Buying Office as a Catalyst in Global Apparel Sourcing: A Case Study in Korea

Abstract

The apparel industry is globalized and inter-connected industrydue to the complex production and marketing throughall stages of value chain. Most apparel companies obtain ormanufacture products through global sourcing. Global sourcingis defined as the process of identifying, evaluating, negotiating,and configuring supply across multiple geographies in order toreduce costs, maximize performance, and mitigate risks. Mostlarge-sized apparel companies that operate their own foreignbuying offices, located in foreign markets to facilitate producingand importing in that region for the company. In this case study, in-depth interview with merchandisers ormanagers of buying offices and vendors in Korea was conductedto explore the role of buying office in Korea under thecompetitive global apparel sourcing industry. Also, buying offices’strategies to have competitive advantage in a global sourcingindustry were examined. Work orders from foreign retail buyers are handled by themerchandiser team of buying office that liaises with vendors. Within the buying office, merchandisers cohesively work withtechnical design team, quality control team, and colorists tocomplete apparel production with vendors on behalf of thebuyer. Among the several departments within the buying office,merchandisers play a central role as a communication hubbetween buyers and vendors and among the internal teams. The working relationship between retail buyers and buyingoffices can be divided into three types including colorists, merchandisers,and R&Ds. The colorists, merchandisers, and R&Dteams of buying offices work with their corresponding counterpartsin retail buyers. First, colorists receive seasonal color palettesconsisted of 8-10 colors for main fabrics prior to the developmentalstage of the season and proceed with lab-dips developedby major fabric mills. Secondly, merchandisers work with vendors on behalf of retailbuyers. Within the buying office, merchandisers mostlydeal with buyers and technical design team and quality controlteam deal with vendors. Thirdly, the R&D teams work withdesigners, sourcing teams, and product development team in the retailers. Working process of buying office can be dividedinto two stages including pre-production stage and bulk productionstage. The three things regarded as most important strategies forthe future of buying agent are: providing value-added productdevelopment services, building a strong vendor-buyer relationship,and improving work efficiency. Competitive buying officesprovide buyers with value-added services through R&Dteams as well as quality-assured production managementthrough vendors. Through this process, buying office can demonstratethe competitiveness of the Korean market as a coreplace in the fashion industry rather than the mere manufacturerof ordered products, allowing continuous business deals withthe buyer. The relationships among buyer, buying office andvendor have been changed from hierarchical relationship tocollaborative partnership. This relationship is mutually benefitial,and facilitating relationships through an integrated supplychain result in reliable execution. Through the partnership relation,as work is done more efficiently, the buying office mediatesthe opinions of the buyer and vendor, and thus can specializein the distinct task of creating a balance between buyersand vendors. Through the experience of the direct dealingbetween buyer and vendor, it would reiterate the importance ofthe buying office’s role of mediator, allow buying offices toassign tasks to the vendor, and the buying office is decidedlyplaying the buying office’s inherent role. These efforts of buyingoffices have strengthened the competitiveness of theKorean vendors as well as buying offices located in Korea.