The impact of near-sourcing on the port of Rotterdam

Master thesis

Author: Hiu-mei Chau

Student number: 311050

Erasmus University Rotterdam

Erasmus School of Economics

Section Urban, Port and Transport Economics

Supervisor: Dr. Bart Kuipers

April 2013

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Abstract

In the past, many companies moved their production to China, because of the lower labour

costs. However, one sees that recently some companies are moving part of their production

back to Europe after experiencing several issues, such as, quality issues, increasing wages in

China, and an inflexible and unreliable supply chain. This emerging trend of producing in

countries near the final market is called “near-sourcing”.

The aim of this thesis is to find out what the impact of near-sourcing is on the port of

Rotterdam. Based on scientific papers, articles and newspapers, one finds that near-sourcing is

indeed an emerging trend. Furthermore, it has many advantages and opportunities that

companies overlooked. Besides, the hidden cost of global sourcing are overlooked by many

companies as well. According to Verweij (2009) the cost savings for a global sourcing

company, in the end, is in average only 5% or less. I focused on the clothing industry as I

believe that near-sourcing is relevant for this industry. Clothing companies should be able to

react quickly on the market demand when a certain T-shirt with a certain print turns out to be

a hot item.

The findings are that some companies are already near-sourcing and see near-sourcing as a

relevant strategy of the supply chain. Also, companies are aware of the increased production

costs in China and start seeking for alternatives. Near-sourcing may be a solution for this.

Next to China, more and more clothing companies are producing in Turkey and this share will

increase in the future. Thus, part of the production will move from China to Turkey. This

causes the port of Rotterdam to lose a certain part of the throughput as products from Turkey

are always transported by trucks to the Netherlands.

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Acknowledgements

During the period I’ve been writing this thesis, I faced many issues within the family and

friends sphere. In the beginning I thought I could get over it by myself as usually, but this

time it didn’t work out. After all I passed through this whole process and I believe that I’ve

become a mentally stronger person because of all these issues. I would like to thank many

people for their support and help during this period.

First of all, I would like to give special thanks to Loraine. The past 4 years you taught me a lot

and influenced my mode of life. I truly appreciate this.

Further, I want to give my thanks to my dearest friends Monic, Kelly, Kalai, May and Fandy.

Thank you for listening to my stories when I needed you and thanks for your valuable

advices.

In addition, I would like to thank Ms. Barbara Kwa and my classmate Marianne for keeping

me motivated to finish my thesis.

Further, I’m grateful to the supply chain managers and branch managers who were willing to

help me with my thesis and accepted my interview.

Last but not least, I would like to thank my supervisor Dr. Bart Kuipers. Without your

guidance and remarks I wouldn’t be able to produce a master thesis as it now is.

Thank you all for your support.

Hiu-mei Chau,

April 2013.

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Table of contents 1. Introduction ............................................................................................................................ 6

1.1 Background ....................................................................................................................... 6

1.2 Problem statement ............................................................................................................ 9

1.3 Research questions ......................................................................................................... 10

1.4 Methodology ................................................................................................................... 10

2. The growing impact of near-sourcing .................................................................................. 12

2.1 What is near-sourcing? ................................................................................................... 12

2.2 Definition of near-sourcing ............................................................................................ 13

2.3 Advantages of near-sourcing .......................................................................................... 14

2.4 Disadvantages of near-sourcing ...................................................................................... 15

2.5 Local sourcing versus near sourcing .............................................................................. 16

2.5.1 Illustrations from Mexico: near sourcing for the US-market .................................. 18

2.5.2 The impact of near sourcing on supply chains ........................................................ 19

3. Industries using near-sourcing.............................................................................................. 20

3.1 Illustrative examples of near-sourcing companies ......................................................... 20

3.2 The relevance of near-sourcing for the concerned industries ......................................... 21

3.3 The development of the trade value of the concerned industries .................................. 24

3.4 The development of the clothing industry in the Netherlands ........................................ 25

4. Statistical analysis of the textiles and clothing industry ...................................................... 27

4.1 The division of the textiles and clothing industry .......................................................... 27

4.2 Analysis of the statistics ................................................................................................. 31

4.2.1 Analysis of the statistics per subgroup in general ................................................... 32

4.2.2 Analysis of the statistics per group ......................................................................... 39

4.2.3 Analysis of the statistics of the group, end-products, in detail ............................... 44

4.2.4 Graphical analysis of HS-Code 61 and HS-Code 62. ............................................. 48

5. Global supply chain vs. local supply chain .......................................................................... 52

5.1 Definition of a supply chain ........................................................................................... 52

5.2 Development of supply chains ....................................................................................... 52

5.3 Different types of supply chains ..................................................................................... 55

5.4 Differences between a global and local supply chain ..................................................... 56

5.5 Global supply chain or local supply chain? .................................................................... 59

6. The port of Rotterdam .......................................................................................................... 67

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6.1 General information about the port of Rotterdam .......................................................... 67

6.1.1 General information about Maasvlakte II ............................................................... 67

6.1.2 General information about the throughput of the port of Rotterdam ...................... 68

7. The impact of near-sourcing on the port of Rotterdam in theory and figures ...................... 69

7.1 The impact of near-sourcing companies on the port of Rotterdam in theory ................. 69

7.2 The impact of near-sourcing companies on the port of Rotterdam in statistics ............. 72

8. Results of the interviews ...................................................................................................... 74

9. Conclusion ............................................................................................................................ 79

References ................................................................................................................................ 81

Appendix .................................................................................................................................. 87

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1. Introduction

The first chapter provides background information about the trend of companies moving their

production towards Southeast Asia, and the “problems” that arise because of this movement.

This will be followed by the research questions and the methodology.

1.1 Background “Made in China”, “Made in China”, “Made in China” - The majority of the products we’re

using nowadays is “Made in China”. In the past, many companies moved their production to

Southeast Asia (in particular China) to gain a competitive advantage. Companies had to

minimize their costs in order to stay competitive (The Economist, 2013). By producing in

Southeast Asia, companies benefit a cost advantage (Crnic, Kleemann & Seider, 2006)

because of the relative low labour costs compared to domestic production (Western Europe or

Northern America). From the basic economic theories, however, one knows that this cost

advantage will eliminate within a certain period of time since labour costs will increase as the

prosperity grows. This is also shown in practice. Citing Banister and Cook (2011):

“Inflation in China has been substantial. Consumer prices in urban areas increased

an average of 3.3 percent annually from 2005 through 2008. Consumer prices in rural

areas increased even more rapidly, at an average annual rate of 3.9 percent. Even

after an adjustment for consumer price inflation, the rise in compensation costs for

manufacturing workers in Chinese currency is real and rapid in urban manufacturing

units. One reason for the surging manufacturing labor compensation costs in China is

the rising literacy, numeracy, and educational attainment of even unskilled and

semiskilled employees from rural as well as urban areas, and even greater increases

in the human capital embodied in skilled workers and high-talent employees.”

A research from the Dutch organization of fabric and clothing traders and manufacturers,

Modint, shows that the hourly wages of manufactory workers in China increased with 89%

between 2005-2010 (FashionUnited, 2011), whereas, those in Europe increased with average

3.9% (Eurostat, 2012). Citing a special report of The Economist (2013):

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“The original idea behind offshoring was that Western firms with high labour costs

could make huge savings by sending work to countries where wages were much lower.

(…) But now companies are rethinking their global footprints. The first and most

important reason is that the global labour "arbitrage" that sent companies rushing

overseas is running out. Wages in China and India have been going up by 10-20% a

year for the past decade, whereas manufacturing pay in America and Europe has

barely budged.”

And according to LeBlanc (2009), the Guangdong province (China’s richest province) raised

its minimum wage by 18% in 2008 and some Chinese government subsidies have also been

eliminated, which has further increased manufacturing costs in China.

Besides, there are many “hidden” costs coupled to a Southeast Asia based supply chain.

“Most know that supply chain management is important but they underestimate the magnitude

of the hidden cost of longer supply chains, reduced flexibility and lost gross margin from

missed sales and write-downs” (Stalk & Waddell, 2007). According to Verweij (2009) the

cost savings for a global sourcing company, in the end, is in average only 5% or less.

Another problem are the rising energy prices - the price per gallon of diesel was close to $5

per gallon and oil barrel prices were nearly touching $150 during the summer of 2008

(Berman, 2012) - what makes sourcing in China relative costly. A study found that 56% of

companies surveyed now have a higher landed cost1

1 Landed cost is the cost to transform inputs at the source to outputs at the destination (Allon & Van Mieghem, 2010).

for products produced in Asia than they

had when they manufactured them at home (LeBlanc, 2009). Furthermore, a study of the

Boston Consulting Group (BCG) claims that over the next five years it will be more cost-

efficient to manufacture locally an estimated 10%-30% of goods currently imported from

China in product sectors, such as, transportation, appliances and electrical equipment,

furniture, plastic and rubber products, machinery, fabricated metal products, and computers

and electronics (Fossey, 2012). As a response to the rising costs in China, many companies

considered to manufacture in Central Eastern Europe (CEE), Turkey, Northern Africa, Central

America and Southern America. This shift of production to countries located near the markets

is called “near sourcing”. The statistics are also showing, to a certain extent, that there’s

indeed the phenomenon of near-sourcing taking place. Figure 1 (see appendix) shows that the

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share of national imports of the European Union, Canada, and the United States in world

imports has decreased from 19.3% to 17.5%, from 5.1% to 3.4%, and from 26.5% to 16.9%,

respectively, between 2000 and 2010. The fact that their national import as a percentage in the

world imports decreased may provide some evidence that the phenomenon of near-sourcing is

indeed taking place. The reasoning might be, that, their share of national import in world

imports decrease as the products are being produced near the final market (thus, in countries

within the same continent). Thus, in the case of the European Union, this means, that products

are being produced in CEE and being sold throughout Europe. As result, the national import

of the European Union itself decreases. This also applies to the United States, where products

are being produced in Central America or Southern America and being sold throughout the

United States, leading to a decrease of the share of national imports of the United States. Also,

the figures 2A and 2B (see appendix) are showing, to a certain extent, that the phenomenon of

near-sourcing is taking place in Europe. The statistics with regard to intra-Europe trade

shows, that, for several product groups, the amount of trade within the 27 countries of the

European Union has increased between 2006-2010. This will be further discussed in chapter

3. To confirm this, however, we are going to look at the statistics of the world trade in the

clothing sector as well and compare them with the statistics of intra-Europe trade in the

clothing sector, in order to find out, whether the intra-Europe trade compared to the world

trade increased relatively or not.

Companies operating in several industries might face near-sourcing, such as, biotechnology,

chemicals, construction, electrical engineering, food industry, information and

communication technologies, textiles and clothing, and tourism (European Commission,

2012). Near-sourcing seems especially relevant in the clothing industry, since it’s important to

have the newest collection of clothes available in the shops during the newest fashion trend

(to prevent missed sales), and, retailers must come up with a new collection regularly in order

to keep attracting customers. For an American fashion company producing in China, for

instance, it will take 85-120 days before the newest collection of clothes arrives, whereas

when producing in Mexico it takes 54-60 days (FashionUnited, 2011). The textiles and

clothing industry covers an important number of activities from the transformation of fibres to

yarns and fabrics to the production of a wide variety of products such as hi-tech synthetic

yarns, wool, bed-linen, industrial filters, geo-textiles, clothing etc. This sector is an important

part of the European manufacturing industry. It plays a crucial role on the economy and social

well-being in numerous regions of the EU-27. In 2006, there were 220.000 companies

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employing 2.5 million people and generated a turnover of €190 billion. The textiles and

clothing sector accounts for 3% of total manufacturing value added in Europe (European

Commission, 2012). Levelt (2010) indicates the importance of flexibility and punctuality in

the Market World of clothing as well, and, states the importance of a repeat order when an

item is sold quickly. However, this is not an easy task, because from the initial design ideas to

the final delivery to the retailer, it could take more than one year, and, even the delivery of an

already available model can take six weeks. A delay of one week can result in missing a sales

peak, and thus, missing revenues.

For the clothing industry it’s important to repeat an order quickly when an item is sold out,

and this is only possible when producing close to the consumer markets (with relative lower

transportation costs) or by producing in China and transport it by air (with relative higher

transportation costs). In both scenarios, this has a certain impact on the port of Rotterdam.

Many European distribution centers are located in The Netherlands, because it’s well-known

as a logistics country in Europe, with thanks to its “classic” characteristic, which is, good

accessibility to the European market because of the excellent hinterland connections. The role

of the port of Rotterdam, therefore, is relevant, since large amounts of clothing from China

enters Europe via the port of Rotterdam. Therefore, I will be focusing on the clothing industry

to find out what the impact of near-sourcing is on the port of Rotterdam.

1.2 Problem statement The fact that companies are implementing near-sourcing might have an impact on the port of

Rotterdam, since the port of Rotterdam functions as the gateway to Europe with an annual

throughput of about 430 million tons (Port of Rotterdam Authority, 2012). From a logical

sense, since not all products are being produced in Southeast Asia any longer, the amount of

transportation flows from Asia to Europe will reduce. While in the past products were shipped

from Asia to Europe (using the port of Rotterdam as a gateway), nowadays, products

produced in CEE might arrive at their final destination without reaching the port of

Rotterdam. Products produced in CEE can arrive the final destination by train or truck as well.

Hence, the role of the port of Rotterdam seems not indispensable anymore in a certain supply

chain. According to Notteboom & Winkelmans (2001) ports can no longer expect to attract

cargo simply because they are natural gateways to rich hinterlands since major port clients

consider ports merely as a sub-system in the logistics chain. The problem arises for the port of

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Rotterdam as the port is expanding with the Maasvlakte II, which provides a capacity of 17

million TEU (Port of Rotterdam Authority, 2012). Thus, the capacity of the port of Rotterdam

is expanding, while the port of Rotterdam will lose the part of cargo which is produced in

CEE and transported by trucks or trains, whereas it used to be shipped from Asia to

Rotterdam. However, research must be done in order to examine whether this is true or not.

With this master thesis I will investigate what the impact of near-sourcing is on the port of

Rotterdam.

1.3 Research questions For studying the impact of near-sourcing on the port of Rotterdam the following research

question has been formulated:

“Does the emergence and growing importance of near-sourcing have an impact on the

port of Rotterdam?”

There are 5 sub questions to answer the research question:

1. What is near-sourcing?

2. What are the advantages and disadvantages of near-sourcing?

3. For what types of industries will near-sourcing have an impact?

4. What are the several types of supply chains: a supply chain relying on global sourcing

with production centered in Asia/China and a supply chain relying on near-sourcing?

5. How is the clothing chain influencing the port of Rotterdam by near-sourcing?

1.4 Methodology First, a literature review will be done to find out what near-sourcing is. A definition as well as

advantages and disadvantages of near-sourcing will be given. Then, the importance and the

differences between near-sourcing and global sourcing will be raised. Also, several industries

will be mentioned, where near-sourcing has already been implemented or will do so in the

future. The impact of near-sourcing will be assessed on the industry level. This will be

followed by a few illustrative examples where companies have implemented near-sourcing

already. Furthermore, typical global sourcing and local sourcing supply chains of a clothing

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company will be identified. Additionally, I will interview several supply chain managers or

branch managers of clothing companies in the Netherlands to find out what the importance

and the impact of near-sourcing is on the port of Rotterdam. Finally, the thesis will end with a

conclusion, answering the research questions, and, some recommendations and shortcomings

will be given as well.

Figure 3. Schematic overview of the structure of the thesis. Source: made by author.

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2. The growing impact of near-sourcing

I conducted an extensive literature review on near-sourcing and local sourcing, from which

the most relevant parts are shown below. The advantages, potential, and relationship of near-

sourcing are mainly discussed in this chapter. Also, the first and second sub question “What is

near-sourcing?” and “What are the advantages and disadvantages of near-sourcing?” will be

discussed.

2.1 What is near-sourcing? As mentioned in the introduction in the previous chapter, companies have to reduce their costs

in order to stay competitive. As a result, many companies moved their production to countries

with lower labour costs, such as, China, India, Vietnam, and Bangladesh. Components of

products are manufactured all over the world in order to minimize costs. This phenomenon is

called “global sourcing”. Two other frequently used terms are “outsourcing” and

“offshoring”. These two terms are often used interchangeably, while there’s a certain

difference. Offshoring means moving work and jobs outside the country where a company is

based. Outsourcing, however, means sending work to outside contractors. These can be either

in the home country or abroad, but in offshoring they are always based overseas (The

Economist, 2013). Recently, there’s a reverse movement that companies remove (parts of)

their factories from Asia to their domestic country or near their domestic country, such as

countries located in CEE, Turkey, or Northern Africa in the case of West Europe and

countries located in Central America or Southern America in the case of Northern America.

This movement of reversing the production back to its origin is called “re-shoring” and

moving the production to a country near the market is called “near-sourcing”, “nearshoring”

or “local sourcing”. Many researchers pointed in their study about local sourcing that there is

no clear definition about “local” (Culliney, 2012), however, often it’s referred to a supplier in

the same country or region, depending on the type of industry. In this study, the phenomenon

that companies produce their products in CEE, Turkey, or Northern Africa instead of

producing in China is called “near-sourcing”. As a consequence of this trend, there’s a

slowdown in the line haul services between Asia-Europe and Asia-North America to be

expected. Moreover, the past 2 years have witnessed more near-sourcing activity from US and

European-based multinationals, with Eastern Europe, North Africa and Central America

seeing higher levels of inward investments (Fossey, 2012).

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2.2 Definition of near-sourcing As described before, near-sourcing is the phenomenon that companies located in

Western Europe produce or source in CEE, Turkey, or Northern Africa (and - in the case

of the US - companies located in Northern America produce in Central America

or Southern America) instead of producing in China or sourcing from China.

The director of AMR Research's Value Chain Strategies Group, Steve Hochman, describes

near-sourcing as follow “It's any kind of sourcing strategy that shrinks distance a measurable

degree, especially your source of supply and the market you serve” (Shister, 2008).

Hinkelman (2008) defines near-sourcing as “the contracting of a business function to an

outside third party contractor or subcontractor that is located in close domestic proximity to

the contracting company”. According to Huebsch (2012) “returning production to areas close

to their customer bases” is called near-sourcing. And, “near-sourcing” refers to the cases

where the outsourced operation is to a site in close geographical proximity (Ferdows, 2009).

