the following topics: cotton economics; major cotton products in the U.S. and global markets; major cotton product suppliers in the U.S. and global markets, and traceability and transparency of global cotton product sourcing.  Two in-class activities added are 1. identifying and analyzing major cotton products in the U.S. and global markets, and 2. identifying and analyzing major cotton product suppliers in the U.S. and global markets.  Assignments included are 1. analysis of the value of cotton traceability for achieving sustainability goal, and 2. application of cotton treatability data in cotton product sourcing process.

A semester-long group project was developed for sourcing sustainable cotton products for the U.S. market using a cotton traceability framework.  Each group, consisting of 5 to 6 students, analyzed the attractiveness of two major cotton product supplying countries as potential sourcing platforms in terms of political factors, economic factors, social factors and cotton product traceability (P.E.S.T.).  Each group submitted a comprehensive P.E.S.T. analysis report and orally presented their findings at the end of this semester.

The achieved student learning outcomes include 1. understood cotton economic impacts; 2. comprehended the importance of traceability and transparency for sourcing sustainable cotton products; 3. analyzed the trends of major cotton products and suppliers; and 4. understood and applied the best practices and traceability in sourcing cotton products using the information from CottonWorks.com and the Cotton LEADS™ program.

Project Guidelines

Evaluating the Countries’ Attractiveness as

Potential Sourcing Platforms for Cotton Apparel Products

This is a global sourcing research project.  Your group is the newly appointed research team working with the Vice President in Sourcing for an emerging cotton apparel company.  The company is seeking to internationalize its operations as domestic cost pressures cut into manufacturing margins (the reason to explore outsourcing opportunities).

The company has identified TWO high-potential supplying countries (e.g., China and Mexico) to do business with (see your country assignments).  Your group needs to fulfill the following tasks in a structured analysis.

1. Position your cotton apparel product first
   • Your company business strategy
     • Cost focused, Quality/Style focused or Both
     • Include corporate social and environmental responsibility [sustainable business] consideration
     • Detailed description of your products Product Type [check on U.S. Office of Textiles and Apparel (OTEXA) database ]
     • Product characteristics (e.g., underwear, shirts, outdoor sportswear)
   • Target market (i.e., who will buy your products; their characteristics)
   • Price range
2. Identify public domain resources that provide recent and credible information which will support international sourcing decision-making process, for each of these TWO
   • e.g., CottonWorks; Cotton Leads, Cotton Inc. etc.
   • CIA World Factbook etc.
3.  Assess and compare the relative attractiveness of your designated countries as sourcing platforms, for your products.
   • The assessment and comparison should be developed especially for your cotton apparel products
   • The assessment and comparison should be based on the detailed Political, Economic, Social, and Traceability (P.E.S.T.) analysis.
   • Each of P.E.S.T. is multifaceted.
     • Political factor analysis
       • Political stability of the country
       • International trade relationship with USA
         • Is WTO member country (NTR with U.S.A.?)
         • Has it signed free/preferential trade agreement with U.S.A.?)
       • Government attitude and support towards apparel export
         • Is there policy to support export?
       • Corruption level
         • Does the country have a severe corruption problem? (corruption adds the cost and difficulty in sourcing from the country)
       • Summary
     • Economic factor analysis
       • Economic growth (GDP, GDP growth rate)
         • Show the country’s economic condition
       • Exchange rates (stable? Appreciating/depreciating vs. US dollar; What is the effect of currency appreciation/depreciation on your product sourcing from the country?)
       • Financial system/infrastructure (banking system, is it convenient to do business with the country?)
       • Transportation system/infrastructure (airports, seaports, highway; cost)
       • International trade performance
       • Summary
     • Social factor analysis
       • Demographics (e.g., labor supply in terms of age, ethnicity, location, gender etc.)
       • Income level (this reflects labor cost)
       • Labor standards and laws
       • Attitudes toward work and leisure (this reflects the type of workers)
       • Culture & religion
       • Summary
     • Cotton Product Traceability Analysis
       • Cotton Leads Program
       • Cotton Traceability under Cotton Leads Program
       • Cotton Traceability offers your company a reliable cotton product sustainable sourcing solution and confidence that cotton used in your apparel is responsibly produced and identified
       • Cotton Traceability in regards to the countries where you plan to source your products
       • Summary
4. Based on the assessment and comparison, the group should develop a scoring system (1-5 Likert Scale, 1= very unattractive, 5= very attractive. Every analyzed factor in each category is scored) to arrive at a conclusion of attractiveness by category (P.E.S.T.) and overall for each country.
5. Project Conclusions and Sourcing Recommendation

Example Report