Critical Tasks in the Buyer-Driven Postponement of Fashion Buyers

Abstract

We consider the postponement strategy of transnational fashion buyers, showing aggressive investment in embedding big data analytics and active engagement in managing quick response third-world contractors. Based on a two-stage multi-product newsvendor model, we show that such two strategic behaviors of fashion buyers allow them to reduce their committed orders with contractors, resulting in a complementary effect. Thus, such initiatives should be implemented simultaneously as the critical tasks for transnational fashion buyers to improve their in-season reactivity. Next, from the operational level, our results show that the conventional wisdom of risk-pooling suited for producer-driven supply chains is not valid if the buyers can manage the cost of delayed orders effectively. Otherwise, their benefit is insignificant even though they may need to follow the conventional wisdom. In the presence of restricted chances to reduce costs of delayed orders in practice, such results indicate that reducing options and complexity in the assortment plan for intelligent management of the costs correspond to another critical task for fashion buyers with the recent trend of fabric consolidation and material platforming.