Global sourcing shifts in the U.S. textile and apparel industry: a cluster analysis

Globalization of the U.S. textile and apparel industry has been significantly spurred in the last decade by trade agreements such as the North American Free Trade Agreement (NAFTA), and the Caribbean Basin Initiative (CBI). In terms of the U.S. textile and apparel manufacturers and retailers, the competitive pressure from markets and consumers has forced many firms to rely increasingly on global sourcing to sustain competitiveness. In the last decade, U.S. textile and apparel manufacturers and retailers have been actively involved in global sourcing to find suppliers who could meet the criteria of low cost, high quality, reliable delivery, quick response time, and flexibility. The purpose of this study is to investigate the changes in U.S. global sourcing patterns for yarn, fabric, and apparel. Cluster analysis is used to analyze trade data in 1993 and 2002 in order to investigate the patterns of U.S. global sourcing of textile and apparel products.Results indicate that U.S. textiles and apparel sourcing patterns have shifted, with a substantially increased emphasis on apparel imports from Mexico and the CBI countries in 2002 as compared to imports from mainland China and Hong Kong in 1993. Sourcing patterns of yarn and fabric indicate that Mexico upgraded its place in U.S. imports of yarn and fabric in 2002. In addition, further longitudinal analysis of U.S. apparel imports from mainland China, Hong Kong, CBI countries, and Mexico, which were the major players in the U.S. global sourcing of apparel, shows that there was a dynamic change in the status of these four regions in terms of their respective percentage shares in U.S. apparel sourcing. The paper concludes that the U.S. textile and apparel global sourcing patterns in last decade reflect the dramatic changes in the competitive and dynamic global textile and apparel business environment. Global sourcing is indeed a fine-tuning business strategy that requires balanced and comprehensive consideration of economic, trade, environmental, and competitive factors