CASE STUDY

Reshoring in the UK Apparel Industry

https://www.just-style.com/comment/a-new-model-for-reshoring-in-the-uk-garment-industry/?cf-view

The UK apparel industry is a major contributor to the UK economy, with a turnover of over £28 billion and employing over 800,000 people. However, the industry has faced significant challenges in recent years, including rising costs, competition from overseas markets, and Brexit.

Reshoring

Reshoring is the process of bringing back production to the UK from overseas. It is a complex decision, but it can offer a number of benefits to businesses, including:

• Reduced costs: Reshoring can help businesses to reduce transport costs, tariffs, and lead times.
• Improved quality: Businesses can have more control over the quality of their products if they are produced in the UK.
• Increased flexibility: Reshoring can make it easier for businesses to respond to changes in customer demand and new product development.
• Reduced environmental impact: Reshoring can reduce the environmental impact of businesses by reducing the amount of transportation required.

The Case of VATHOS Apparel

VATHOS Apparel is a Greek fashion brand that is committed to sustainable and ethical production. The company uses 100% organic materials and works with small, family-run businesses to produce its clothes.

VATHOS Apparel recently made the decision to reshore some of its production to Greece. This decision was motivated by a number of factors, including:

• A desire to reduce the environmental impact of the company’s supply chain.
• A desire to support the Greek economy.
• A desire to have more control over the quality of its products.

Challenges

While reshoring can offer a number of benefits, it is also important to be aware of the challenges involved. These challenges include:

• Higher labor costs: Labor costs in the UK are typically higher than in many overseas markets.
• Lack of skills: There may be a shortage of skilled workers in the UK in certain industries.
• Competition from overseas markets: Businesses that reshore may face increased competition from overseas markets.

Fuzzy DEMATEL Method

The Fuzzy DEMATEL method is a multi-criteria decision-making (MCDM) method that can be used to identify the key considerations and interrelationships among decision criteria in reshoring decisions.

The Fuzzy DEMATEL method involves the following steps:

1. Identifying the relevant decision criteria.
2. Collecting expert opinions on the interrelationships between the decision criteria using five linguistic terms: N (no influence), VL (very low influence), L (low influence), H (high influence), and VH (very high influence).
3. Converting the linguistic terms to numerical values using fuzzy set theory.
4. Calculating the direct-relation matrix (DRM), which shows the interrelationships between the decision criteria.
5. Calculating the total relationship matrix (TRM), which shows the cumulative effects of the interrelationships between the decision criteria.
6. Analyzing the TRM to identify the key considerations and interrelationships among the decision criteria.

Results of the Fuzzy DEMATEL Method

The Fuzzy DEMATEL method was applied to the case of VATHOS Apparel to identify the key considerations and interrelationships among decision criteria in its reshoring decision.

The results of the Fuzzy DEMATEL analysis showed that the following criteria are the most important to consider in reshoring decisions:

• Supply process complexity
• Environmental sustainability
• Cost-efficiency
• Social responsibility
• Uncertainty

The analysis also showed that supply process complexity is the most prominent criterion, meaning that it has the greatest influence on other criteria and is also influenced by other criteria.

Managerial Implications

The results of the Fuzzy DEMATEL analysis have a number of implications for managers who are considering reshoring:

• Supply process complexity is a key consideration in reshoring decisions. Managers should carefully consider the factors that contribute to supply process complexity, such as the number of suppliers involved, the complexity of the products being produced, and the distance between the production facilities and the market.
• Environmental sustainability is another important consideration in reshoring decisions. Managers should consider the environmental impact of their supply chain and take steps to reduce this impact, such as using sustainable materials and working with suppliers who have sustainable practices.
• Cost-efficiency is also a key consideration in reshoring decisions. Managers should carefully consider the costs associated with reshoring, such as labor costs, transport costs, and tariffs.
• Social responsibility is an important consideration for many businesses. Managers should consider the social impact of their reshoring decisions, such as the impact on employees and the community.
• Uncertainty is a factor that can influence reshoring decisions. Managers should carefully consider the risks and uncertainties associated with reshoring, such as changes in the economic and political environment.

Conclusion

Reshoring is a complex decision that requires careful consideration of a variety of factors, both tangible and intangible. The Fuzzy DEMATEL method can be used to identify the key considerations and interrelationships among decision criteria, which can help companies to make more informed and strategic decisions about where to locate their production activities.

The Fuzzy DEMATEL analysis conducted in this case study showed that supply process complexity, environmental sustainability, cost-efficiency, social responsibility, and uncertainty are the most important criteria to consider in reshoring decisions.

Managers who are considering reshoring should carefully consider these criteria and develop a reshoring plan that addresses the specific challenges and opportunities of their business.

This case study also has implications for policymakers. Governments can play a role in supporting reshoring by providing incentives to businesses, investing in infrastructure, and developing skills training programs.

Overall, reshoring is a complex but important decision that can help companies to improve their supply chains, reduce their environmental impact, and support their local economies.