Considering the several definitions, and since the focus is on the production of certain

companies that are producing in CEE, Turkey, or Northern Africa instead of China, here,

near-sourcing is defined as:

“Managing the supply chain in such a way that the production is taking place near the

final market with emphasize on reducing the distance in sourcing strategies, reducing

the “hidden” costs, and increasing the flexibility of the supply chain”.

With this research I’m focusing on identifying the impact of near-sourcing on the port of

Rotterdam. Therefore, I will make no difference between whether the production is organized

by a third party or not, because this is not relevant for the impact of near-sourcing on the port

of Rotterdam. Local sourcing and near shoring are synonyms for near-sourcing. In general,

“re-shoring” is a synonym for near-sourcing as well, but the main difference is that companies

that re-shore are companies that were producing in Europe in first place, but moved their

production to China (because of lower labour costs), and, after experiencing several problems

with producing in China, these companies are now moving their production back to Europe,

whereas, companies that near-source might not have produced their products in China, but

were producing in Europe or in the domestic country in the first place, and are now sourcing

from low-wage countries located in CEE, Turkey, or Northern Africa as alternative.

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2.3 Advantages of near-sourcing The fact that companies have been moving their production from Southeast Asia to CEE,

Turkey or Northern Africa is because many companies faced several problems with global

sourcing, such as, rising labour costs, lack of quality, long lead times, inflexibility, hidden

costs, lack of English language proficiency, different technical standards, lack of a holistic

supply chain view, and Chinese suppliers are unfamiliar with Western terms and conditions

(Accenture, 2007; Stalk & Waddell, 2007; Verweij, 2009; Allon & Van Mieghem, 2010; The

Economist, 2013). To a certain extent, these problems of global sourcing can be viewed as the

advantages of near-sourcing. As a result, the advantages of near-sourcing are in particular a

relative high quality, shorter lead times, a relative flexible production process,

lower transportation costs, and economic viability (Cagliano et al., 2012).

DePalma (2005) enumerates, time-zone compatibility, proximity to the markets, and cultural

identity, as advantages of near-sourcing. The Chartered Institute of Purchasing & Supply

(CIPS) (2012) indicates the following advantages when a company is sourcing locally: good

public relations for an organization (especially if it’s a large employer in an area);

demonstrates investment in the community; place considerable value on serving the local

community and the benefits associated with it; easier to travel to suppliers for supplier

development, contract management purposes, and site inspections; the local knowledge of

local suppliers means that they are well-placed to appreciate and satisfy local preferences; and

supply chains are generally shorter, which leads to greater certainty and predictability of

delivery times (CIPS, 2012). This is particularly attractive to companies working on a Just-in-

Time basis. The hidden costs - which are often overlooked - where Stalk & Waddell (2007)

are referring to, include lost gross margins and the cost of excess inventory write-downs. The

hidden costs of a lengthy supply chain related to global sourcing are the largest costs – and

thus the main disadvantage of global sourcing and therefore the main advantage of near-

sourcing. When the product isn’t there for the consumer to purchase, a company will face a

gross margin loss which ranges from 40% - 60% of the shelf price (Stalk & Waddell, 2007).

Besides, when there’s an oversupply of products that consumers don’t want, a company

will face the cost of excess inventory write-downs which comes down to 10% - 20% of sales

(Stalk & Waddell, 2007). Moreover, a company will face the expense of flushing defective

inventory from the supply chain. This type of hidden cost is related to the time, which is lost

to identify the cause of a quality problem, correcting it, and resetting production. Costs are

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incurred by removing the defective inventory and by producing additional goods to meet back

order and current demand (Stalk & Waddell, 2007).

2.4 Disadvantages of near-sourcing However, the main reason why companies moved their production to China is because of the

relative low wages. Despite of the rising labour costs in China, the hourly wages in China are

still relative low compared to those in Europe. Data of the Bureau of Labor Statistics (BLS)

(2011) shows that the hourly wage of an employee in China is around $1.36, whereas the

hourly wage of an employee in CEE is around $6.632

According to CIPS (2012) there are several disadvantages related to local sourcing. When

using local suppliers there is the potential risk of ‘getting too close for comfort’ (especially if

buyers find that the supplier's staff include company people they know socially and to whom

they may even be related). This can obviously lead to difficulties in the supplier selection and

contract award process (which to some extent can be overcome with a clearer ethics policy).

Even without close connections of this nature, difficulties can still arise with local suppliers in

the sense that if they fail to honour their contractual obligations, like any supplier, it may be

necessary to terminate the contract which can lead to undesirable local publicity.

(Eurostat, 2012). The main

disadvantage of near-sourcing is the relative high labour cost compared to China.

Moreover, possible disadvantages of using local suppliers are: a possible resistance to change,

too great a dependence on the buying organization which can lead to complacency in both the

financial and technical sense, if local suppliers are small businesses they may be restricted in

terms of exercising economies of scale and may be less efficient than their larger competitors,

and the difficulty of being able to differentiate between encouraging local suppliers to be

competitive and the positive discrimination in favour of local suppliers as a policy (Morrell,

2010; CIPS, 2012). It should be mentioned, however, that this last part of disadvantages are

probably more relevant for the food industry, as these disadvantages are more focused on

using local suppliers. In this case, local suppliers are referred to suppliers ‘based within easy

reach of the buyer’ (CIPS, 2012), which means that they’re located in the same city, or at

least, country. However, in the area of this study, companies in the clothing industry probably

2 This hourly wage is an average of the four countries in Europe with the lowest hourly wages, namely €3.50 (Bulgaria), €4.20 (Romania), €5.50 (Lithuania), and €5.90 (Latvia), whereby the average US/EUR exchange rate of 2011 is used: USD/EUR=0.72 (X-rates, 2012).

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won’t deal with this kind of local suppliers, because when clothing companies are near-

sourcing and if the final market is Western Europe, the suppliers are more likely from Turkey,

Spain, Romania, Bulgaria etc. and the products are normally not produced locally. In Table 1

the advantages and disadvantages of near-sourcing are summarized.

Advantages & Disadvantages of near-sourcing

Advantages Disadvantages

Relative high quality Relative high labour cost

Shorter lead times

Relative flexible production process

Lower transportation costs

Economic viability

Time-zone compatibility

Proximity to markets

Good public relations

Demonstrates investment in the community

Place value on serving the local community

Easier to travel to suppliers

Local knowledge of local suppliers/Cultural

identity

Shorter supply chain

Less hidden costs

Table 1. Advantages and disadvantages of near-sourcing. Source: made by author; based on

literature.

2.5 Local sourcing versus near sourcing Kaiser (1997) did a case study on Braun Electric (Shanghai) Co. Ltd (German manufacturer

of small electronic appliances), and examined the problems with and strategies of using local

suppliers for its productions of electric foil shavers in China. He indicated that many

multinational companies producing in China faced several problems, such as, dark

bureaucracy without defined contact partners, unclear Chinese priorities of distribution,

potential conflicts of interest, a missing network of markets, poor quality components, delays

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in component delivery, quantity requirements not met by the supplier, and poor delivery

service by the supplier. Besides, Kaiser (1997) points out that local purchasing is important as

it enables the company to produce on a just-in-time delivery basis, to decrease direct product

costs, to improve delivery service, to ease communication between supplier and manufacturer,

and to save foreign exchange. Finally, Kaiser (1997) has suggested a variety of potential

strategies to achieve the advantages of sourcing locally as much as possible, such as, keeping

and employing mental and personal directories, active consumption of information,

attendance at exhibitions, and component quality and supplier development.

Crone (2002) investigated the extent of local material input linkages at foreign multinational

plants in the United Kingdom (UK) and discussed the possibilities for policy intervention to

increase the level of local sourcing. Wagner, Fillis & Johansson (2005) did an exploratory

investigation to gain insights into attitudes and perceptions of supplier development and local

sourcing programs in the UK grocery retail sector. Their findings are that retailers do seem to

be undertaking supplier developments, but suppliers experience some difficulties in

supporting grocery retailer category management and branding strategies.

Waddel, Hutten-Czapski & Kosiński (2006) indicate the opportunity of sourcing in CEE. A

research conducted by the BCG suggests that some companies overlook the opportunity of

CEE and source and manufacture in Asia, because of some misperceptions about the CEE

region, combined with the huge attention on China. They recommend that companies that

source and produce products in China, which are being sold in Western Europe, might do

better to explore opportunities closer to the markets, since for many companies serving

Western Europe, CEE’s costs are competitive with China’s. CEE markets will continue to

grow for at least the next several years and CEE countries offer exceptional capabilities and

productivity. Furthermore, several CEE countries offer business environments that are more

favorable than China’s (Waddel, Hutten-Czapski & Kosiński, 2006).

Morris & Barnes (2008) investigated the dynamics of global clothing and textile value chains.

They showed how the economies of Sub-Saharan Africa have been drawn into these

globalized value chains, enabling the development of clothing industries in a number of less

developed, poor countries. They point out that policy levers must be directed not only towards

export market possibilities, but also towards realigning the domestic value chain in order to

ensure competitive access to domestic market opportunities. Besides, Morris & Barnes (2008)

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recommend that South African textiles and clothing manufacturers need to substantially

upgrade their operational capabilities to secure speed and flexibility that differentiates them

from primarily Asian competitors.

2.5.1 Illustrations from Mexico: near sourcing for the US-market Selko (2009) concludes that Mexico is becoming an increasing popular location as supply

chain management, and, quality issues continue to raise concerns about outsourcing

production to China. Companies are looking at near-sourcing opportunities and moving back

to North America, especially Mexico. Referring to Nathan Pieri, senior vice president of

marketing and product management with Management Dynamics, a provider of global trade

management solutions, in this article of Selko (2009) “Being able to coordinate the order

cycle and ship goods from the same time zone in Mexico is often more cost-effective than

trying to do that overseas given the logistic difficulties.”

Jordaan (2010) did a case study on FDI, local sourcing, and supportive linkages with domestic

suppliers in Mexico. He concludes that, whereas, first generation maquiladora3

3 A maquiladora is a manufacturing plant that imports and assembles duty-free components for export. The arrangement allows plant owners to take advantage of low-cost labour and to pay duty only on the “value added” (Encyclopaedia Britannica, 2012).

firms use

significantly less local suppliers, younger generation maquiladora firms purchase a

significantly larger share of their inputs in the region. This corresponds to the emerging trend

of near-sourcing, where, companies recently move their production from China to other low-

cost countries located in CEE, Turkey, or Northern Africa in the case of Western Europe.

Allon & Van Mieghem (2010) considered a firm that has access to a responsive nearshore

source (for example Mexico) and a low-cost offshore source (for example China), where the

firm must determine an inventory sourcing policy to satisfy random demand over time. They

analyzed a tailored base-surge (TBS) sourcing policy that combines push and pull controls by

replenishing at a constant rate from the offshore source and producing at the nearshore

plant only when inventory is below a target. The constant base allocation allows the

offshore facility to focus on cost efficiency, whereas the nearshore facility’s quick response

capability is utilized only dynamically to guarantee high service. They claim that total

landed cost was minimal when allocating more than 50%, but less than 100% to China.

19

2.5.2 The impact of near sourcing on supply chains The phenomenon of near-sourcing shows that more and more companies produce near the

final market in order to lower the lead times and the costs. Since it’s no longer as beneficial as

before to source in China because of the rising labour costs and lack of quality, an alternative

is sourcing in CEE, Turkey, or Northern Africa with reduced lead times and transportation

costs (Stalk & Waddell, 2007).

More recently, Cagliano, De Marco, Rafele & Arese (2012) proposed a decision-making

approach for investigating the potential effects of near-sourcing on supply chains. They found

that switching from East Asian suppliers to continental vendors enables a supply chain

reengineering that increases flexibility and responsiveness to demand uncertainty which

(together with decreased transportation costs) assures economic viability, thus proving the

benefits of near-sourcing. These findings correspond with the reasoning why companies

moved out of China, since global sourcing goes together with longer lead times, lower

responsiveness, and inflexibility (Accenture, 2007; Stalk & Waddell, 2007; Allon & Van

Mieghem, 2010). Additionally, lengthy supply chains are coupled with “hidden” costs such

as, increased inventories, overproduction and underproduction, write-downs of excess

inventories, and, most important, lost margins from stock outs (Stalk & Waddell, 2007).

According to Ferdows (2009), other hidden costs related to a footloose manufacturing

model are: atrophy of expertise, hurting morale, commoditizing the product, and helping

competitors.

20

3. Industries using near-sourcing

In this chapter, the third sub question “For what types of industries will near-sourcing have

an impact?” will be discussed. We’re going to have a look on the several industries in Europe.

The statistics of intra-trade of 27 EU-countries are used to find out whether a specific industry

is using (or tend to use) near-sourcing or not. The intra-trade value shows the value of goods

traded within Europe. When the intra-trade value is increasing within a certain period, one

might see this development as a sign of near-sourcing. Also, based on the advantages and

disadvantages of near-sourcing mentioned in the previous chapter, I made a review whether

these advantages are relevant for a certain industry or not. I judged the relevance of each item

based on logical sense and based on all literature I’ve read for this research. But first, a few

illustrative examples of near-sourcing companies are given below.

3.1 Illustrative examples of near-sourcing companies A well-known example of a near-sourcing clothing company is Zara, a Spanish clothing

company with 750 stores in 56 countries. Zara uses a so-called hybrid model - a rooted

network for the more complicated and time-sensitive products, like women’s suits in seasonal

colors, and, a footloose model for the simpler and predictable items, like men’s shirts in

classic colors (Ferdows, 2009).

Another well-known company, that is near-sourcing, is IKEA. It has a successful footloose

manufacturing network with 1220 suppliers in 55 countries (Inter IKEA systems B.V., 2012).

The 12 fulltime designers of IKEA are working in Sweden, and, the majority of its suppliers

are from Europe (67%), followed by Asia (30%), and North America (3%) (Inter IKEA

systems B.V., 2012).

Taphandles is another example of a near-sourcing company. Taphandles is a Seattle-based

company that produces distinctive tap handles for breweries. This company has a factory in

China with 450 employees. Since Taphandles is a fast-growing company, it needs 2 additional

factories. However, the CEO didn’t decide to put the new factories in China, but in the US.

One factory is located in Woodinville and the other factory is located in Chicago (Grunbaum,

2011).

21

As we see, near-sourcing can take place in every industry. Of course, the fact that a certain

company operating in a certain industry doesn’t mean automatically that near-sourcing is

taking place in this industry. One should look further into the statistics to confirm this.

3.2 The relevance of near-sourcing for the concerned industries Below, I will use a simple method based on the advantages of near-sourcing (which were

discussed in the previous chapter) to show the relevance of near-sourcing in the clothing

industry. Based on the advantages of near-sourcing, I will look at the relevance of these items

for each industry, which is summarized in figure 4 below. It should be mentioned that I only

considered the most relevant items. The relevance of the items is based on the number of

articles, where these items are discussed with regard to this topic.

22

Industry High

quality

Shorter

lead

times

Lower

transportation

costs

Time-zone

compability

Proximity

to

markets

Less hidden

costs

Food

industry

+ + + + + +

Crude

materials

industry

-* +/- + - + +

Energy

industry

-* +/- + - + +

Chemicals

industry

-* +/- + - + +

Textiles

and

clothing

industry

+ + + + + +

Footwear

industry

+ + + + + +

Figure 4. Relevance of the advantages of near-sourcing for the concerned industries. Source:

made by author. + = relevant for the industry - = not relevant for the industry +/- = nor relevant nor irrelevant for the

industry *The fact that I rated a minus ( − ) for the item high quality for the crude materials industry, energy

industry, and chemicals industry is not because the quality of the products in these industries are not important.

The reason for this, is that, the quality of the products in these industries do not differ, regardless the products are

sourced from China or CEE.

As one can see, based on the simple method I used above, the food industry, textiles and

clothing industry, and the footwear industry are the most sensitive to the selected items of

advantages of near-sourcing.

These are industries, where especially, good quality, short lead times, and low transportation

costs are relevant. The demand in the crude materials industry, energy industry, and chemicals

23

industry, is relative steady. Besides, it’s usual to work with contracts and forward contracts in

these industries to guarantee supply and demand for a fixed price.

Generally, the demand of consumers in the food industry is relative steady as well. However,

with the textiles and clothing industry it’s different. Of course, everyone is wearing clothes

every day, but not everyone is buying clothes every day (except shopaholics perhaps). Within

the textiles and clothing industry, the products can be divided into two groups: basic items

and fashion items. The latter is where I’m focusing on with this thesis.

Basic items are for example colored T-shirts without any prints and ordinary jeans. For the

basic items, it’s fine to produce them in China, even though, with longer lead times. Basic

items are not fashion sensitive, and therefore, not time sensitive. Thus, it doesn’t matter that

much whether those colored T-shirt are produced in China or CEE (only considering the lead

time element, assuming the other factors are more or less the same; ceteris paribus).

Normally, clothing companies know beforehand how many of those basic colored T-shirts are

sold per month approximately. Therefore, they can predict beforehand how many basic items

they need.

The lead time element, however, is relevant for the fashion sensitive items. For example,

when a certain shirt with a certain print becomes a hot item in the Netherlands (because a very

popular celebrity wore it or simply because the consumers like it a lot), the producers have to

increase their production to supply this product. However, when these shirts are being

produced in China, it will take about six weeks to transport them to the Netherlands. In this

period of six weeks, there’s no supply of these shirts, and retailers are missing revenues

because these shirts are out of stock.

Stock holding is no option for clothes, because the demand is unpredictable, and clothing

companies are working with the JIT concept to reduce costs. Besides, clothes are products

that are very sensitive to the reliability of the travel time (Kuipers, Snelder & Van der Ham,

2006). The lost of value of clothes is fast because of its short product life cycle. Another

problem is that the shirts are not that hot anymore when they arrive in the Netherlands two

months later. Perhaps two months later another product has become a hot item already.

Of course, one can solve this problem by transporting them by air instead of sea, but this

increases the transportation costs significantly. Therefore, I think it might be a good

alternative/solution for the clothing industry (in particular the fashion sensitive part) to

24

implement near-sourcing. When the products are being produced near the final market, the

lead times are shorter. For products being produced in Turkey, for example, it takes only 5

days to arrive in the Netherlands when transporting by truck. Further in this thesis, we’ll look

into the development and the functioning of the clothing industry and try to link this with

near-sourcing.

