Buying Office as a Catalyst in Global Apparel Sourcing: A Case Study in Korea

The apparel industry is globalized and interconnected industry due to the complex production and marketing through all stages of value chain. Most apparel companies obtain or manufacture products through global sourcing. Global sourcing is defined as the process of identifying, evaluating, negotiating, and configuring supply across multiple geographies in order to reduce costs, maximize performance, and mitigate risks. Most large-sized apparel companies that operate their own foreign buying offices, located in foreign markets to facilitate producing and importing in that region for the company. In this case study, in-depth interview with merchandisers or managers of buying offices and vendors in Korea was conducted to explore the role of buying office in Korea under the competitive global apparel sourcing industry. Also, buying offices’ strategies to have competitive advantage in a global sourcing industry were examined. Work orders from foreign retail buyers are handled by the merchandiser team of buying office that liaises with vendors. Within the buying office, merchandisers cohesively work with technical design team, quality control team, and colorists to complete apparel production with vendors on behalf of the buyer. Among the several departments within the buying office, merchandisers play a central role as a communication hub between buyers and vendors and among the internal teams. The working relationship between retail buyers and buying offices can be divided into three types including colorists, merchandisers, and R&Ds. The colorists, merchandisers, and R&D teams of buying offices work with their corresponding counterparts in retail buyers. First, colorists receive seasonal color palettes consisted of 8–10 colors for main fabrics prior to the developmental stage of the season and proceed with lab-dips developed by major fabric mills. Secondly, merchandisers work with vendors on behalf of retail buyers. Within the buying office, merchandisers mostly deal with buyers and technical design team and quality control team deal with vendors. Thirdly, the R&D teams work with designers, sourcing teams, and product development team in the retailers. Working process of buying office can be divided into two stages including pre-production stage and bulk production stage. The three things regarded as most important strategies for the future of buying agent are: providing value-added product development services, building a strong vendor-buyer relationship, and improving work efficiency. Competitive buying offices provide buyers with value-added services through R&D teams as well as quality-assured production management through vendors. Through this process, buying office can demonstrate the competitiveness of the Korean market as a core place in the fashion industry rather than the mere manufacturer of ordered products, allowing continuous business deals with the buyer. The relationships among buyer, buying office and vendor have been changed from hierarchical relationship to collaborative partnership. This relationship is mutually benefitial, and facilitating relationships through an integrated supply chain result in reliable execution. Through the partnership relation, as work is done more efficiently, the buying office mediates the opinions of the buyer and vendor, and thus can specialize in the distinct task of creating a balance between buyers and vendors. Through the experience of the direct dealing between buyer and vendor, it would reiterate the importance of the buying office’s role of mediator, allow buying offices to assign tasks to the vendor, and the buying office is decidedly playing the buying office’s inherent role. These efforts of buying offices have strengthened the competitiveness of the Korean vendors as well as buying offices located in Korea.