CIM contributes in the lowest added value in the global apparel value chain

SCC Case

ABC – Joint Stock Company (real name hidden for privacy purpose) is one of the leading firms in Textile and Apparel industry. The firm we are talking about is a CIM or Cut, Trim and Make firm which can be understood from the diagram stated below:

OBM = Original Brand manufacturing, ODM = Original Design Manufacturing, OEM/FOB = Original Equipment Manufacturing/ Free On Board, CMT = Cut Make Trim Fig: Main modes of production [2]

CIM contributes in the lowest added value in the global apparel value chain. Thus the company has shifted from CIM to FOB to increase value adding and competitiveness. Also it has implemented SCC or Supply Chain Collaboration. Lean is applied at the beginning and ERP is established for 3 years based on the framework of SCC. The framework includes individual functional software modules.

Now we might assume that the firm could have produced unique products and services, superior quality, cost competitiveness, enhanced delivery performance, managed assets in better way and created superior channel relationship. In reality none of these happened. The firm decided to go for external collaboration before doing internal collaboration thus collapsing the SCC.

Reasons of the failure of SCC in ABC – Joint Stock Company