3.3 The development of the trade value of the concerned industries There are several industries where companies are implementing near-sourcing, such as,

especially, the food industry, the crude materials industry, the energy industry, the chemicals

industry, the textiles and clothing industry, and the footwear industry. Based on the figures 2A

and 2B (see appendix), one can conclude that near-sourcing is taking place in Europe with

regard to, first, the food industry as the total intra-trade value within the 27 EU-countries of

the product group food and live animals increased from 172,541 million euro to 212,852

million euro from 2006 to 2010 (an increase of 23.4%) (see table 2 below);

second, the crude materials industry as the total intra-trade value within the 27 EU-countries

of the product group crude materials, except fuels increased from 71,801 million euro to

82,004 million euro from 2006 to 2010 (an increase of 14.1%);

third, the energy industry as the total intra-trade value within the 27 EU-countries of the

product group energy products increased from 155,614 million euro to 172,243 million euro

from 2006 to 2010 (an increase of 10.7%);

fourth, the chemicals industry as the total intra-trade value within the 27 EU-countries of the

product group chemicals increased from 358,668 million euro to 414,866 million euro from

2006 to 2010 (an increase of 15.7%);

fifth, the textiles and clothing industry, and sixth the footwear industry as the total intra-trade

value within the 27 EU-countries of the product group miscellaneous manufactured articles

increased from 270,731 million euro to 288,132 million euro from 2006 to 2010 (an increase

of 6.4%).

Looking at specified statistics for the latter two industries, for the textiles and clothing

industry, the sub-product group clothing and clothing accessories, under the product group

miscellaneous manufactured articles, shows an increase in intra-trade value within the 27 EU-

25

countries from 56,408 million euro to 58,698 million euro from 2006 to 2010 (an increase of

4.1%); and for the footwear industry, the sub-product group footwear, under the product

group miscellaneous manufactured articles, shows an increase in intra-trade value within the

27 EU-countries from 18,380 million euro to 20,137 million euro from 2006 to 2010 (an

increase of 9.6%). However, based on this, one cannot conclude immediately that near-

sourcing is taking place in the clothing industry. In chapter 4 we’ll look further into the

statistics of the textiles and clothing industry to find out whether near-sourcing is indeed

taking place or not.

Although, the total intra-trade value of the clothing and clothing accessories industry

increased with a relative small percentage (4.1%) compared to the other industries, it shows to

a certain extent some signs of near-sourcing taking place in this industry. Moreover, having a

look at figure 5 (see appendix), one can see that the top 10 main trading partners of the 27

EU-countries for the sub-product group clothing and clothing accessories include Turkey

(ranked nr.2), Tunisia (ranked nr.5), and Morocco (ranked nr.6), which are countries located

in CEE and Northern Africa. The most relevant statistics concerning these industries are

summarized in table 2 below.

Industry

Europe

Trade value 2006 Trade value 2010 % change

Food industry €172,541 million €212,852 million 23.4%

Crude materials industry €71,801 million €82,004 million 14.1%

Energy industry €155,614 million €172,243 million 10.7%

Chemicals industry €358,668 million €414,866 million 15.7%

Textiles and clothing industry €56,408 million €58,698 million 4.1%

Footwear industry €18,380 million €20,137 million 9.6%

Table 2. Summarized statistics with regard to the relevant industries; Trade value of Europe.

Source: made by author; statistics from Eurostat, 2011.

3.4 The development of the clothing industry in the Netherlands In the past, clothing was homemade or tailor-made, but from the 1870s onward ready-made

clothing began replacing the tailor-made suit. Wholesalers, importers, tailors, and traders in

second-hand clothing started to create and export clothes. The retailers that started to make

clothes in their ateliers are comparable with the clothing houses we know nowadays. These

26

retailers purchased fabric from Dutch fabric producers located in Twente or Noord-Brabant.

In the beginning, they sourced most production work in-house, but later on they started to

outsource to workshops and larger ateliers. Some of those fabric producers made their own

designs and turned into clothing producers. Many apparel makers used to work in the city

centre of Amsterdam, which was the core of Dutch clothing production. But, after the Second

World War, these apparel makers moved their production to the countryside in Noord-

Holland, Zuid-Holland, Friesland, and Twente (Levelt, 2010). The fact that the production

moved to the countryside is comparable with what happens nowadays that the production

moves to low cost countries. The wages in the countryside are lower than in the city centre.

The clothing production increased between 1950-1963 in the North, South and East of the

Netherlands, but it decreased in the Western part of the Netherlands. During this period,

Amsterdam lost about 10,000 jobs (Levelt, 2010). Later on, the production moved to

Southeast Asia, because of the lower wages. Global sourcing has become the new trend of

doing business. More and more clothes we’re wearing nowadays is “Made in Bangladesh”,

“Made in Turkey”, “Made in Thailand”, “Made in Vietnam” and no longer only “Made in

China”.

27

4. Statistical analysis of the textiles and clothing industry

In this chapter, we’ll look further into the statistics of the textiles and clothing industry. Table

2 in the previous chapter only gives us a very basic and simple idea of the trade values of the

several industries. Actually, it doesn’t tell us the real story since the trade value of Europe

should be compared with the trade value of the rest of the world. To have a good insight of

the development in trade value of the textiles and clothing industry one should compare the

statistics of Europe with those of the rest of the world to find out whether the trade value in

Europe has increased relatively or not compared to the world trade. Therefore, now, we’ll

look at more detailed statistics of the textiles and clothing industry. It should be noted that

these statistics are not from the database as in section 3.3. The statistics used in this chapter

are not obtained from Eurostat, but from the International Trade Centre and that the values are

in US dollars instead of Euro’s.

4.1 The division of the textiles and clothing industry The textiles and clothing industry is divided into 14 subgroups according to the Harmonized

Commodity Description and Coding System (HS) nomenclature (an internationally

standardized system of names and numbers for classifying traded products). To keep it clear

and simple, I worked with statistics of the 2-digit HS Code (instead of the 4-digit HS Code,

where the 14 subgroups are in turn divided into 149 subgroups). The distribution of the HS

Code is illustrated below.

28

01-05 Animal & Animal Products

06-15 Vegetable Products

16-24 Foodstuffs

25-27 Mineral Products

28-38 Chemicals & Allied Industries

39-40 Plastics / Rubbers

41-43 Raw Hides, Skins, Leather, & Furs

44-49 Wood & Wood Products

50-63 Textiles

50 silk, inc. yarns & woven fabrics thereof

51 wool & fine or coarse animal hair, inc. yarns & woven fabrics thereof

52 cotton, inc. yarns & woven fabrics thereof

53 veg. textile fibers4 nesoi5

, yarns & woven etc.

54 man-made filaments, inc. yarns & woven etc.

55 man-made staple fibers, inc. yarns etc.

56 wadding, felt & nonwovens, special yarns, twine, cordage, ropes & cables & articles

57 carpets & other textile floor coverings

58 special woven fabrics, tufted textiles, lace

59 impregnated, coated, covered, or laminated textile prod, textile prod for industrial use

60 knitted or crocheted fabrics

61 articles of apparel & clothing accessories-knitted or crocheted

62 articles of apparel & clothing accessories-not knitted or crocheted

63 made-up textile articles nesoi, needlecraft sets, worn clothing, rags

64-67 Footwear / Headgear

68-71 Stone / Glass

72-83 Metals

84-85 Machinery / Electrical

86-89 Transportation

90-97 Miscellaneous

98-99 Service

Table 3. Distribution of the Harmonized Commodity Description and Coding System (HS)

nomenclature. Source: International Trade Centre, 2013.

4 Veg. textile fibers= Vegetable textile fibers. Vegetable fibers are produced by plants, and, are based on arrangements of cellulose. (Examples of vegetable fibers are: flax, true hemp, jute, coconut and abaca.) 5 Nesoi= Not Elsewhere Specified Or Included

29

Table 3 shows how the traded products are classified according to the HS-Code. As one can

see, there are 16 main groups, which are:

1. Animal & Animal Products (HS-Code 01-05); 2. Vegetable Products (HS-Code 06-15); 3. Foodstuffs (HS-Code 16-24); 4. Mineral Products (HS-Code 25-27); 5. Chemicals & Allied Industries (HS-Code 28-38); 6. Plastics / Rubbers (HS-Code 39-40); 7. Raw Hides, Skins, Leather, & Furs (HS-Code 41-43); 8. Wood & Wood Products (HS-Code 44-49); 9. Textiles (HS-Code 50-63); 10. Footwear / Headgear (HS-Code 64-67); 11. Stone / Glass (HS-Code 68-71); 12. Metals (HS-Code 72-83); 13. Machinery / Electrical (HS-Code 84-85); 14. Transportation (HS-Code 86-89); 15. Miscellaneous (HS-Code 90-97); and 16. Service (HS-Code 98-99).

Since I’m investigating the clothing industry, I’ll be focusing on the group Textiles (HS-Code

50-63) only. As indicated before, the main group, Textiles (HS-Code 50-63), is divided into

14 subgroups, which are:

1. Silk, inc. yarns & woven fabrics thereof (HS-Code 50); 2. Wool & fine or coarse animal hair, inc. yarns & woven fabrics thereof (HS-Code 51); 3. Cotton, inc. yarns & woven fabrics thereof (HS-Code 52); 4. Veg. textile fibers nesoi, yarns & woven etc. (HS-Code 53); 5. Man-made filaments, inc. yarns & woven etc. (HS-Code 54); 6. Man-made staple fibers, inc. yarns etc. (HS-Code 55); 7. Wadding, felt & nonwovens, special yarns, twine, cordage, ropes & cables & articles

(HS- Code 56); 8. Carpets & other textile floor coverings (HS-Code 57); 9. Special woven fabrics, tufted textiles, lace (HS-Code 58); 10. Impregnated, coated, covered, or laminated textile prod, textile prod for industrial use

(HS-Code 59); 11. Knitted or crocheted fabrics (HS-Code 60); 12. Articles of apparel & clothing accessories-knitted or crocheted (HS-Code 61); 13. Articles of apparel & clothing accessories-not knitted or crocheted (HS-Code 62); and 14. Made-up textile articles nesoi, needlecraft sets, worn clothing, rags (HS-Code 63).

30

Hereafter, I’ll be working with the statistics of these 14 subgroups to find out whether near-

sourcing is taking place in the textiles & clothing industry or not. These 14 subgroups are

divided into 2 groups: semi-manufactures (HS-Code 50-59) and end-products (HS-Code 60-

63). To find out whether near-sourcing is taking place in the textiles & clothing industry,

we’ll analyze the statistics by 3 groups: the whole textile industry (HS-Code 50-63), the semi-

manufactures (HS-Code 50-59), and the end-products (HS-Code 60-63). Using this division,

the statistics may show us a better and clearer picture of the industry. By doing this, we’ll find

whether near-sourcing is taking place in the whole textile industry, or only for the

intermediates, or only for the end-products. The division of the subgroups is showed in table 4

below.

The

whole

textile

industry

50-63 Textiles

Semi-

manufactures

50 silk, inc. yarns & woven fabrics thereof

51 wool & fine or coarse animal hair, inc. yarns & woven fabrics thereof

52 cotton, inc. yarns & woven fabrics thereof

53 veg. textile fibers nesoi, yarns & woven etc.

54 man-made filaments, inc. yarns & woven etc.

55 man-made staple fibers, inc. yarns etc.

56 wadding, felt & nonwovens, special yarns, twine, cordage, ropes & cables

& articles

57 carpets & other textile floor coverings

58 special woven fabrics, tufted textiles, lace

59 impregnated, coated, covered, or laminated textile prod, textile prod for

industrial use

End-products

60 knitted or crocheted fabrics

61 articles of apparel & clothing accessories-knitted or crocheted

62 articles of apparel & clothing accessories-not knitted or crocheted

63 made-up textile articles nesoi, needlecraft sets, worn clothing, rags

Table 4. Division of the textile industry and the 14 subgroups. Source: International Trade

Centre, 2013.

See appendix for detailed statistics with regard to the 14 subgroups. The statistics relate to the

export value of the traded products (classified in the 14 subgroups) from 2001-2011 per

country. Therefore, there are 14 figures (one figure per subgroup) with detailed statistics

shown in the appendix. Since I’m investigating near-sourcing of companies located in Europe,

I’ll only look into the statistics of the world (as total), China, the Eastern European countries

31

with significant and relevant statistics6, Turkey, and Northern African countries with

significant and relevant statistics7

.

4.2 Analysis of the statistics The statistics of the world and China are used as indicator to conclude whether a country is

having a relative high growth in export value of the concerned product or not. When the

percentage change of a certain country is higher than the percentage change of the world, one

can conclude that the production of the concerned product in that country increased relative

more strongly than the total world production of that product, and as result, one can conclude

that near-sourcing is taking place for that product in that country. It becomes even better,

when the percentage change of a certain country is higher than the percentage change of

China, because this confirms even more that near-sourcing is taking place in the textile &

clothing industry.

First, we’ll look into the statistics of each subgroup, separately, to see which countries are

showing significant statistics. Then, we’ll look into the statistics of the 3 groups (the whole

textile industry, the intermediates, and the end-products). Hereafter, we’ll analyze the

statistics of the group, end-products. Furthermore, a graphical analysis of HS-Code 61 and

HS-Code 62 will be done, since these two groups contains the clothes (the end-products)

we’re wearing and this is where I’m focusing on with this thesis. Based on the findings of the

statistics, one can conclude whether near-sourcing is taking place in the whole textile

industry, or only the intermediates, or only the end-products or not at all.

6 The Eastern European countries with significant and relevant statistics, include: Belarus, Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, and Ukraine. 7 The Northern African countries with significant and relevant statistics, include: Egypt, Morocco, and Tunisia.

32

4.2.1 Analysis of the statistics per subgroup in general Silk, inc. yarns & woven fabrics thereof (HS-Code 50) - (Semi-manufactures)

This group contains everything of the clothing fabric

silk, which will be further processed in factories. For

the subgroup silk, inc. yarns & woven fabrics thereof

(further referred as HS-Code 50), one can see that the

world’s percentage change in exported value between

2001-2011 is 51.8%, and China’s percentage change

is 111.2% (see appendix; figure 6). Notable Eastern

Source: HSCODELIST.com, 2013. European countries, here, are Romania and Slovakia,

with a percentage change of 2463.4% and 4698.9%, respectively. Turkey, however, is not

showing a higher percentage change than China (but does show a higher percentage change

than the world), while Turkey has a certain magnitude as country. The Northern African

countries are not showing notable statistics as well.

Wool & fine or coarse animal hair, inc. yarns & woven fabrics thereof (HS-Code 51) - (Semi-

manufactures)

This group contains everything of the fabrics

wool and animal hair, which are used as part of

apparel. For the subgroup wool & fine or coarse

animal hair, inc. yarns & woven fabrics (further

referred as HS-Code 51), one can see that the

world’s percentage change in exported value

between 2001-2011 is 37.9%, and China’s

Source: HSCODELIST.com, 2013. percentage change is 173.4% (see appendix;

figure 7). Notable Eastern European countries, here, are Bulgaria, Czech Republic, and

Romania, with a percentage change of 599.9%, 211.7% and 966.4%, respectively. Turkey, is

again not showing a higher percentage change than China (but does show a higher percentage

change than the world). Morocco is the only Northern African country showing relative

significant statistics, with a 232.8% percentage change of the exported value of HS-Code 51

between 2002-2011.

33

Cotton, inc. yarns & woven fabrics thereof (HS-Code 52) - (Semi-manufactures)

This group contains everything of the fabric

cotton, which will be further processed by

factories in order to make, for example, T-shirts.

For the subgroup cotton, inc. yarns & woven

fabrics thereof (further referred as HS-Code 52),

one can see that the world’s percentage change in

exported value between 2001-2011 is 96%, and

China’s percentage change is 323.7% (see

Source: HSCODELIST.com, 2013. appendix; figure 8). None of the Eastern

European countries and Northern African countries are showing significant statistics. None of

those countries has a higher percentage change than China (but many of them do show a

higher percentage change than the world). Turkey, as a large country, (only) shows a

percentage change of 128.1%.

Veg. textile fibers nesoi, yarns & woven etc. (HS-Code 53) - (Semi-manufactures)

This group contains everything of fabrics made

of vegetable textile fibers. Examples of vegetable

textile fibers are flax, jute and hemp. Linen is

made of these vegetable textile fibers. For the

subgroup veg. textile fibers nesoi, yarns & woven

etc. (further referred as HS-Code 53), the world

is showing a percentage change in exported

value between 2001-2011 of 51.2%, and China is

Source: HSCODELIST.com, 2013. showing a percentage change of 149.2% (see

appendix; figure 9). The only Eastern European country with significant statistics is, Belarus,

showing a percentage change of 188.2%. The statistics of Turkey and Tunisia are notable as

well, showing a percentage change of 469.9% and 149%, respectively.

34

Man-made filaments, inc. yarns & woven etc. (HS-Code 54) - (Semi-manufactures)

This group contains everything of fabric filaments,

such as, synthetic filament yarn and woven fabrics

of artificial filament yarn, which are for retail sale.

For the subgroup man-made filaments, inc. yarns &

woven etc. (further referred as HS-Code 54) the

world is showing a percentage change in exported

value between 2001-2011 of 66.4%, whereas,

Source: HSCODELIST.com, 2013. China’s percentage change is 750.8% (see appendix;

figure 10). None of the Eastern European and Northern African countries are showing

significant statistics, except Egypt. The percentage change of Egypt is 264.8% between 2008-

2011, while calculating the world’s and China’s percentage change between the

corresponding period, they show a percentage change of 13.2% and 57.5%, respectively. Even

Turkey, as a quite large country, shows a percentage change of (only) 207.7% between 2001-

2011.

Man-made staple fibers, inc. yarns etc. (HS-Code 55) - (Semi-manufactures)

This group contains everything made of the fabric

staple fibers, such as, yarn of synthetic staple

fibers, yarn of artificial staple fibers, and yarn of

man-made staple fibers. These staple fibers will be

carded, combed or otherwise processed for

spinning. For the subgroup man-made staple

fibers, inc. yarns etc. (further referred as HS-Code

Source: HSCODELIST.com, 2013. 55), the percentage change in exported value

between 2001-2011 of the world and China, is 83.9% and 320.3%, respectively (see appendix;

figure 11). Bulgaria and Romania are notable Eastern European countries with a percentage

change of 387.6% and 446.9%, respectively. Turkey is showing a percentage change of

108.6% . Egypt is the only Northern African country with relative significant statistics.

