2. An important issue facing large
retailers that design and contract
for the production of private-label
merchandise is the best way to
select a manufacturer.
Barriers to international trade are
diminishing, which means that
retailers can consider sources of
production from across the globe.
3. Retailers use production facilities in
developing economies for much of
their private-label merchandise
because of the very low labor costs in
these countries.
Retailers can hedge against short-
term foreign currency fluctuations by
buying contracts that lock the retailer
into a set price regardless of how the
currency fluctuates.
4. Tariffs,also known as duties are
taxes placed by a government on
imports that increase the cost of
merchandise imported from
international sources.
Import tariffs have been used to
shield domestic manufacturers
from foreign competition.
5. Subjective issues
◦ Quality Control
◦ Time to market
◦ Social/Political risks
The collaborative supply chain
management approaches more
difficult to implement when
sourcing globally.
6. Policing potential violations of
human rights and child-labor laws.
Retailers have had to publicly defend
themselves against allegations of
human rights, child-labor, or other
abuses involving the factories and
countries in which their goods are
made.
Self-policing allows companies to
avoid painful public revelations.
