Jeans remain a top import, but sourcing patterns are shifting
- Imports of jeans to the United States rose in the first half of 2018, but where the products are being made is experiencing some shifts as companied manage the risk of trade uncertainty, Sourcing Journal reports.
- Overall, imports rose 9.2% in the first six months of this year for a total value of $1.6 billion. CAFTA countries rose as key destinations, with Guatemala and Colombia both recording double-digit growth. Vietnam, Bangladesh and Cambodia also saw double-digit growth in the first half.
- Political uncertainty, however, may have played a role in "tepid" growth or outright declines in imports from other countries. Mexico, which faces NAFTA uncertainty, saw a 2% and 5% decline in both the mens' and womens' categories of supplies. Nicaragua also saw a decline as it faces a political crisis.
The classic movie line “follow the money” can be updated to “follow the supply chain” when it comes to dealing in geopolitical and global economic realities. Far from the headlines, trading partners typically find the most cost effective and efficient means of commerce. The global sourcing of jeans is but an example of the scope and depth of international trade, economic treaties and consumer demand.
Consumers from the high end boutiques to the discount racks will never be aware of the global trade around their latest pair of designer jeans. Sure, a label noting the country of origin may catch a fleeting glance, or a quick thought about labor conditions, but for most, price and fit may be the overriding factors in choosing that next pair of jeans. Most are unaware of the complexities of an international supply chain.
Yet, for supply chain managers, this quick but detailed analysis of jean imports is a harsh reminder of the depth and intricacies of the supply chain around any product. For denim jeans, the extended supply chain include fabric, thread, and dyes, and the machinery needed to manufacture jeans. Add labor and logistics, it is quite the supply chain feat to have the right jeans, on the right shelves, and in the right store when the retailer’s advertisement hits social media.
Economics, and increasingly politics, drives the global supply chain. Supply chain managers add to their risk potential by ignoring the international aspect of their business, including raw materials and commodity items coming from unfamiliar parts of the world. Add in impending changes to trade agreements such as the North American Free Trade Agreement and Central America Free Trade Agreement, along with the impact of Brexit and the China tariffs, as examples of additional pressures and uncertainties.
Supply chain management organizations need to take a world view. Perhaps a discussion about jeans on the next casual Friday may provide the necessary spark to get the conversation moving in that direction.
- Sourcing Journal Denim Sourcing Scene Shifts as Political Forces Take Toll