Egypt’s percentage change between 2008-2011 is 200.8%, while calculating the percentage

change of the world and China for the corresponding period, they show a percentage change

of only 27.5% and 62.3%, respectively.

35

Wadding, felt & nonwovens, special yarns, twine, cordage, ropes & cables & articles (HS-

Code 56) - (Semi-manufactures)

This group contains, for example, wadding of

textile materials, and, textile-covered rubber thread

and cord. For the subgroup wadding, felt &

nonwovens, special yarns, twine, cordage, ropes &

cables & article (further referred as HS-Code 56),

one can see that the world’s percentage change in

exported value between 2001-2011 is 151.1%, and

Source: HSCODELIST.com, 2013. China’s percentage change is 948.1% (see

appendix; figure 12). Notable Eastern European countries are Czech Republic and Slovakia,

with a percentage change of 428.3% and 1469%, respectively. Poland and Turkey as relative

large countries show a percentage change of 439.2% and 621.3%, respectively. None of the

Northern African countries are showing significant statistics.

Carpets & other textile floor coverings (HS-Code 57) - (Semi-manufactures)

This group contains carpets and other floor

coverings, which are made of textile materials or

felt, and, which are knotted or woven. For the

subgroup carpets & other textile floor coverings

(further referred as HS-Code 57), the world and

China are showing a percentage change in

exported value between 2001-2011 of 78.4% and

Source: HSCODELIST.com, 2013. 373.5%, respectively (see appendix; figure 13).

Poland, as a quite large Eastern European country shows a percentage change of 448.9%, and

Turkey is showing a percentage change of 508.5%. Notable is that both of them are showing a

higher percentage change than China. The Northern African country, Egypt, is showing

relative significant statistics as well. Egypt’s percentage change between 2008-2011 is

129.5%, while calculating the percentage change of the world and China for the

corresponding period, they show a percentage change of only 2.4% and 43.6%, respectively.

36

Special woven fabrics, tufted textiles, lace (HS-Code 58) - (Semi-manufactures)

This group contains special woven fabrics, such

as, woven pile fabrics, chenille fabrics, terry

toweling, and hand-woven tapestries. For the

subgroup special woven fabrics, tufted textiles,

lace (further referred as HS-Code 58), one can see

that the percentage change of the exported value

between 2001-2011 of the world and China are

Source: HSCODELIST.com, 2013. 68% and 480.9%, respectively (see appendix;

figure 14). Poland, as a quite large Eastern European country shows a percentage change of

339.9%. Turkey, however, is showing a percentage change of only 83.1%. Egypt is showing

significant statistics, with a percentage change between 2008-2011 of 239%, while calculating

the percentage change of the world and China for the corresponding period, they show a

percentage change of -9.6% and -14.8%, respectively. Notable is that Egypt’s exported value

of HS-Code 58 increased during this period, whereas the world’s and China’s exported value

of HS-Code 58 decreased during this period.

Impregnated, coated, covered, or laminated textile prod, textile prod for industrial use (HS-

Code 59) - (Semi-manufactures)

This group contains, for instance, textile fabrics

coated with gum, floor coverings consisting of a

coating or covering applied on a textile backing,

painted canvas for use as theatrical scenery, and,

impregnated, coated or covered textile fabrics,

which are for industrial use. For the subgroup

Source: HSCODELIST.com, 2013. impregnated, coated, covered, or laminated textile

prod, textile prod for industrial use (further referred as HS-Code 59), one can see that the

world’s percentage change in exported value between 2001-2011 is 105.7%, and China’s

percentage change is 1517.9% (see appendix; figure 15). The Eastern European countries with

relative significant statistics are Czech Republic and Hungary, with a percentage change of

215.5% and 334.5%, respectively. Poland, as a quite large Eastern European country, shows a

37

percentage change of 322.5%. The other relative large country, Turkey, shows a percentage

change of 141.3%. None of the Northern African countries are showing significant statistics.

Knitted or crocheted fabrics (HS-Code 60) - (End-products)

This group contains pile fabrics and warp knit

fabrics, which are knitted or crocheted. For the

subgroup knitted or crocheted fabrics (further

referred as HS-Code 60), the world and China are

showing a percentage change in exported value

between 2001-2011 of 108% and 686%,

respectively (see appendix; figure 16). However,

Source: HSCODELIST.com, 2013. none of the Eastern European countries and

Northern African countries are showing significant statistics. Poland and Turkey as relative

large countries are showing a percentage change of only 239.5% and 520.7%, respectively.

Articles of apparel & clothing accessories-knitted or crocheted (HS-Code 61) - (End-

products)

This group contains, for instance, overcoats, suits,

blazers, trousers, blouses, T-shirts, and gloves,

including knitted or crocheted products. For the

subgroup articles of apparel & clothing

accessories-knitted or crocheted (further referred

as HS-Code 61), one can see that the world’s

percentage change in exported value between

2001-2011 is 151.8%, and China’s percentage

Source: HSCODELIST.com, 2013. change is 495.8% (see appendix; figure 17). None

of the Eastern European and Northern African countries are showing significant statistics.

Poland and Turkey as relative large countries show a percentage change of 260% and 130.3%,

respectively.

38

Articles of apparel & clothing accessories-not knitted or crocheted (HS-Code 62) - (End-

products)

This group contains, for instance, overcoats,

suits, blazers, trousers, blouses, gloves, shawls,

and ties, excluding knitted or crocheted

products. For the subgroup articles of apparel &

clothing accessories-not knitted or crocheted

(further referred as HS-Code 62), the world and

China are showing a percentage change in

exported value between 2001-2011 of 93.6% and

Source: HSCODELIST.com, 2013. 232.8%, respectively (see appendix; figure 18).

Bulgaria is showing relative significant statistics (although, with a percentage change of only

98.3%) by having a relative high exported value. This holds for Poland, Turkey, Morocco,

and Tunisia as well. The percentage change of all these countries is relative low compared to

the world and China, but the statistics of these countries show a quite high exported value of

HS-Code 62.

Made-up textile articles nesoi, needlecraft sets, worn clothing, rags (HS-Code 63) - (End-

products)

This group contains products, such as, blankets,

table linen, curtains, and articles of interior

furnishing, which are of all types of textile

materials. For the subgroup made-up textile

articles nesoi, needlecraft sets, worn clothing,

rags (further referred as HS-Code 63), the

world is showing a percentage change in

Source: HSCODELIST.com, 2013. exported value between 2001-2011 of 194.5%,

whereas, China’s percentage change is 512.8% (see appendix; figure 18). None of the Eastern

European and Northern African countries are showing notable statistics. The two relative

large countries, Poland and Turkey, are showing relative high export values, but are also

39

showing a relative low percentage change (123.6% and 102.7%, respectively) compared to the

world and China.

Based on the analyzed statistics, above, one can conclude that near-sourcing is, especially,

taking place for the group semi-manufactures. The index value of several countries, such as

Belarus, Bulgaria, Czech Republic, Egypt, Poland, Romania, Slovakia and Turkey are

showing a relative high growth of the export value compared to China. The statistics of the

concerned countries for the group, end-products, show a relative low growth of the export

value compared to the world an China. This might implicate that companies are more and

more producing the products of HS-Code 60-63 in China and other Southeast Asian countries.

4.2.2 Analysis of the statistics per group Below follows 6 tables (Table 5 – Table 10) with statistics of the 3 groups (the whole textile

industry, the intermediates, and the end-products) for the concerning countries. There are two

tables per group (one table showing the export value in absolute numbers and one table

showing the export value in index value).

40

Based on table 5 and table 6 (see appendix for the detailed tables) one can conclude that for

the group, whole textile industry, in general, Turkey and Poland are the main competitors of

China for exporting products of HS-Code 50-63. Countries like Czech Republic, Romania,

Morocco, Tunisia, and Egypt are competitive as well, but to a lesser extent. They all show a

relative high export value of HS-Code 50-63, and therefore, can be seen as countries where

companies are (near-)sourcing from. Moreover, Turkey shows a slight increase (0.4%) in the

share of the world’s export value between 2001-2011. The summarized tables are shown

below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 362359899 100% 757116930 100%

China 49829025 13.8% 240539593 31.8%

Eastern Europe 12643637 3.5% 23610338 3.1%

Turkey 10396804 2.9% 24961495 3.3%

Northern

Africa* 5344706** 1.5% 11300305 1.5%

Table 5. Export value of the group, whole textile industry, in absolute numbers. (Unit: 1000

Dollar). Source: made by author; statistics from International Trade Centre, 2013. * Egypt is

excluded since the statistics of Egypt are only available from 2008.

** Contains the export value of Morocco in 2002 and the export value of Tunisia in 2001.

Exporter 2001 (= base year) 2011

World 100 208,9

China 100 482,7

Eastern Europe 100 187,7 (average)

Turkey 100 240,1

Northern Africa 100 162.2 (average)

Table 6. Export value of the group, whole textile industry, in index value. Source: made by

author; statistics from International Trade Centre, 2013.

41

Based on table 7 and table 8 (see appendix for the detailed tables) one can conclude that for

the group, intermediates, in general, Turkey and Czech republic are the main competitors of

China for exporting products of HS-Code 50-59. Poland and Egypt can also be seen as

competitors of China, but they show a relative low export value of HS-Code 50-59 compared

to Turkey and Czech Republic. Nevertheless, all of these countries can be marked as countries

where European companies are (near-)sourcing from, since they show a relative high export

value of HS-Code 50-59 compared to the other CEE-countries. Furthermore, Eastern Europe,

Turkey and Northern Africa all show a slight increase (0.8%, 1%, and 0.5%, respectively) in

the share of world’s export value between 2001-2011. The summarized tables are shown

below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 141956115 100% 260630001 100%

China 12359816 8,7% 63930236 24,5%

Eastern Europe 2903080 2,0% 7279870 2,8%

Turkey 2822000 2.0% 7826770 3,0%

Northern

Africa*

246274** 0,2%

1904961 0,7%

Table 7. Export value of the group, semi-manufactures, in absolute numbers. (Unit: 1000

Dollar.) Source: made by author; statistics from International Trade Centre, 2013. * Egypt is

excluded since the statistics of Egypt are only available from 2008. ** Contains the export

value of Morocco in 2002 and the export value of Tunisia in 2001.

Exporter 2001 (= base year) 2011

World 100 183,6

China 100 517,2

Eastern Europe 100 277,1 (average)

Turkey 100 277,3

Northern Africa 100 169,8 (average)

Table 8. Export value of the group, semi-manufactures, in index value. Source: made by

author; statistics from International Trade Centre, 2013.

42

Based on table 9 and table 10 (see appendix for the detailed tables) one can conclude that for

the group, end-products, in general, Turkey, Poland, Romania, Morocco, and Tunisia are the

most relevant countries for exporting products of HS-Code 60-63. Czech Republic, Bulgaria,

Slovakia, and Egypt are important as well. However, the index value of all these countries are

showing a relative low growth of the export value of HS-Code 60-63 compared to the world

and China. Besides, Eastern Europe and Northern Africa show a slight decrease (-1.1% and -

0.4%, respectively) in the share of world’s export value between 2001-2011. The summarized

tables are shown below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 220403784 100% 496486929 100%

China 37469209 17,0% 176609357 35,6%

Eastern Europe 9740557 4,4% 16330468 3,3%

Turkey 7574804 3,4% 17134725 3,5%

Northern

Africa*

5098432** 2,3%

9395344 1,9%

Table 9. Export value of the group, end-products, in absolute numbers. (Unit: 1000 Dollar.)

Source: made by author; statistics from International Trade Centre, 2013.

* Egypt is excluded since the statistics of Egypt are only available from 2008. ** Contains the

export value of Morocco in 2002 and the export value of Tunisia in 2001.

Exporter 2001 (= base year) 2011

World 100 225,3

China 100 471,3

Eastern Europe 100 178,8 (average)

Turkey 100 226,2

Northern Africa 100 154,8 (average)

Table 10. Export value of the group, end-products, in index value. Source: made by author;

statistics from International Trade Centre, 2013.

43

From the tables 6, 8 and 10 one can observe that none of the CEE countries and Northern

African countries is showing a higher growth in export value than China for the whole

industry, the semi-manufactures, as well as the end-products (except Romania for the group,

semi-manufactures). Since I’m investigating, the clothing industry, in particular, now we’re

going to look into the group, end-products, in more detail to find out whether the growth in

export value of the CEE countries, Turkey, and Northern African countries for the group, end-

products, is higher than China’s growth or not.

44

4.2.3 Analysis of the statistics of the group, end-products, in detail From table 11 and 12 (see appendix for the detailed tables) one can observe that the CEE

countries, Turkey, and Tunisia are showing growth rates, more or less, as high as China’s

growth in export value for HS-Code 60. Also, Eastern Europe shows a slight increase (0.7%)

in the share of world’s export value between 2001-2011. Turkey shows an increase in the

share of world’s export value between 2001-2011 of 3.2%. Therefore, one can deduce from

this that near-sourcing is taking place, to a certain extent, for HS-Code 60. Summarized tables

are shown below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 14733858 100% 30648963 100%

China 1361008 9,2% 10697629 34,9% Eastern Europe 102156 0,7% 432800 1,4% Turkey 238948 1,6% 1483240 4,8% Northern

Africa* 8355** 0,1% 22273 0,1% Table 11. Export value of HS-Code 60 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

Exporter 2001 (= base year) 2011

World 100 208,0

China 100 786,0

Eastern Europe 100 767,7 (average)

Turkey 100 620,7

Northern Africa 100 315,6 (average)

Table 12. Export value of HS-Code 60 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

45

None of the CEE countries and Northern African countries shows a higher growth than China

in export value for HS-Code 61, neither does Turkey (see table 13 and 14; see appendix for

the detailed tables). Indeed, Eastern Europe, Turkey and Northern Africa show a slight

decrease (-0.5%, -0.4% and -0.3%, respectively) in the share of world’s export value between

2001-2011. Thus, the upcoming trend of near-sourcing is probably not taking place for HS-

Code 61. Summarized tables are shown below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 83496798 100% 210271265 100%

China 13455949 16,1% 80164561 38,1%

Eastern Europe 2472988 3,0% 5316977 2,5%

Turkey 3641200 4,4% 8387346 4,0%

Northern

Africa* 1214736** 1,5% 2623452 1,2%

Table 13. Export value of HS-Code 61 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

Exporter 2001 (= base year) 2011

World 100 251,8

China 100 595,8

Eastern Europe 100 250,6 (average)

Turkey 100 230,3

Northern Africa 100 149,9 (average)

Table 14. Export value of HS-Code 61 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

46

From table 15 and 16 (see appendix for the detailed tables), one cannot observe that any CEE

country is showing a higher growth in export value than China for HS-Code 62, nor does

Turkey. However, Egypt shows a growth rate, which is more or less as high as China’s

growth in export value. It should be noted that Egypt’s growth rate is between 2008-2011.

When correcting this for China, one observes that China shows a growth rate of (only) 20,2%

(index value= 120,2), which is lower than Egypt’s growth rate of 229.3% (index value=

329.3%). One can carefully deduce from this that near-sourcing is taking place, to a certain

extent, in Egypt for HS-Code 62. The summarized tables are shown below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 103260974 100% 199876913 100%

China 18952050 18,4% 63073873 31,6%

Eastern Europe 6237982 6,0% 8345858 4,2%

Turkey 2639429 2,6% 5125420 2,6%

Northern

Africa* 3772513** 3,7% 6046236 3,0%

Table 15. Export value of HS-Code 62 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

Exporter 2001 (= base year) 2011

World 100 193,6

China 100 332,8

Eastern Europe 100 143,8 (average)

Turkey 100 194,2

Northern Africa 100 203,7 (average)

Table 16. Export value of HS-Code 62 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

47

None of the CEE countries and Northern African countries shows a higher growth rate in

export value compared to China for HS-Code 63, neither does Turkey (see table 17 and 18;

see appendix for the detailed tables. However, Morocco shows a growth rate, which is nearly

comparable with China’s. It should be noted that Morocco’s growth rate is between 2002-

2011. When correcting this for China, one finds that China’s growth rate between 2002-2011

is 415,9% (index value= 515,9), which is slightly lower than Morocco’s growth rate of

417.6% (index value= 517.6%). The summarized tables are shown below.

Exporter 2001 Share of

world’s export

value in 2001

2011 Share of

world’s export

value in 2011

World 18912154 100% 55689788 100%

China 3700202 19,6% 22673294 40,7%

Eastern Europe 927431 4,9% 2234833 4,0%

Turkey 1055227 5,6% 2138719 3,8%

Northern

Africa* 102828** 0,5% 703383 1,3%

Table 17. Export value of HS-Code 63 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

Exporter 2001 2011

World 100 294,5

China 100 612,8

Eastern Europe 100 296,9 (average)

Turkey 100 202,7

Northern Africa 100 321,4 (average)

Table 18. Export value of HS-Code 63 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

48

From the statistical analysis above, one can deduce that near-sourcing is, to a certain extent,

taking place in CEE, Turkey and Tunisia for HS-Code 60, and to a certain extent in Egypt for

HS-Code 62. Since HS-Code 61 and HS-Code 62 are the two groups that contain the end-

products that we’re wearing (and this is also what I’m researching with this thesis), such as

overcoats, suits, blazers, trousers, blouses, and T-shirts, we’re going to analyze these two

groups further.

4.2.4 Graphical analysis of HS-Code 61 and HS-Code 62. The two graphs below, show how the trend of China’s and Turkey’s export value developed

during 2001-2011. Graph 1 shows the trend of the export value of HS-Code 61 and graph 2

shows the trend of the export value of HS-Code 62. It should be noted that the y-axis on the

left is for China and the y-axis on the right is for Turkey. I used two y-axis so that the trend of

the export value of the two countries could be compared better. China’s export value is much

higher than Turkey’s export value, thus, if I used only one y-axis, one wouldn’t be able to see

and compare the trend of China and Turkey, because in that case the blue line in the graph

(which is for Turkey) would be flat.

Also, please note that the values of the y-axis on the left and of the y-axis on the right differ.

The values of the y-axis on the left are ten times the values of the y-axis on the right. This is

because China’s export value is much higher than Turkey’s export value. The red line in the

graph shows the trend of China’s export value and the blue line in the graph shows the trend

of Turkey’s export value.

