Apparel Value Chain Comparison Between Kenya and Honduras

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AFRICA
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CHINA AND INDIA
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S NEW ECONOMIC FRONTIER
Today, the increased competitive pressures in the global apparel market call for significant upgrading of Africa’s apparel industry. Much as in Africa’s agricultural sector, suppliers striving to get preferred status in global apparel-production chains must be capable of meeting ever-rising quality,
production, and employment standards while at the same time lowering costs, inventory, and lead times on delivery. In the United States, textile and garment buyers demand quick and accurate response systems of their suppliers. Quick response entails technological integration within the supply chain to shorten lead times. Accurate response comprises integration of forecasting, planning, and production activities to allow manufacturers to postpone production until forecasts can be validated at the point-of-sale.
Reducing inventory and delivery lead times can be challenging for small firms because it involves integrating within the supply chain and investing in process improvement, infrastructure, technology, and training. To be successful, suppliers have to coordinate with customers in various process areas, including customer relationship management, demand management, enterprise resource planning, product development, order fulfillment, and procurement, among other items. It also includes adoption of new systems ranging from electronic data interchange to bar coding, often to customer specifications.
Despite the complexity of commodity chain integration, an opportunity for medium-sized African firms lies in the fact that global buyers seek nimble suppliers with low inventory. A good organizational structure with well-trained staff and close integration within the network should enable even small producers to avoid a make-to-stock production configuration that poses an expensive risk of obsolete inventories. However, it is also clear in light of the scale and competitive advantage that Chinese and
Indian textile and apparel firms have in the mass-market portion of the sector that African firms should focus on niche markets.
There is little question that recent developments in the international trading system mean that without substantial improvements in Africa’s behind-the-border business climate, the opportunities for apparel exporters on the continent maybe rapidly diminishing, notwithstanding the fact that preferential access to the US. market under AGOA still presents a window of opportunity for African-based suppliers. Many global buyers seek not only low-cost labor and production flexibility, but also value geographic diversity of supply to reduce exposure to risks. This is yet another opportunity for African suppliers to enter the global apparel supply chain. However,
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INVESTMENT
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TRADE LINKAGES IN AFRICAN
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ASIAN COMMERCE
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all these opportunities will not be realized without substantial investments in transportation and communications infrastructure and in trade facilitation, as discussed earlier in chapters 4 and 5.

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