Economic logic and prospects for outsourcing in the garments/textiles sector

Abstract

The principal objective of this CCS is to understand why and how so many foreign companies outsource production in the Garments/Textiles sector, especially to India. The study will examine the larger implications of such outsourcing for both the political economy of the outsourcing country and the country that takes advantage of this opportunity. The study will involve an in-depth examination of corporate outsourcing decisions. It will especially focus on garment-sector companies in Bangalore that have now become part of the global supply chain and examine how these companies have been transformed in the process. It will also examine the future prospects for such companies in terms of higher value addition, including design, and also the possible implications for the growing domestic market. The impact of being part of the global supply chain on work practices, including quality and human resource policies, will also be studied. Finally, the impact of trade restrictions (such as quotas and CCS Project Report governmental and NGO-imposed restrictions) will also be considered. • What outsourcing means and its implications Outsourcing consists in “contracting with anCCS Project Report firm to provide goods or services that were previously supplied from within the company. Similar to subcontracting.”1 In this process, an ordering company hands over a part of its work to anCCS Project Report company. The company, which orders the production, guides and details to the provider/supplier company, which will produce for its partner, its requirements and the way the work has to be done. Outsourcing is beneficial for both companies involved in the process. Indeed the ordering company can focus on CCS Project Report core activities and make especially economies through the outsourcing whereas the provider, which has the infrastructures and the expertise, is able to optimize them as much as possible. The outsourcing will create a strategic added value for the both companies.