From graph 1 below, one can see that the trend of China’s and Turkey’s export value of HS-

Code 61 is more or less the same during 2001-2011. This means that there are no striking

changes in the pattern of where companies are producing HS-Code 61. Although, one can see

that after the decrease caused by the global financial crisis in 2007-2008, the growth of

China’s export value between 2009-2011 is slightly steeper than the growth of Turkey’s

export value between 2009-2011. This means that the production of HS-Code 61 is growing

relatively faster in China compared to Turkey. This, however, confirms what’s already shown

before in table 13 and table 14, where we’ve seen that the market share of China grew from

16.1% to 38.1% between 2001-2011, whereas Turkey’s market share decreased slightly with

0.4%, and China’s index value increased from 100 to 595.8 between 2001-2011, whereas

Turkey’s index value increased from 100 to 230.3 between 2001-2011. This reflects that, in

49

relative terms, China is more important compared to Turkey as a production location for HS-

Code 61.

Graph 1. China’s and Turkey’s export value of HS-Code 61 between 2001-2011. Source:

made by author; statistics from International Trade Centre, 2013.

From graph 2 below, one can see that the trend of China’s and Turkey’s export value of HS-

Code 62 develops more or less the same during 2001-2011. This again means that there are no

striking changes in the pattern of where companies are producing HS-Code 62. Nevertheless,

one can see that the blue line decreases slightly steeper than the red line since the global

financial crisis. This means that Turkey’s export value of HS-Code 62 decreased relatively

more compared to China’s export value of HS-Code 62. Also, after the decrease caused by the

global financial crisis in 2007-2008, the growth of China’s export value between 2009-2011 is

slightly steeper than the growth of Turkey’s export value between 2009-2011. This means that

the production of HS-Code 62 is growing relatively faster in China compared to Turkey. This

confirms what’s already shown before in table 15 and table 16, where we’ve seen that the

market share of China grew from 18.4% to 31.6% between 2001-2011, whereas Turkey’s

market share remained at 2.6%, and China’s index value increased from 100 to 332.8 between

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

90,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

China's and Turkey's export value of HS-Code 61 from 2001 to 2011

China

Turkey

50

2001-2011, whereas Turkey’s index value increased from 100 to 194.2 between 2001-2011.

This again reflects that, in relative terms, China is more important compared to Turkey as a

production location for HS-Code 62.

Graph 2. China’s and Turkey’s export value of HS-Code 62 between 2001-2011. Source:

made by author; statistics from International Trade Centre, 2013.

Based on the statistics of the textile industry, one can say, that European companies are near-

sourcing in countries like Turkey, Poland, and Czech Republic (especially for the product

group, semi-manufactures). After looking into the statistics of the end-products, separately,

one finds that near-sourcing is taking place, in a certain extent, for HS-Code 60 in CEE

countries and Tunisia; for HS-Code 62 in Egypt; and for HS-Code 63 in Morocco. When

looking to the trend of China’s and Turkey’s export value of HS-Code 61 and HS-Code 62,

one sees that the trend between the two countries is more or less the same. However, China

shows a significant growth in market share, whereas Turkey doesn’t. Based on the statistics,

China still seems to be an important production location for the clothing industry. Although,

we’ve seen that, to a lesser extent, there are some signs of near-sourcing taking place for the

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

China's and Turkey's export value of HS-Code 62 from 2001 to 2011

China

Turkey

51

end-products. But what is the impact of this phenomenon? This leads to the main research

question of this master thesis “What is the impact of near-sourcing on the port of

Rotterdam?”. In order to be able to answer this question, we must have a look into the

differences between a global supply chain and a local supply chain first, which is discussed in

the following chapter.

52

5. Global supply chain vs. local supply chain

In this chapter, the fourth sub question “What are the several types of supply chains: a supply

chain relying on global sourcing with production centered in Asia/China and a supply

chain relying on near-sourcing?” will be discussed. The definition of a supply chain, the

developments, the several types, and the differences between a global and local supply chain

will be discussed. In the following section a description will be given to show how a global

supply chain looks like as well as a supply chain adapted to practices of near-sourcing. The

differences between the both of them will be pointed out.

5.1 Definition of a supply chain A supply chain is defined as “The network of retailers, distributors, transporters, storage

facilities and suppliers that participate in the sale, delivery, and production of a particular

product.” (InvestorWords, 2012). Or as “the movement of materials as they flow from their

source to the end customer. Supply chain includes purchasing, manufacturing, warehousing,

transportation, customer service, demand planning , supply planning and Supply Chain

management. It’s made up of the people, activities, information and resources involved in

moving a product from its supplier to customer.” (Supply Chain Definitions, 2012). In other

words, a supply chain is everything what is directly or indirectly related in order to make sure

that the sources from the origin reach the end consumer at the final market as an end product.

5.2 Development of supply chains A 20th-century supply chain is less efficient, quick and accurate compared to a supply chain

we’re familiar with nowadays. In the 1990s, companies used to need 15 to 30 days to process

and deliver merchandise from warehouse inventory to a customer. A typical order-to-delivery

process looked as follows: order creation and transfer (by phone, fax, electronic data

interchange (EDI) of public mail), order processing (using manual or computer systems,

credit authorization, and order assignment to a warehouse for processing), and shipment to a

customer (Bowersox, Closs & Cooper, 2010).

53

Figure 19. A typical 20th-century order-to-delivery process. Source: adapted from Bowersox

et al. (2010)

As you can imagine, this is a lengthy process needing much more time and effort, and with

much more mistakes being made, compared to a 21st – century supply chain, leading to

inventory out-of-stock, a lost or misplaced work order, or a misdirect shipment, resulting in an

even longer total time to service customers. The time to market, therefore, is lengthy and

unpredictable. Nowadays, this might seem ridiculous to us, but this is the way how it used to

be in the past. This evolved from years of experience dating from the industrial revolution.

However, the role of consumers has been changing over time. Nowadays, we want a wide

range of product and source options, and we’re involved in the design and delivery of specific

products and services. Besides, today’s transportation is much more predictable and reliable

thanks to sophisticated information systems. In the 1990s, the e-commerce had a significant

impact on the world of commerce. Computerization, the Internet, and a range of inexpensive

information transmission capabilities made it possible to exchange information characterized

by speed, accessibility, accuracy, and relevancy (Bowersox et al., 2010). The Internet became

indispensable to complete business-to-business (B2B) transactions, and a global economy

emerged rapidly. Nowadays, we’re not limited to buy products in local stores anymore, but

we’re directly connected to firms via the Internet, and we can buy products from mostly all

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countries over the world. The emergence of the digital age must go together with excellent

supply chain management, so that, products can be manufactured to exact specifications and

delivered to customers at locations all over the world. The new way of affairs looks as

follows: delivering products at precise times (using logistical systems), performing customer

order and delivery of product assortments in hours, and delivering perfect orders according to

the expectations (thanks to the managerial commitment to zero defect/six-sigma

performance8

).

Figure 20. 21st-century supply chain management fulfilling consumers’ expectations. Source:

adapted from Bowersox et al. (2010).

As one can see, a supply chain has to be reliable, flexible, precise, efficient, and “perfect”.

However, there’s no “one perfect supply chain”. Every supply chain is unique and differs

from others, and therefore, every firm has its own supply chain. In the following section, the 4

different types of supply chains are described.

8 Six-sigma performance reflects a level of achievement having an error rate of 3.4 defects per million, or 99.99966% perfect.

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5.3 Different types of supply chains The type of supply chain depends on the nature of the company. Basically, there are 4

common models of supply chains, namely, integrated make-to-stock, build-to-order,

continuous replenishment, and channel assembly (Rebman, 2012).

The integrated make-to-stock supply chain model focuses on tracking customer demand in

real time, so that the production process can restock the finished goods inventory efficiently.

By using an information system that is fully integrated (an enterprise system), the

organization can receive real-time demand information that can be used to develop and

modify production plans and schedules. This information is also integrated further down the

supply chain to the procurement function, so that the modified production plans and schedules

can be supported by input materials (Rebman, 2012).

A company using the build-to-order model begins assembly of the customer’s order almost

immediately upon receipt of the order. This model requires careful management of the

component inventories and delivery of needed supplies along the supply chain. Many

common components across several production lines and in several locations are used to

prevent/overcome (potential) inventory problems. A benefit of the build-to-order model is the

perception that each customer is receiving a personalized product (and the customer is

receiving it relative rapidly) (Rebman, 2012).

A company using the continuous replenishment supply chain model replenishes the inventory

continuously by working closely with suppliers and intermediaries. However, if the

replenishment process involves many shipments, the cost may be too high, what results in a

collapsing supply chain. Therefore, very tight integration is needed between the order-

fulfillment process and the production process. Besides, real-time information about demand

changes is required in order to maintain the desired replenishment schedules and levels

(Rebman, 2012).

The channel assembly supply chain model is a slight modification to the build-to-order model.

In the channel assembly supply chain model, the parts of the product are gathered and

assembled as the product moves through the distribution channel. This is accomplished

through strategic alliances with third-party logistics (3PL) firms. These services may involve

either physical assembly of a product at a 3PL facility or the collection of finished

components for delivery to the customer (Rebman, 2012).

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How a supply chain of a clothing company looks like depends on the nature of the demand for

the products. Products can be divided into functional and innovative. Functional products are

having relatively longer product life cycles and a relative stable demand, and therefore,

require an efficient supply chain. Innovative products, on the other hand, are having relatively

shorter product life cycles and unpredictable demand, requiring a responsive supply chain

(Fisher, 1997). Translating this into clothes as products, one can conclude that fashion items

are innovative and basic items are functional. The type of supply chain being used, depends

on the type of product and the firm’s nature. It’s likely that an integrated make-to-stock

supply chain is used for basic items, and that a continuous replenishment model or a built-to-

order model is being used for fashion items. Besides, to decide what type of supply chain to

use depends strongly on the management agent as well. The coordination of a supply chain of

a risk averse agent differs from the coordination of a supply chain of a risk neutral agent (Gan

et al., 2011).

5.4 Differences between a global and local supply chain After understanding how a supply chain looks like, it’s more easy to explain the differences

between a global and local supply chain. Using an example of a certain company in the

clothing industry, a global supply chain looks as follows: the raw materials, suppliers, and

manufacturing are from countries all over the world (as long as one minimizes the costs).

These are, often, countries in Asia, such as China, Vietnam, and Indonesia. When the

products (T-shirts) are ready-made, they will be shipped from Asia to Europe (the final

market), so that, we (the end consumers) can buy these T-shirts in the store. In figure it will be

as follows (see figure 21 below).

Figure 21. Typical supply chain of a global sourcing clothing company; deep-sea. Source:

made by author, inspired by Kumar (2005) and Kuipers et al. (2006).

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Figure 21 is an example of a deep-sea supply chain, where transportation takes place from

Asia to Europe by ships. The number of DC’s may differ per supply chain, depending on

whether the products can bear the costs or not. There may be a DC between de textile mill and

apparel manufacturers, and between the apparel companies and wholesalers as well.

Besides, there’s a typical supply chain of a global sourcing clothing company transporting by

air (see figure 22 below). However, transporting by air is unusual in the clothing industry as it

decreases the profit margins enormously.

Figure 22. Typical supply chain of a global sourcing clothing company; air transport. Source:

made by author, inspired by Kumar (2005) and Kuipers et al. (2006).

Next to deep-sea, there are two other alternatives of a supply chain, which are short-sea and

“no-sea” (rail, road). These two alternatives are more applicable to a local supply chain.

A local supply chain, on the other hand, is not using raw materials, suppliers, and

manufactories all over the world. Instead, they should be as close to the final market as

possible to assure on time delivery and reliability. Therefore, the main difference between a

global and a local supply chain is the shipment from Asia to Europe, which lacks in the case

of a local supply chain.

In a global supply chain, the offshore facility focuses on cost efficiency, whereas in a local

supply chain, the near shore facility has a quick response capability and guarantees high

service (Allon & Van Mieghem, 2010). It should be noted that when using a global supply

chain, one should take several difficulties into account, such as, overall costs (costs of space,

tariffs, and other expenses related to doing business overseas), the exchange rate, time

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(clearance time and other governmental red tape), and the weather conditions (Epiq, 2012).

Besides, when using a global supply chain, one must make decisions about the number of

suppliers to use. Fewer supplies may be easier to manage but could also lead to potential

problems if one vendor is unable to deliver as expected or if one vendor tries to leverage its

supply power to obtain price concessions (Epiq, 2012). However, many companies are using

both models (combination of global supply chain and local supply chain) in order to benefit

an optimized level of efficiency, benefits, and costs. Zara, for example, is using a combination

of both models.

It might also happen that a clothing company produces its fashion items in Turkey, for

instance, and sells them in the Netherlands. The firm may consider to transport the fashion

items by feeder ships, which arrive at the port of Rotterdam. In this case, the company uses a

short-sea supply chain, which is shown below in figure 23. Again, this is just an example of

how a short-sea supply chain may look like, the number of DC’s may differ per supply chain,

depending on the company’s decisions.

Figure 23. Typical supply chain of a clothing company sourcing from Turkey and using the

port of Rotterdam; short-sea. Source: made by author; inspired by Kumar (2005) and Kuipers

et al. (2006).

Another scenario might be that the clothing company produces its fashion items in Poland and

sells them in the Netherlands. Now, the firm might consider to transport the products by truck

or by train (no-sea). In this scenario, there won’t be any contact with the port of Rotterdam. In

figure, an example of a supply chain of a local sourcing clothing company, using rail or road

(no-sea) is as follows (see figure 24 below). Also here, the number of DC’s may differ.

59

Figure 24. Typical supply chain of a local sourcing clothing company; no-sea. Source: made

by author; inspired by Kumar (2005) and Kuipers et al. (2006).

Thus, the main difference between a global supply chain and a local supply chain is whether

having the shipment from China to Europe or not. A global supply chain contains the

shipment from China to Europe and is characterized by a longer distance, less flexible, longer

lead times, less reliable, lower labour costs, higher transportation costs, and many hidden

costs. A local supply chain doesn’t contain the shipment from China to Europe and is

characterized by a shorter distance, flexibility, shorter lead times, relative lower transportation

costs, and reliability.

5.5 Global supply chain or local supply chain? We’ve seen 4 different types of supply chains (deep-sea, transport by air, short-sea and no-

sea). The supply chain being used, depends totally on the firm’s decisions. This, again,

depends on the nature of the product. A fashion item is more likely to be produced in Europe,

since it has a short product life cycle. When it turns out that there’s a high demand for the

fashion item, it’s likely that more of these items will be produced and it can be send quickly

from Europe to the Netherlands. Of course, when producing these fashion items in China,

they can be send quickly as well (by air), but air shipment is much more expensive than sea

shipment, and therefore, increases the costs enormously. However, according to Kumar

(2005), the benefits of sending these fashion items by air in order to ensure 100% availability

during the peak season, offset the cost of air shipment. Automatically, it’s more likely that

basic items, which never goes out of style and are sold year to year, are produced in a low-

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cost country in Asia.

This, also, fits with what Kuipers & Eenhuizen (2004) found. Based on a survey of possible

logistics structures, they found that the following 6 factors are of prime importance in the

design of a particular logistics structure:

1. Market power, based on the relation between the different parties in the supply chain.

2. The practical value of a product with respect to the shelf life of the products.

3. Uncertainty in demand.

4. The degree of specialisation of product and production processes.

5. The cost-level.

6. The logistics focus.

The cost level and the practical value of the goods were indicated as the two most important

factors for the design of the logistics structure. Citing Kuipers & Eendhuizen (2004):

“When a product possesses a high practical value and the shelf life is very short –

because the product is fashionable or because of the risk of decay – the logistics

structure is characterised by high reliability, high responsiveness, short lead times

and a high degree of flexibility. This asks for a decentralised logistics structure close

to the different market areas. The characteristics of seaport-based logistics parks

located within the port area are the opposite: a low practical value, a long shelf life

and a centralised logistics structure.”

This, however, is also applicable to a clothing company when deciding to produce in Europe

or in China. It’s already stated that fashionable products need a reliable, responsive, and

flexible logistics structure with short lead times, and which is close to the market area. This

fits with what’s mentioned before, that fashion items should be produced in Europe and basic

items in Asia.

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From figure 25 below one can see that fashion items with a short shelf life and a high

practical value needs a reliable, responsive and flexible logistics structure. This is only

possible when using a local supply chain (or a global supply chain combined with air

shipment, which increases the costs enormously).

Figure 25. Practical value of a product with respect to the shelf life of the products. Source:

Kuipers & Eenhuizen (2004).

Reliability High frequency

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Fan (2011), used factor 5 (the cost-level; see figure 26 below) of Kuipers and Eenhuizen

(2004) to show that products with a low value density and a low package density are more

likely to use a shorter logistics structure as these products cannot bear the higher supply chain

costs in each stop of the supply chain.

Figure 26. The cost-level of a product based on the value-density and the packing-density.

Source: adapted from Kuipers & Eenhuizen (2004) and Fan (2011).

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As one can see from figure 27 below, the logistics structure of a product with a high value

density and high packing density is on the left, and the logistics structure of a product with a

low value density and a low packing density is on the right. It’s obvious that the first is a

fashion item, and that the latter is a basic item. The logistics structure on the left uses an

European distribution center (EDC) and regional distribution center (RDC), and the logistics

structure on the right don’t use EDC’s and RDC’s, because basic items (with a low value

density and a low package density) cannot bear the higher supply chain costs in each stop

within the total supply chain (Fan, 2011).

Figure 27. Simplified traditional clothing logistics structure from China to Europe. Source:

adapted from Fan (2011).

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Kumar (2005) indicated this as well. He states that there’s a trade-off between transportation

lead times and labour costs. Also, he states that Eastern European countries ensure proximity

to the customer at higher labour costs, and, that China provides cheap labour, but with much

longer lead times. Therefore, fashion products with a higher margin and shorter life cycles

should be sourced from Eastern European countries, and basic products with lower margins

should be sourced from China (see figure 28 below).

Figure 28. Sourcing model for a typical European Apparel retailer. Source: adapted from

Kumar (2005).

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However, it should be noted that (as mentioned before) wages in China have been increasing

a lot, and in Eastern Europe the wages are not much higher than China. Besides, the cost

savings of China’s lower labour costs are offset by the hidden costs of global sourcing.

Verweij (2009) showed that the real cost savings of global sourcing are only 5% (see figure

29 below).

Figure 29. Hidden costs and real cost savings of global sourcing. Source: Verweij (2005).

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In addition to the cost savings, the lead time and reliability are important as well for the

clothing industry. Kuipers et al. (2006) found that reliability of the lead time is very important

for the product group, clothing. Clothes belong to one of the product groups (together with

internet products, fresh food, and car accessories) with the highest sensitivity for the

reliability of lead times. However, there are substantial adjustments (operational, tactical, and

strategic adjustments), which can increase the reliability of the lead times. Kuipers et al.

(2006) showed that carriers and shippers can increase the reliability of the lead times by, for

instance, restructuring the network, outsourcing transport, and strategic in-sourcing of DC’s

and other critical logistics functions. They also showed a typical supply chain of a clothing

company, Zara, which produces its products in Europe. This is shown in figure 30 below.

Figure 30. Supply chain of Zara. Source: Kuipers et al. (2006).

Production

Supply of raw materials

Cross-docking EDC retailer

Store

The Netherlands Elsewhere in Europe

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6. The port of Rotterdam

In this chapter some background information about the port of Rotterdam will be given in

order to better understand the following sections where the impact of near-sourcing on the

port of Rotterdam will be analyzed.

6.1 General information about the port of Rotterdam The port of Rotterdam is located at the mouth of the river Rhine, it has excellent hinterland

connections and adequate capacity and infrastructure. Also, there are many companies and

organizations active in the port and industrial complex. Therefore, the port of Rotterdam

functions as a gateway to the rest of Europe, with an annual throughput of about 430 million

tons, reaching 350 million consumers. The port stretches out about 40 kilometers and is about

10.500ha excluding Maasvlakte II (and 11.500ha including Maasvlakte II) (Port of Rotterdam

Authority, 2012).

6.1.1 General information about Maasvlakte II As more and more goods are shipped through the port of Rotterdam, and a growing number of

companies want to set up their business here, the existing port and industrial area, however, is

quickly running out of space. It’s expected that around 2012 - 2014 there will no longer

be any large sites left. Thus, expansion is essential for the port to meet the rising

demand in future and to maintain its leading role. If the port fails to grow, it might happen

that shipping companies will pass Rotterdam by in the future. As a result, the Maasvlakte II

has been constructed. It’s a direct extension of the existing Maasvlakte and has access to all

its connections with the European hinterland. Maasvlakte II created a new top location in the

heart of the European market, with 1,000ha of space for deep sea related container

transshipment, distribution and chemical industry. These sectors have a great interest in the

industrial sites on the deep waterways of Maasvlakte II. The port of Rotterdam is the only port

in Europe where the largest ships in the world can moor 24 hours a day (Port of Rotterdam

Authority, 2012).

Naturally, the future of the port depends not only on its position on the market. The quality of

life and concern for the environment are as important as strengthening Rotterdam’s position

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as a mainport. A 750ha recreation area and sites of natural interest has also been created and

the nature that is lost as a result of the construction of Maasvlakte II is compensated with the

creation of a sea bed protection area reservation (formerly sea reserve) and the enlargement of

the dune area (Port of Rotterdam Authority, 2012).

6.1.2 General information about the throughput of the port of Rotterdam As I’m investigating the impact of near-sourcing on the port of Rotterdam with this master

thesis, it’s important to note the several types of cargo going in and out the port of Rotterdam.

The main cargo type going in the port of Rotterdam is liquid bulk with a total throughput of

154,095 thousand metric tons (gross weight) in 2011. Followed by dry bulk with a total

throughput of 79,448 thousand metric tons, containers 61,394 thousand metric tons, and

breakbulk 13,827 thousand metric tons in 2011 (Port of Rotterdam Authority, 2012). Besides,

the main cargo type going out the port of Rotterdam is containers with a total throughput of

62,162 thousand metric tons (gross weight) in 2011. This is followed by the cargo type liquid

bulk with a total throughput of 44,430 thousand metric tons, breakbulk 11,316 thousand

metric tons, and dry bulk 7,878 thousand metric tons in 2011 (Port of Rotterdam Authority,

2012). From the figures one can conclude that the port of Rotterdam functions as a transit port

as regards to the cargo type containers. This is relevant as we’re investigating the supply

chain of clothing, and since clothes are always transported in containers. The importance of

container transport is increasing. In 2007, more than 11% of the imported goods were

transported in container ships compared to only 5% in 1992. The average annual growth in

container transport is more than 10% since 2002 (Statistics Netherlands, 2012).

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7. The impact of near-sourcing on the port of Rotterdam in theory and figures

The last sub question “How is the clothing chain influencing the port of Rotterdam by near-

sourcing?” will be discussed. From a logical sense, one can say already without further

investigation that there’s a certain influence on the port of Rotterdam, caused by companies

that are producing in Europe (instead of Asia). But the question remains: to what extent? Are

those companies that are near-sourcing transporting their products to the final market by road,

rail or feeder? Will they use the port of Rotterdam to reach the end consumer using its

excellent hinterland connections? Or will they transport their products directly from, for

example Turkey, to the end consumer (via the Black Sea and the river Danube for instance),

without any interaction with the port of Rotterdam? In this chapter we’re going to find out, in

theory and in figures, what the impact on the port of Rotterdam is caused by companies that

are near-sourcing.

7.1 The impact of near-sourcing companies on the port of Rotterdam in

theory As mentioned in previous sections, the port of Rotterdam is functioning as a gateway to

Europe. Before, goods were being produced in Asia, afterwards, being shipped (mainly in

containers) to Rotterdam, and at the end distributed to many countries in Europe (the

hinterland). Now, there’s an emerging trend that goods are being produced in CEE, Turkey or

Northern Africa instead of Asia, because of the rising wages and other costs related to a

lengthy supply chain. As a result, one can imagine, that when goods are produced in CEE

instead of Asia, it might happen that they won’t reach the port of Rotterdam any longer, since

it’s unnecessary to ship the goods from Asia to Rotterdam anymore. Since, now, products are

produced in CEE, they can reach the final markets by rail, road, and feeder as well.

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As one can see from figure 31, clothes being produced in Turkey, Poland, Bulgaria or

Romania can reach the rest of Europe easily by all three types of transport modes without any

interaction with the port of Rotterdam.

Figure 31. Map of Europe. Source: Geographic Guide (2013).

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Figure 32 shows the Trans-European Transport Network (TEN-T) and TEN-T priority

projects within Europe. From this map we can see that the road, rail, air, and water transport

networks in Europe are excellent.

Figure 32. Trans-European Transport Network and TEN-T priority projects. Source: Eurostat (2012)

Furthermore, from figure 33 (see appendix) we can see that Europe has many rivers. The two

most important rivers in Europe are, the Rhine and Danube (BBC, 2013). From the North Sea

or the Black Sea, one can reach the hinterland easily using these two rivers. The Rhine and

Danube reaches several countries, including: the Netherlands, Germany, France,

Liechtenstein, Austria, Switzerland, Hungary, Romania, Moldova, Croatia, Serbia, Slovakia,

Bulgaria, and Ukraine. Thus, using feeder transport, one can already reach the majority of the

European countries. Adding the railway and roadway, one can reach any corner in Europe

(see figure 34 in appendix). Based on the decisions that companies make, they may or may

not use the port of Rotterdam. Many other factors may play a role as well. Where are the

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products produced? Where will it be sold? What are the costs of transporting by road? What

are the costs of transporting by rail? What are the costs of transporting by feeder? And even

the weather condition may play a role. It seems logical, that, clothes being produced in

Poland, and, being sold in Germany won’t be transported via the port of Rotterdam, but will

be transported directly to Germany by trucks or trains or maybe feeder ships (depending on

the locations where the products are produced and sold, and depending on the conditions of

the hinterland connections).

7.2 The impact of near-sourcing companies on the port of Rotterdam in

statistics Now, we are going to look into the statistics of the Port of Rotterdam Authority (2012) to find

out if the port of Rotterdam has experienced any possible impact of companies that are near-

sourcing. The statistics contains the number of TEU’s by origin from 2006-2010 at the port of

Rotterdam. However, my own simple calculations by hand using these statistics, do not show

a decline in the share of TEU’s from Asia of the total TEU’s in the port of Rotterdam.

Contrary, it shows an increase from 43% in 2006 to 47.9% in 2010 (an increase of 11.4%).

Looking to China, merely, the share of TEU’s in 2006 has increased from 15.9% of the total

of TEU’s in Rotterdam to 22.5% in 2010 (an increase of 6.6%). However, the share of TEU’s

from Hong Kong declined from 5.2% in 2006 of the total of TEU’s in Rotterdam to 4.3% in

2010 (a decrease of 0.9%). One should keep in mind that the port of Hong Kong has been

functioning as a gateway to China for the rest of the world, and that the throughput of the port

of Hong Kong concerns, mainly, re-exports. However, since the percentage of Hong Kong is

neglectable, I won’t consider the percentage change of Hong Kong, but one may just keep that

in mind as a part of the whole picture.

But what does the increase of 6.6% of China’s TEU’s in Rotterdam mean? It says that in

2006, 15.9% of the TEU’s in the port of Rotterdam are from China, and that in 2010, 22.5%

of the TEU’s in the port of Rotterdam are from China. This increase of 6.6% may have two

reasons: (1) The number of TEU’s from China has increased relatively, because more

products are produced in China and transported to Europe via the port of Rotterdam (and the

number of TEU’s from the rest of the world is more or less stable; or (2) The number of

TEU’s from China are more or less stable, but the number of TEU’s from the rest of the world

has decreased relatively.

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To find out what the reason is, we’re going to look into the statistics of the clothing industry

between 2006 – 2010 to find out whether the number of TEU’s containing clothes has

increased relatively or not, and second, we’re going to look into the number of TEU’s of other

CEE countries, Turkey, and Northern African countries. Based on the statistics of the clothing

industry (HS-Code 50-63) from chapter 4, I made my own calculations and found that the

export value of the semi-manufacturers (HS-Code 50-59) has increased with, average, 61.3%

from 2006 to 2010, and that the export value of the end-products (HS-Code 60-63) has

increased with, average, 55.8%. As one can see, the export value of clothes has increased

relatively more than the number of TEU’s. Since clothes are always transported by containers,

since the major part of the clothes being produced in China are exported to the US or Europe,

and since the average selling prices of clothes have decreased (price deflation) (Kumar, 2005),

one may deduce from this that, ceteris paribus, the number of TEU’s in Rotterdam from China

should be higher than (only) 6.6% as one can see that the export value of the semi-

manufacturers increased with average 61.3% and the end-products with average 55.8%.

Now, we’re going to look into the statistics of CEE countries, Turkey, and Northern African

countries. Based on my own calculations, using the figures from the Port of Rotterdam

Authority (2012), one can see that the share of Africa has increased from 3% in 2006 of the

total TEU’s of Rotterdam to 3.3% in 2010 (an increase of 0.3%). However, the share of

Europe has decreased from 37.9% in 2006 of the total TEU’s in Rotterdam to 35.3% in 2010

(a decrease of 2.6%). However, when consider the countries separately, the results are as

following: Turkey 2006 (0.2%) and 2010 (0.1%), Poland 2006 (0.1%) and 2010 (1.3%),

Morocco 2006 (0.5%) and 2010 (0.6%), Egypt 2006 (0.8%) and 2010 (0.8%). As one can see,

the statistics are neglectable. However, the statistics of Turkey are notable, since Turkey has a

relative high export value (as we saw in chapter 4), but the number of TEU’s in the port of

Rotterdam is relatively small (and also declining). This may point out that clothes being

produced in Turkey are not being transported to the hinterland via the port of Rotterdam

(which is logical as the products can be transported by road as well to reach the hinterland).

However, to confirm the impact on the port of Rotterdam caused by clothing companies that

are near-sourcing, I interviewed 4 supply chain managers and 1 branch manager of clothing

companies in the Netherlands. The results of these interviews are discussed in the next

chapter.

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8. Results of the interviews

In this chapter the results of the interviews are discussed. I interviewed supply chain managers

and branch managers of 5 clothing companies located in the Netherlands. Information will be

given about how their supply chain looks like, what the developments and changes of their

supply chain will be, and whether near-sourcing is an important strategy for their supply chain

or not. These 5 clothing companies are selected, because these are well-known large firms in

the Netherlands and together they may represent a large part of the clothing industry in the

Netherlands. The names of the managers and the clothing companies will not be provided as

we agreed that everything remains anonymous.

Company A

The products of company A are mainly from Asia and arrive at the port of Rotterdam by ship.

Now and then, company A will transport fashion sensitive products by air that arrives at the

airport of Düsseldorf. Fashionable products have a relative short product life cycle, thus these

products must arrive more rapidly. Although the majority of the products are from Asia, some

products of company A are from Europe as well. Products from European countries, such as

Turkey and Poland are always transported by truck. Besides, some products are produced

locally. Company A has been working with this structure for more than 20 years.

Company A has several offices in China and Bangladesh and that makes it easier to approach

the suppliers about quality issues. Moreover, the monitoring of the products takes place in an

earlier stage of the supply chain. This leads to a higher quality of the products and a more

efficient supply chain. Quality and price are factors that are relevant for the clothing industry.

According to the branch manager of company A, in the past many companies moved from

Europe to Asia, because of the lower wages in Asia. However, the branch manager indicates

that this is changing. Many Chinese companies are moving to Italy and are taking over

clothing companies that sell fashionable products especially.

The branch manager of company A thinks that near-sourcing won’t be a relevant strategy

within the supply chain of company A, since they have a few new offices in China and

Bangladesh that fosters the state of affairs and leads to a more efficient supply chain.

Although some products are from European countries, such as Turkey and Poland, the branch

manager believes that they will keep importing the majority of their products from China.

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Company B

The products of company B are mainly from China and Bangladesh and arrive at the port of

Rotterdam by ships. Only in exceptional cases, the products are transported by air. The

products that are transported by air are normally fashion sensitive products or products that

must arrive earlier unexpectedly. Transportation by air is unusual in the clothing industry,

because this increases the costs and eliminates the profit margins. A small portion of the

products are from Turkey or the Czech Republic and are always transported by trucks.

Company B is working with this structure for more than 10 years.

According to the supply chain manager of company B, the supply chain will be more efficient

by pre-packing the products in Bangladesh. By doing this, one will lower the costs

enormously. Packaging won’t take place in the Netherlands anymore, but in Bangladesh, and

the wages in Bangladesh are much lower than in the Netherlands. The wages in Asia have

been increasing, however, the supply chain manager of company B indicates that the wages in

Asia are still much lower than in Europe. Moreover, according to the supply chain manager of

company B, a problem as the language barrier is something that will remain forever. One

should consider whether the extra costs caused by errors can be offset by the lower labour

costs when producing in China or Bangladesh.

Furthermore, the supply chain manager of company B indicates that near-sourcing is not a

relevant strategy within the supply chain of company B at this moment. The products of

Company B will keep being produced in Asia, because the wages in China are still much

lower than in Europe. However, the supply chain manager of company B believes that it

might happen that the production location of their products may move from China to Europe

in the next 10 years.

76

Company C

The products of company C are mainly from China and arrive at the port of Rotterdam by

ships. Only in exceptional cases, products from China will be transported by air. When the

production process is delayed or when company C needs the products urgently, the products

will be transported by air. Next to China, Turkey is a fairly important country as production

location for company C as well. The products from Turkey are normally transported by

trucks, and only in exceptional cases the products will be transported by air. Products from

Turkey are never transported by ship as it’s faster and cheaper to transport them by trucks.

Company C has been working with this structure for about 10 years.

According to the supply chain manager of company C, the distribution of the countries where

the products will be produced, may change considering the costs and lead times. The

production costs of China are suddenly much higher than what company C is used to.

Therefore, it becomes interesting to look for alternatives. Countries that are located near the

final market might be an option. Every country has its advantages and disadvantages as

location for the production. Therefore, one should distribute the production over several

countries. Some products should be produced in low-wage countries and some products

should be produced near the final market.

The supply chain manager of company C indicates that near-sourcing is a relevant strategy

within the supply chain of company C. When deciding to produce in a certain country, there

are various reasons related to this. One should find an optimal distribution of countries where

the products are produced, and near-sourcing is certainly part of this optimal distribution.

Moreover, the supply chain manager of company C states that companies that used to produce

in Asia are now moving a part of their production near the final market because of the

increasing production costs in China and because of the longer lead times.

77

Company D

The products of company D are mainly from China and Bangladesh and arrive at the port of

Rotterdam by ships. The products will be transported by air when “Quick Delivery” is

needed. Next to fashion sensitive products, sometimes basic products are transported by air as

well. Often, something goes wrong (in particular quality issues) in the production process in

China and that causes company D to transport the products by air.

Some products of company D are from Turkey and are always transported by trucks. Products

from Turkey are never transported by air, because this will increase the costs enormously.

Moreover, from Turkey to the Netherlands it takes 5 days when transporting by truck and 3

days when transporting by air. According to the supply chain manager of company D, one

should be able to schedule this as it takes only 5 days. Thus, there’s no reason to transport

products from Turkey by air. Company D has been working with this structure for 20 years.

The supply chain manager of company D declares that there’s a shift of the countries where

products are being produced. There’s a shift to Bangladesh and Turkey as production location

for the products of company D, because the production costs in China keeps increasing.

Now, circa 80% of the products are from China and circa 15% of the products are from

Turkey. Within the next 5 years the share of Turkey will increase with 40% of the total

purchase value. The reason for this is that Turkey is closer to the final market (thus, the lead

times are shorter) and company D found a few good suppliers in Turkey. Furthermore, the

supply chain manager of company D states that “speed” is crucial in the clothing industry

since customers are more capricious than before. One cannot estimate beforehand whether a

certain product will become a hot item or not, and one should be able to react quickly when a

certain product becomes a hot item. When producing in China, one can react quickly as well,

but then the products must be transported by air. Although, the profit margin will decrease

when transporting by air, but probably this can be offset by the lower labour costs in China

compared to Europe.

The concept of “Quick Delivery” is relevant for the supply chain of company D. It’s

important that one is able to produce in short-term so that company D can react quickly to the

market. This declares why the production of company D shift partly to Turkey. When

producing in Turkey, the lead times are much shorter.

78

Company E

Circa 80% of the products of company E are from China and circa 20% of the products are

from Turkey. About 85% of the products from China are transported by ships and 15% of the

products are transported by air. The products of company E are transported by air when the

products must arrive in the Netherlands urgently.

The products from Turkey are always transported by trucks. There’s a distinction between

“slow trucks” and “fast trucks”. When the products must arrive in the Netherlands urgently,

company E will use “fast trucks” to transport the products. This means that there will be two

drivers, who are driving one truck, so that less stops are made and the products arrive faster in

the Netherlands. Company E has been working with this structure for 10 years.

According to the supply chain manager of company E, there’s a shift of companies moving

the production to low-wage countries. It takes many years prior to such a shift develops and

appears. What the next upcoming low-wage country will be, depends on the economic trends

and that is hard to predict. In addition, the business model of the company plays a role as well

when deciding where to produce the products. Next to the low labour costs, one considers

whether a country has a sufficient supply of raw materials and semi-manufactures as well.

Besides, the manufacturers in that country should be able to produce quickly in short-term.

The supply chain manager of company E believes that near-sourcing is not that relevant

within the supply chain of company E. The quality of the product is the most relevant for

company E, when deciding a country as production location. Next to the quality of the

products, the lead times plays a role as well.

79

9. Conclusion

After conducting a literature review, statistical analysis of the textiles & clothing industry, and

interviews with 4 supply chain managers and 1 branch manager, I’ve come to the end of this

thesis to answer the research question:

“Does the emergence and growing importance of near-sourcing have an impact

on the port of Rotterdam?”

In this thesis, near-sourcing is defined as:

“Managing the supply chain in such a way that the production is taking place near the

final market with emphasize on reducing the distance in sourcing strategies, reducing

the “hidden” costs, and increasing the flexibility of the supply chain”.

Based on the literature review of scientific papers, articles and newspapers, one finds that

there’s indeed an emergence of near-sourcing. Companies that used to produce in China

moved part of their production to Europe. The reason for this is that companies faced several

issues, such as quality issues, increasing wages in China, longer lead times, and inflexibility

of the supply chain. During this thesis, I focused on the clothing industry as I believe that

near-sourcing is relevant for, in particular, the clothing industry. An explanation for this is

that when a certain T-shirt with a certain print turns out to be a hot item, the clothing

companies should be able to react quickly on the demand and more of these T-shirts should be

produced and transported to the Netherlands. However, it takes 6 weeks to ship these T-shirts

from China to the Netherlands. The only possible solution is to transport these T-shirts by air,

but this increases the costs enormously. A perfect alternative is: near-sourcing.

When clothing companies are producing in countries near the final market, such as CEE

countries or Turkey, it takes about 5 days to transport the products by truck to the

Netherlands. Although the statistics of the textiles & clothing industry are not supporting my

beliefs that near-sourcing is taking place in the clothing industry, the results of the interviews

with the supply chain managers and branch manager of 5 clothing companies in the

Netherlands are more promising. The statistics of the textiles & clothing industry shows that

in all cases, China has a higher export value of the HS-Codes and a higher share of the

world’s export value than the CEE countries, Turkey, and the Northern African countries. An

80

explanation for this may be that the trend of near-sourcing is fairly recent, and therefore, the

upcoming trend of near-sourcing isn’t visible in the statistics yet. The trend of near-sourcing

may be visible in the statistics after 10 years. However, the results of the interviews are more

promising.

The products of the concerned clothing companies are mainly from China, but a certain part

of the products are from Turkey. Company A indicated that near-sourcing won’t be a relevant

strategy within its supply chain. Company A believes that it will keep importing products

from China, because the wages in China are still lower than in Europe. Company B indicated

that near-sourcing might be a relevant strategy within its supply chain after 10 years.

Company C indicated that near-sourcing is a relevant strategy within their supply chain and

that it’s important to produce some products near the final market as well. Company D is

using the “Quick Delivery” concept, which matches with the advantages of near-sourcing.

Besides, the supply chain manager of company D stated that the share of Turkey as country

where the products are produced, will increase with 40% of the total purchase value.

Company E doesn’t exclude that near-sourcing may be a relevant strategy within its supply

chain as the quality of the products and the lead times are the most relevant factors.

Based on the interviews, I found in all cases that when the products are from Turkey,

companies will never transport the products by ships, because it’s faster and cheaper to

transport them by trucks. This has a certain impact on the port of Rotterdam. The lure of

China that attracted many companies to move their production to China has been the low

labour costs. However, as the wages in China keeps increasing, in the future there won’t be

any cost advantage anymore for companies producing in China. When CEE countries and

Turkey start replacing China as production location, the amount of containers from China to

the port of Rotterdam will decrease. Moreover, the products being produced in CEE and

Turkey are always transported by trucks, because it’s faster and cheaper. Also, companies

start moving a part of their production to Europe, because of the longer lead times and

inflexibility of global sourcing. Thus, in any case, the port of Rotterdam will lose a certain

part of throughput caused by near-sourcing companies. In chapter 7, we’ve seen that the

number of TEU’s in Rotterdam from Europe decreased with 2.6% between 2006-2010. Up to

now, the statistics are not showing a huge impact yet, but ten years from now that may be

another story.

81

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Appendix

Figure 1. Share of national imports of main world traders in world imports (in percentage),

2000-2010 (Eurostat, 2012).

88

Figure 2A. Intra-EU27 trade by product, 2006-2010 (Eurostat, 2011).

89

Figure 2B. Intra-EU27 trade by product (continued), 2006-2010 (Eurostat, 2011).

90

Figure 5. Main trading partners of the 27 EU-countries, (Eurostat, 2011).

91

Figure 6. Detailed statistics with regard to HS-Code 50. Source: International Trade Centre,

2013. (Unit: 1000 US Dollar).

* percentage change between 2004-2011.

** percentage change between 2002-2011.

92

Figure 7. Detailed statistics regarding to HS-Code 51. Source: International Trade Centre,

2013. (Unit: 1000 US Dollar).

* percentage change between 2002-2011.

93

Figure 8. Detailed statistics regarding to HS-Code 52. Source: International Trade Centre,

2013. (Unit: 1000 US Dollar).

* percentage change between 2003-2011.

** percentage change between 2002-2011.

94

Figure 9. Detailed statistics regarding to HS-Code 53. Source: International Trade Centre, 2013. (Unit:

1000 US Dollar).

* percentage change between 2004-2011. ** percentage change between 2006-2011.

*** percentage change between 2002-2011.

95

Figure 10. Detailed statistics regarding to HS-Code 54. Source: International Trade Centre, 2013.

(Unit: 1000 US Dollar).

* percentage change between 2003-2011. ** percentage change between 2005-2011.

*** percentage change between 2002-2011.

96

Figure 11. Detailed statistics regarding to HS-Code 55. Source: International Trade Centre,

2013. (Unit: 1000 US Dollar).

* percentage change between 2003-2011. ** percentage change between 2002-2011.

97

Figure 12. Detailed statistics regarding to HS-Code 56. Source: International Trade Centre,

2013. (Unit: 1000 US Dollar).

* percentage change between 2004-2011. ** percentage change between 2003-2011.

*** percentage change between 2005-2011. **** percentage change between 2002-2011.

98

Figure 13. Detailed statistics with regard to HS-Code 57. Source: International Trade Centre, 2013.

(Unit: 1000 US Dollar).

* percentage change between 2002-2011. ** percentage change between 2003-2011.

*** percentage change between 2006-2011. **** percentage change between 2005-2011.

***** percentage change between 2008-2011. ****** percentage change between 2002-2011.

99

Figure 14. Detailed statistics regarding to HS-Code 58. Source: International Trade Centre, 2013. * percentage change between 2005-2011. ** percentage change between 2003-2011. *** percentage change between 2005-2011. **** percentage change between 2008-2011. ***** percentage change between 2002-2011.

100

Figure 15. Detailed statistics regarding to HS-Code 59. Source: International Trade Centre, 2013. * percentage change between 2003-2011. ** percentage change between 2005-2011. *** percentage change between 2008-2011. **** percentage change between 2002-2011.

101

Figure 16. Detailed statistics regarding to HS-Code 60. Source: International Trade Centre, 2013. * percentage change between 2003-2011. ** percentage change between 2005-2011. *** percentage change between 2002-2011.

102

Figure 17. Detailed statistics regarding to HS-Code 61. Source: International Trade Centre, 2013. * percentage change between 2003-2011. ** percentage change between 2006-2011. *** percentage change between 2005-2011. ****percentage change between 2008-2011. ***** percentage change between 2002-2011.

103

Figure 18. Detailed statistics regarding to HS-Code 62. Source: International Trade Centre, 2013. * percentage change between 2003-2011. ** percentage change between 2006-2011. *** percentage change between 2005-2011. ****percentage change between 2008-2011. ***** percentage change between 2002-2011.

104

Figure 19. Detailed statistics regarding to HS-Code 63. Source: International Trade Centre, 2013. * percentage change between 2003-2011. ** percentage change between 2006-2011. *** percentage change between 2005-2011. ****percentage change between 2008-2011. ***** percentage change between 2002-2011.

105

Exporter 2001 2011

World 362359899 757116930

China 49829025 240539593

Eastern Europe 12643637 23610338 Belarus 776004 1460381

Bulgaria 1060462 2416688

Czech Republic 1905712 4172154

Hungary 1688225 1789682

Poland 2759980 5939258

Romania 2979045 4899339

Slovakia 859986 2068987

Ukraine 614223 863849

Turkey 10396804 24961495

Northern Africa* 5344706** 11300305 Egypt 1764177 (Year: 2008) 3228621

Morocco 2549245 (Year: 2002) 4297853

Tunisia 2795461 3773831

Table 5. Export value of the group, whole textile industry, in absolute numbers. (Unit: 1000

Dollar). Source: made by author; statistics from International Trade Centre, 2013. * Egypt is

excluded since the statistics of Egypt are only available from 2008.

** Contains the export value of Morocco in 2002 and the export value of Tunisia in 2001.

106

Exporter 2001 (= base year) 2011

World 100 208,9

China 100 482,7

Eastern Europe 100 187,7 (average) Belarus 100 188,2

Bulgaria 100 227,9

Czech Republic 100 218,9

Hungary 100 106,0

Poland 100 215,2

Romania 100 164,5

Slovakia 100 240,6

Ukraine 100 140,6

Turkey 100 240,1

Northern Africa 100 162.2 (average) Egypt 100 (base year: 2008) 183,0

Morocco 100 (base year: 2002) 168,6

Tunisia 100 135,0

Table 6. Export value of the group, whole textile industry, in index value. Source: made by

author; statistics from International Trade Centre, 2013.

107

Exporter 2001 2011

World 141956115 260630001

China 12359816 63930236

Eastern Europe 2903080 7279870 Belarus 466010 846938

Bulgaria 110699 389370

Czech Republic 1009327 2264628

Hungary 339184 704757

Poland 462633 1370101

Romania 163689 997668

Slovakia 243896 599324

Ukraine 107642 107084

Turkey 2822000 7826770

Northern Africa* 246274** 1904961 Egypt 712131 (Year: 2008) 1539151

Morocco 108818 (Year: 2002) 142178

Tunisia 137456 223632

Table 7. Export value of the group, semi-manufactures, in absolute numbers. (Unit: 1000

Dollar.) Source: made by author; statistics from International Trade Centre, 2013. * Egypt is

excluded since the statistics of Egypt are only available from 2008. ** Contains the export

value of Morocco in 2002 and the export value of Tunisia in 2001.

108

Exporter 2001 (= base year) 2011

World 100 183,6

China 100 517,2

Eastern Europe 100 277,1 (average) Belarus 100 181,7

Bulgaria 100 351,7

Czech Republic 100 224,4

Hungary 100 207,8

Poland 100 296,2

Romania 100 609,5

Slovakia 100 245,7

Ukraine 100 99,5

Turkey 100 277,3

Northern Africa 100 169,8 (average) Egypt 100 (base year: 2008) 216,1

Morocco 100 (base year: 2002) 130,7

Tunisia 100 162,7

Table 8. Export value of the group, semi-manufactures, in index value. Source: made by

author; statistics from International Trade Centre, 2013.

109

Exporter 2001 2011

World 220403784 496486929

China 37469209 176609357

Eastern Europe 9740557 16330468 Belarus 309994 613443

Bulgaria 949763 2027318

Czech Republic 896385 1907526

Hungary 1349041 1084925

Poland 2297347 4569157

Romania 2815356 3901671

Slovakia 616090 1469663

Ukraine 506581 756765

Turkey 7574804 17134725

Northern Africa* 5098432** 9395344 Egypt 1052046 (Year: 2008) 1689470

Morocco 2440427 (Year: 2002) 4155675

Tunisia 2658005 3550199

Table 9. Export value of the group, end-products, in absolute numbers. (Unit: 1000 Dollar.)

Source: made by author; statistics from International Trade Centre, 2013.

* Egypt is excluded since the statistics of Egypt are only available from 2008. ** Contains the

export value of Morocco in 2002 and the export value of Tunisia in 2001.

110

Exporter 2001 (= base year) 2011

World 100 225,3

China 100 471,3

Eastern Europe 100 178,8 (average) Belarus 100 197,9

Bulgaria 100 213,5

Czech Republic 100 212,8

Hungary 100 80,4

Poland 100 198,9

Romania 100 138,6

Slovakia 100 238,5

Ukraine 100 149,4

Turkey 100 226,2

Northern Africa 100 154,8 (average) Egypt 100 (base year: 2008) 160,6

Morocco 100 (base year: 2002) 170,3

Tunisia 100 133,6

Table 10. Export value of the group, end-products, in index value. Source: made by author;

statistics from International Trade Centre, 2013.

111

Exporter 2001 2011

World 14733858 30648963

China 1361008 10697629

Eastern Europe 102156 432800 Belarus 11880 33970

Bulgaria 4343 33239

Czech Republic 39256 107107

Hungary 12207 66448

Poland 26414 89666

Romania 4200 23846

Slovakia 2778 69027

Ukraine 1078 9497

Turkey 238948 1483240

Northern Africa* 8355** 22273 Egypt 921 (Year: 2008) 920

Morocco 6370 (Year: 2002) 6596

Tunisia 1985 14757

Table 11. Export value of HS-Code 60 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

112

Exporter 2001 (= base year) 2011

World 100 208,0

China 100 786,0

Eastern Europe 100 767,7 (average) Belarus 100 285,9

Bulgaria 100 765,3

Czech Republic 100 272,8

Hungary 100 544,3

Poland 100 339,5

Romania 100 567,8

Slovakia 100 2484,8

Ukraine 100 881,0

Turkey 100 620,7

Northern Africa 100 315,6 (average) Egypt 100 99,9

Morocco 100 103,5

Tunisia 100 743,4

Table 12. Export value of HS-Code 60 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

113

Exporter 2001 2011

World 83496798 210271265

China 13455949 80164561

Eastern Europe 2472988 5316977 Belarus 80481 228302

Bulgaria 362957 790246

Czech Republic 184129 460250

Hungary 501758 369238

Poland 441301 1588507

Romania 669139 1022582

Slovakia 168783 693692

Ukraine 64440 164160

Turkey 3641200 8387346

Northern Africa* 1214736** 2623452 Egypt 518815 (Year: 2008) 542862

Morocco 721112 (Year: 2002) 1195586

Tunisia 493624 885004

Table 13. Export value of HS-Code 61 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

114

Exporter 2001 (= base year) 2011

World 100 251,8

China 100 595,8

Eastern Europe 100 250,6 (average) Belarus 100 283,7

Bulgaria 100 217,7

Czech Republic 100 250,0

Hungary 100 73,6

Poland 100 360,90

Romania 100 152,8

Slovakia 100 411,0

Ukraine 100 254,7

Turkey 100 230,3

Northern Africa 100 149,9 (average) Egypt 100 104,6

Morocco 100 165,8

Tunisia 100 179,3

Table 14. Export value of HS-Code 61 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

115

Exporter 2001 2011

World 103260974 199876913

China 18952050 63073873

Eastern Europe 6237982 8345858 Belarus 195635 306801

Bulgaria 546559 1084099

Czech Republic 401984 860332

Hungary 749124 458752

Poland 1460290 2065257

Romania 2065992 2523832

Slovakia 398871 565085

Ukraine 419527 481700

Turkey 2639429 5125420

Northern Africa* 3772513** 6046236 Egypt 254284 (Year: 2008) 837329

Morocco 1685613 (Year: 2002) 2812020

Tunisia 2086900 2396887

Table 15. Export value of HS-Code 62 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

116

Exporter 2001 (= base year) 2011

World 100 193,6

China 100 332,8

Eastern Europe 100 143,8 (average) Belarus 100 156,8

Bulgaria 100 198,3

Czech Republic 100 214,0

Hungary 100 61,2

Poland 100 141,4

Romania 100 122,2

Slovakia 100 141,7

Ukraine 100 114,8

Turkey 100 194,2

Northern Africa 100 203,7 (average) Egypt 100 329,3

Morocco 100 166,8

Tunisia 100 114,9

Table 16. Export value of HS-Code 62 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

117

Exporter 2001 2011

World 18912154 55689788

China 3700202 22673294

Eastern Europe 927431 2234833 Belarus 21998 44370

Bulgaria 35904 119734

Czech Republic 271016 479837

Hungary 85952 190487

Poland 369342 825727

Romania 76025 331411

Slovakia 45658 141859

Ukraine 21536 101408

Turkey 1055227 2138719

Northern Africa* 102828** 703383 Egypt 278026 (Year: 2008) 308359

Morocco 27332 (Year: 2002) 141473

Tunisia 75496 253551

Table 17. Export value of HS-Code 63 in absolute numbers. (Unit: 1000 Dollar.) Source:

made by author; statistics from International Trade Centre, 2013. * Egypt is excluded since

the statistics of Egypt are only available from 2008. ** Contains the export value of Morocco

in 2002 and the export value of Tunisia in 2001.

118

Exporter 2001 2011

World 100 294,5

China 100 612,8

Eastern Europe 100 296,9 (average) Belarus 100 201,7

Bulgaria 100 333,5

Czech Republic 100 177,1

Hungary 100 221,6

Poland 100 223,6

Romania 100 435,9

Slovakia 100 310,7

Ukraine 100 470,9

Turkey 100 202,7

Northern Africa 100 321,4 (average) Egypt 100 110,9

Morocco 100 517,6

Tunisia 100 335,8

Table 18. Export value of HS-Code 63 in index value. Source: made by author; statistics from

International Trade Centre, 2013.

119

Figure 33. Map of European rivers. Source: Enchanted Learning (2013).

120

Figure 34. Map of high-speed rails in Europe. Source: Wikipedia (2011)

121

Interview with Company A

1. Hoe ziet uw supply chain eruit?

Wij zijn een Duits bedrijf. Alle kleding wordt vanuit Duitsland gekocht. De

voorraadaanlevering komt uit Azië en veel komt aan in de Rotterdamse haven. Sommige

(hippere) merken worden per vliegtuig aangeleverd, omdat dat sneller moet. De verschillende

verdeelcentra zitten in Duitsland. De verdeelcentrum voor Peek & Cloppenburg in Rotterdam

zit in Egelsbach en die leveren ons dagelijks aan. Wat dagelijks aankomt wordt verwerkt in

het filiaal, voorzien van prijsetiketten. Hippere merken komen per vliegtuig aan, want die

zitten korter op de markt, dus die moeten eerder binnenkomen. De producten komen

voornamelijk uit Azië, maar sommige producten komen uit Europa. Wij zijn een Duits

bedrijf, dus wij hebben ook heel veel Duitse leveranciers, die alles in Europa produceren.

Naast onze eigen labels zijn er ook nog merken, die lokaal produceren.

2. Hoeveel verschillende kanalen hanteert u?

Wij maken gebruik van heel veel verschillende kanalen. Op dit moment zijn wij bezig met

een aantal kanalen in China en Bangladesh opzetten. Vanuit de kantoren in China worden de

lokale leveranciers benadert en aangesproken over de kwaliteit en zorgen ze ervoor dat de

controle al veel sneller in de keten gedaan kan worden.

3. Hoelang werkt u al met deze structuur?

Sinds eind 2012 werken wij aan de nieuwe kanalen in China, maar andere structuren werken

al meer dan 20 jaar.

4. Zijn er veranderingen te verwachten? Welke? En waarom?

Nu is er een grote verandering door het nieuwe kantoor in China, waar de leveranciers direct

worden aangesproken. De manier van inkoop wordt anders en heel de supply chain verandert

hierdoor. Alles zal efficiënter verlopen en de kwaliteit wordt verbeterd.

Wij importeren veel uit Azië. Dit komt onder andere doordat wij heel veel eigen merken

verkopen. Heel veel fabricage is vanuit Europa naar Azië vertrokken, omdat de

arbeidskrachten daar goedkoper zijn. Nu ziet men daar een verandering in. Veel Chinese

mensen, wat betreft de fashion gedeelte, gaan naar Italië en nemen daar kledingbedrijven

over. Kwaliteit en prijs speelt een grote rol in de kledingindustrie.

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De meeste producten komen uit Azië, maar bepaalde producten, zoals ondergoed, worden in

Europa geproduceerd. Vanwege het nieuwe kantoor in China blijven wij nog steeds heel veel

uit China importeren.

5. Ik heb hier 3 voorbeelden van een supply chain van een kledingbedrijf. Welke van de

3 supply chains lijkt het meest op uw supply chain?

Zowel voorbeeld A als C. De producten, die per vliegtuig worden aangevoerd komen aan in

Düsseldorf, want daar zit ons hoofdkantoor. De producten, die per schip worden vervoerd,

komen in Rotterdam aan. Sommige merken (zoals Hugo Boss) worden in Duitsland

geproduceerd en vervolgens naar Nederland gestuurd, omdat de tussenhandel hier in

Nederland zit. Vervolgens wordt het weer terug gestuurd naar Duitsland en daar wordt het

gelabeld, omdat de verdeelcentra in Duitsland zitten. Zodra er meerdere filialen in Nederland

en België komen, zullen er waarschijnlijk ook verdeelcentra in Nederland komen. Maar als er

een nieuwe verdeelcentrum in Nederland komt, brengt dat allemaal kosten met zich mee. Nu

is het goedkoper om het allemaal via Duitsland te laten lopen.

6. Is near-sourcing een belangrijke strategie binnen uw supply chain?

Sommige producten komen uit Turkije en sommige producten worden in Polen gemaakt.

Deze producten worden altijd per vrachtwagen vervoerd. Ook zijn er fabrikanten die in

Duitsland zitten, maar die hun producten in Spanje of elders in Europa laten maken. Maar het

overgrote deel blijven wij toch uit China importeren.

123

Interview with Company B

1. Hoe ziet uw supply chain eruit?

De productie vindt voornamelijk plaats in het verre Oosten en vervolgens worden de

producten in containers naar Rotterdam vervoerd per schip. Wij hebben 2 DC’s in Nederland.

Alleen bij hoge uitzondering worden de producten per vliegtuig vervoerd. Dit is niet

gebruikelijk in de kledingsector, omdat de kosten hierdoor enorm stijgen waardoor de

winstmarge elimineert. Sommige producten van ons komen per vrachtwagen uit Turkije of

Tsjechië.

2. Hoeveel verschillende kanalen hanteert u?

Wij maken in totaal gebruik van vier kanalen: China, Bangladesh, Turkije en Tsjechië.

3. Hoelang werkt u al met deze structuur?

Wij werken al jaren met deze structuur, zeker 10 tot 15 jaar.

4. Zijn er veranderingen te verwachten? Welke? En waarom?

Dit gebeurt nu nog niet, maar de kosten kunnen gedrukt worden door de producten in

Bangladesh al op winkelniveau in te pakken, zodat alles prepacked in Nederland aankomt. In

dat geval heeft men geen logistiek meer in Nederland en hiermee kunnen wij heel veel kosten

besparen, omdat de lonen in het verre Oosten veel lager liggen. De lonen in het verre Oosten

zijn weliswaar gestegen, maar de lonen daar zijn nog lang niet zo hoog als in Europa. Als je

daar alles prepacked kan laten maken dan heb je geen logistiek in Nederland nodig, dus dat is

een win-win situatie. […] De taalbarrière is iets dat altijd wel blijft. Men moet zelf overwegen

hoeveel procent fout gaat en kijken of dat kan worden afgeschreven door de extra winst, die

gemaakt wordt door de producten in het verre Oosten te laten produceren.

5. Ik heb hier 3 voorbeelden van een supply chain van een kledingbedrijf. Welke van de

3 supply chains lijkt het meest op uw supply chain?

Voorbeeld B in ieder geval niet. Voorbeeld A past het meest bij ons en voorbeeld C hebben

wij ook wel een beetje. De producten worden per vliegtuig vervoerd wanneer het product

modegevoelig is of wanneer wij op het product staan te wachten. Als er nu wordt afgesproken

met de leveranciers in het verre Oosten dat in week 20 de korte broeken hier in Nederland

moeten zijn, maar in week 18 wordt het al mooi weer, dan hebben wij die korte broeken in

124

week 18 al nodig in plaats van week 20, dus dan moet het per vliegtuig vervoerd worden in

plaats van per schip.

6. Is near-sourcing een belangrijke strategie binnen uw supply chain?

Wij zijn op dit moment niet van plan om de productie van China naar Europa te verplaatsen

en zullen in het verre Oosten blijven produceren. Wellicht zou dat wel kunnen gebeuren na 10

jaar, maar nu in ieder geval nog niet, want de lonen in China zijn nog vele malen lager dan in

Europa.

125

Interview with Company C

1. Hoe ziet uw supply chain eruit?

Wij hebben zowel producten uit het verre Oosten als uit Turkije. Wat uit China komt, wordt

per container vervoerd en wat uit Turkije komt, wordt per vrachtwagen vervoerd. Er komen

ook wat producten uit Pakistan en dat soort landen. Maar naast China, is Turkije ook een

redelijk belangrijk land voor ons.

2. Hoeveel verschillende kanalen hanteert u?

Wij doen zeevracht vanuit het verre Oosten en in enkele gevallen worden de producten per

vliegtuig vervoerd. Dat laatste geldt ook wel voor producten uit Turkije. De producten door

de lucht laten vervoeren, is wel heel uitzonderlijk. Het heeft puur met snelheid te maken. Als

we iets willen nabestellen en als we iets snel willen hebben of als de leverancier veel

vertraging heeft in het productieproces, dan moet er gevlogen worden.

3. Hoelang werkt u al met deze structuur?

Wij werken al jaren met deze structuur. Dan kan je denken aan een periode van ongeveer 10

jaar.

4. Zijn er veranderingen te verwachten? Welke? En waarom?

De structuur blijft min of meer hetzelfde, alleen de verdeling van de productielanden kan

verschuiven, vanwege de kosten en tijdsoverwegingen. De verschillende situaties in de

verschillende landen spelen hierbij ook een rol. China is opeens een stuk duurder geworden

dan dat we gewend zijn, dus nu is het interessanter om te kijken of landen, die dichterbij zitten

een optie zijn. Die landen zijn wel wat duurder, maar als daar van alles gebeurt dan is dat wel

interessanter. […] Je moet je goederenstroom verdelen over verschillende landen. Elk land

heeft haar voor- en nadelen. Je moet zo goed mogelijk de verdeling over die landen

verspreiden. Het is goed om dingen ver weg te doen maar ook goed om wat dingen dichterbij

te doen. […] Wij hebben niet met taalbarrières en kwaliteitsproblemen te maken als we onze

producten in China laten produceren, want we hebben kantoren in China met personeel die de

taal wel beheersen.

5. Ik heb hier 3 voorbeelden van een supply chain van een kledingbedrijf. Welke van de

3 supply chains lijkt het meest op uw supply chain?

126

Variant A en C komen in grote lijnen overeen met onze supply chain. Er wordt voornamelijk

geproduceerd in het verre Oosten en dat wordt dan met containers vervoerd naar Rotterdam.

Alleen bij hoge uitzondering worden de producten per vliegtuig vervoerd, dus als het met

spoed moet. Dit komt dan aan op Schiphol. Wat uit Turkije komt, wordt altijd per

vrachtwagen vervoerd (alleen een enkele keer per vliegtuig). De producten, die uit Turkije

komen, worden nooit per boot vervoerd, want wat uit Turkije komt, is altijd sneller en

goedkoper per vrachtwagen.

6. Is near-sourcing een belangrijke strategie binnen uw supply chain?

Elke keuze die je maakt voor een land om daar te produceren, daar zitten verschillende

redenen aan. Je moet de verdeling zodanig maken dat die uiteindelijk optimaal is en daar

hoort near-sourcing ook zeker bij. Dit is afhankelijk van de omstandigheden. Je ziet dat er nu

bedrijven zijn, die eerst voor 100% naar het verre Oosten zijn gegaan, maar nu ook weer voor

een gedeelte dichterbij de markt komen. Dat komt ook omdat het verre Oosten duurder is

geworden en omdat de lead-times langer zijn, dus dat is een grote risico.

127

Interview with Company D

1. Hoe ziet uw supply chain eruit?

Hou er rekening mee dat wij een retailer zijn met eigen winkels, maar ook zelf de kleding

ontwerpen en laten produceren in met name het verre Oosten en Turkije. Een klein stukje

komt van de Nederlandse leverancier, maar die laten het zelf ook in het verre Oosten maken.

[…] Het Verre Oosten is Bangladesh, China en India. Wij kopen op dit moment alleen in, in

China en Bangladesh. In het verleden kochten we ook in India in.

2. Hoeveel verschillende kanalen hanteert u?

Alles wat wij uit Turkije halen is Quick Delivery en dat gaat altijd per vrachtwagen en nooit

per vliegtuig. Per vrachtwagen duurt ongeveer 5 dagen en vliegen duurt 3 dagen. Dat moet je

goed kunnen plannen, want als het per vliegtuig moet, gaan de kosten omhoog. Als je die 5

dagen niet eens kan plannen dan heb je een serieus probleem, dat moet je goed kunnen.

Sommige producten uit het verre Oosten komen ook per vliegtuig (Quick Delivery). Dat is

niet alleen bij modegevoelige producten maar ook bij basics (basisproducten). Natuurlijk, bij

modegevoelige producten heb je dat sowieso. Als je een trend ziet dan kun je daar meteen op

inspelen, maar een klein gedeelte dat per vliegtuig vervoerd wordt, zijn ook basics

(basisproducten). Betrouwbaarheid, daar hebben wij wel een beetje een probleem mee in ons

supply chain, dus vandaar dat ook een stukje basics (basisproducten) is bij ons. Vaak gaat er

iets mis in China en daarom moeten wij het laten vliegen. […] Vaak gaat het om

kwaliteitsproblemen en problemen bij de leverancier. Chinezen zeggen “ja” en doen “nee”,

dus je schiet daar niks mee op.

3. Hoelang werkt u al met deze structuur?

Laten we het op 20 jaar houden. Zo’n jaar of 10 geleden kochten we ook in Frankrijk en

Engeland in. Engeland komt soms nog voor.

4. Zijn er veranderingen te verwachten? Welke? En waarom?

Nee, niet in de structuur van de supply chain. Maar er zijn wel verschuivingen in landen waar

goederen vandaan komen. Momenteel schuiven we meer naar Bangladesh en Turkije. […]

We produceren meer in Bangladesh wegens betrouwbaarheidsissues, maar ook omdat China

steeds duurder wordt. Wij hebben nu een aantal zusterbedrijven erbij, dus we worden steeds

groter en we hebben nu meer buying power in Bangladesh, dus schuiven we naar Bangladesh.

128

Grofweg 80% komt nu uit China en de rest uit Europa, waarvan het grootste gedeelte Turkije.

Ongeveer 15% komt uit Turkije en de overige 5% komt van andere leveranciers. Dat gaat

veranderen in de toekomst. Het aandeel van Turkije gaat met 40% toenemen qua

inkoopwaarde en dat gebeurt binnen de komende 5 jaar. […] Dat komt omdat het sneller

aankomt en omdat we een paar goede leveranciers hebben gevonden in Turkije. […] Snelheid

speelt een belangrijke rol, want de klant is grilliger dan in het verleden. De klant gaat van hot

naar haar en daar moeten wij op in kunnen spelen. China kan het ook wel, maar dan moet je

wel vliegen. Het kost je wel marge, maar als je het daar goedkoper hebt kunnen inkopen dan

heb je de vliegkosten ook al goedgemaakt. Je moet er een goede mix van maken.

5. Ik heb hier 3 voorbeelden van een supply chain van een kledingbedrijf. Welke van de

3 supply chains lijkt het meest op uw supply chain?

B zeker niet. Wij hebben een mix van voorbeeld A en C.

6. Is near-sourcing een belangrijke strategie binnen uw supply chain?

Nee, niet noodzakelijkerwijs near-sourcing. Wij zijn wel bezig met Quick Delivery, dat wil

zeggen wie/waar is men in staat om in korte termijn te produceren, zodat we snel op de markt

kunnen reageren. Dat verklaart dus deels de verschuiving naar Turkije, omdat je hier naast

een snelle productietijd ook een korte transport weg hebt. Maar we doen dit ook in China met

een leverancier die een snelle productietijd heeft, maar waarbij we de goederen dan laten

vliegen. Voor ons is het out the picture om in Europa of Afrika te produceren. Dat kom omdat

we een hele goed basis in China hebben. Een aantal jaar hebben we in Marokko en Algerije

producten gemaakt, maar dat is verlopen, omdat we in China beter konden produceren en de

betrouwbaarheid van de Chinezen toch iets beter is dan de Noord-Afrikanen.

129

Interview with Company E

1. Hoe ziet uw supply chain eruit?

Ongeveer 80% van de producten komt uit China en grofweg 20% van de producten komt uit

Turkije. Van de producten uit China wordt 85% vervoerd per schip en 15% per vliegtuig. De

producten worden per vliegtuig vervoerd als de producten met spoed in Nederland moeten

aankomen en wanneer we aan onze verkoopverplichtingen moeten voldoen en binnen een

bepaalde tijd ervoor moeten zorgen dat een bepaalde hoeveelheid van de producten gereed is

en hier in Nederland moet zijn. De producten uit Turkije worden altijd per vrachtwagen

vervoerd. In dit geval is er een onderscheid tussen “langzame” en “snelle” vrachtwagens. Als

de producten met spoed in Nederland moeten zijn dan gebruiken we “snelle” vrachtwagens.

Dit houdt in dat we dan met 2 vrachtwagenchauffeurs in 1 vrachtwagen rijden waardoor er

minder vaak gestopt hoeft te worden.

2. Hoeveel verschillende kanalen hanteert u?

Wat het verre Oosten betreft, is China het belangrijkst. Daarnaast zijn er ook landen als

Indonesië, India en Bangladesh. In Europa is Turkije het belangrijkst en een kleine

hoeveelheid komt uit Portugal en Roemenië.

3. Hoelang werkt u al met deze structuur?

Al erg lang. Er vinden wel verschuivingen plaats richting de lage lonen landen, maar het duurt

wel enige tijd voordat deze verschuivingen zich ontwikkelen en optreden. Dus je spreekt over

een periode van zeker 10 jaar.

4. Zijn er veranderingen te verwachten? Welke? En waarom?

Er zullen zeker veranderingen zijn. Dit hangt allemaal af van de economische trends. Als er

een ander land is met lage lonen dan zal er daar geproduceerd worden. Maar dit is moeilijk te

voorspellen. Afrika bijvoorbeeld is nu vaker in beeld. Men verwacht dat Afrika later in

opkomst is. Maar het hangt ook af van de businessmodel van een bedrijf. Het gaat niet altijd

om lage lonen. Soms kijken we er ook naar of een land voldoende grondstoffen en

halffabrikaten op voorraad heeft en of er in korte termijn snel geproduceerd kan worden. Dit

speelt allemaal ook een rol om te bepalen welk land je kiest.

130

5. Ik heb hier 3 voorbeelden van een supply chain van een kledingbedrijf. Welke van de

3 supply chains lijkt het meest op uw supply chain?

Wij hebben niet zozeer een DC, maar wij werken met consolidatiepunten. We hebben wel een

DC in Nederland. In dit geval hebben wij een combinatie van voorbeeld A en C. Wat uit

China komt, hoort bij voorbeeld A en wat uit Turkije komt, hoort bij voorbeeld C.

6. Is near-sourcing een belangrijke strategie binnen uw supply chain?

Near-sourcing is op zich niet belangrijk bij ons. De inkopers en designers bepalen vaak waar

iets geproduceerd wordt. Bij ons gaat het meer om het type product zelf. De lead time speelt

ook wel een rol, maar het type product is het belangrijkst. Het gaat er meer om of het type

product op het juiste kwaliteitsniveau gemaakt kan worden in dat land.