Introduction
Understanding the complexities of the current global economy is tasking but an exceptionally significant endeavor. The Global Production Networks (GPN) refers to the intertwined roles, operations, and transactions via which a particular good or service is developed, distributed, and used (Posthuma & Nathan 2010). Even though the production networks in the fashion industry are defined as highly global, the state institutional setting of individual fashion firm is a fundamental aspect of the creation of these networks.
It assists in shaping the competencies that firms build and the approaches they adapt to remain relevant. This paper seeks to examine the GPN perspective for evaluating the world economy and its influence on global growth. The 21st century is defined by increased globalization that serves as a focal point in business operations. For a long time, much concern had been based on the supply side of the globalizing markets; current concerns have been moved to the demand and the purchasing function, and the bulging globalization of production networks.
This paper selects the fashion industry to show the kind of labor that goes into creating the product or service. This paper will also show how this work is globally distributed and how value is captured at each stage of production distributed along with the network.
However, this paper seeks to identify the areas at which specializations interlock to reinforce the value chain. Production chains that focus on creating cultural products are defined by their dependence on customer taste and desire. This section will show that the viability of the fashion industry relies on building an instinctive relationship between commodities and consumers. To amplify the implied value of products, fashion industries employ a range of approaches including packaging, branding, and marketing.
Forms of labor in the fashion industry
Labor is an intrinsic component of the production procedure and often has a strong influence on locational decisions within and across borders (Posthuma & Nathan 2010). New trends in the structure of the labor sector are emerging due to the high rate of the globalizing economy. Globalization has led to the diffusion of information technology, innovation, and a wider global market. The convergence of these forces has led to significant changes in the workplace and the labor market.
The developed countries in the western region have for a long time sought to maintain their dominance in the fashion industry particularly the clothing sector. The newly industrializing countries have heightened competition since their low wage rates favor low capital investment (Lane & Probert 2009). The kind of labor needed in the fashion industry particularly the clothing sector is divided into various steps that include planning and development phase, design and prototyping, production design, manufacturing and assembly of collections, marketing, distribution, and retailing.
Developing and planning of the products entails various critical undertakings that require skilled labor with the knowledge of market patterns and material availability (Camerinelli 2009). The integration of the preliminary steps in the development of the goods needs proper planning and budgeting of the planned production. The design and prototyping section requires a highly informed labor force that has the techniques to design new models in line with the market demand and cost structures.
The production design entails generating a cost-effective formula to identify the most cost-effective approach to manufacturing a product. The labor force must take into consideration the quality standards and customer preferences.
The actual processing and assembly stage of products requires semi-skilled labor involved in sewing using simple technology. The most critical stage is marketing that seeks to attain the largest possible market coverage. The labor force needed must possess fundamental skills in marketing such as detecting customer needs and preferences. The distribution sector involves highly technical logistical activities established on digitalized order tracking.
This implies that technical staff is essential to facilitate distribution both locally and at global levels. Ideally, these stages can be detached from each other and practiced in distinct settings, because they have established costs and distinct sets of competencies (Dicken 1998). The process of segmenting the value chain functions highly on the available capabilities of the labor force.
How are GPN distributed
The fashion industry, and especially the clothing section, is labor-intensive and salaries for the semi-skilled employees account for a major portion of the production costs. Following the rise of competitive pressures from low-wage nations, the manufacturing sector is coping by shifting to countries where cheap labor is readily available such as Asia and Africa. Furthermore, the friendly nature of trade policies and tariffs within the less developed countries has shaped the geographical concerns and management of GPNs.
GPN actors in the world economy are entailed in cooperation and on the other hand completion (Lane & Probert 2004). Therefore, this is an indicator that relationships between different actors take many forms. Firms in the fashion industry face fierce competitors but at other times, these firms are enshrined in a complex web of cooperative networks. Firms continue to use product offshoring techniques to broaden their networks across the globe.
Dicken (1998) defines product offshoring as the shifting of business activities done at a firm in a particular country to a similar company but located in another country. Essentially, it is the cross-border relocation of business processes. This transfer focuses on taking advantage of a vast supply of cheap raw materials and labor. GPNs are also distributed through advertising and e-commerce platforms.
Value addition
Based on Marxian value theory, the value is developed in the material processes that are defined by the kind of labor induced to a final product and in the processes of distribution that avail commodities to the market (Klinger 2012). These processes involve branding and marketing that connects with target consumers. Branding and marketing increase the value of the product and create interests among consumers.
Ideally, fashions represent a phenomenon of the contemporary state. For instance, styles of dress, characters, or lifestyles define fashion. Fashions are both current and popular among a certain social group at different times. Fashions are often unstable, changing in different places and social settings depending on the societal norms, seasonal influences, as well as persisting social patterns. However, consumer valuations of fashion products depend on time and location making the fashion sector highly unpredictable.
The shared feelings and aesthetic attachments linked with fashion build wide inter-sector networks of trade that converge a variety of products and services. This sector contains the risks linked to fashion by shaping the patterns of their practices to allow swift changes in the market value of goods. Brands, loyalty, and fashion events are some of the institutional strategies used to stabilize the market.
Retailers are significant actors in the process of distributing since they play an important role in the network of relationships (Camerinelli 2009). However, it is necessary to ensure products are of high quality, desired fashion, and are well branded to ensure a wide and highly diversified retailer catchment in both local and global markets. Besides, the fashion industry must ensure the professional management of the GPN and the integral suppliers to ensure great command of the final product.
Institutional determinants
To gain a competitive advantage, institutional leaders design organizational capabilities that promote innovative actions to market pressures and flexible measures to address the dynamic market conditions (Hübner 2007). Managers in the fashion industry emphasize designing various types of knowledge that are hard to copy when embodied in commodities. This aspect ensures that the firm maintains a competitive edge.
Besides, efficient coordination of desirable competencies is a valuable leadership capability in creating these networks. Managers have to differentiate between capabilities unique to the organization and essential to its competitive advantage. They should also identify those, which may be outsourced, gained either via market links or in networks. In highly competitive markets, networks are inevitable to avoid internal constraints such as high production costs.
Conclusion
This paper has demonstrated that a GPN framework has a great capacity to help in the understanding of trends and geographical complexities of the world economy. The paper has also shown competencies shape market models and influence how organizations build and manage GPNS. Consequently, institutional arrangements should be facilitated to ensure that firms do not lose relevance in the global spectrum.
Reference List
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Dicken, P 1998, Global shift, Guilford Press, New York.
Hübner, R 2007, Strategic supply chain management in process industries, Springer, Berlin.
Klinger, K 2012, ‘Design-through-production formulations’, Nexus Networking Journal, vol. 14, no. 3, pp.431-440.
Lane, C & Probert, J 2004, ‘Between the global and the local: a comparison of the German and UK clothing industry’, Competition & Change, vol. 8, no.3, pp.243-266.
Lane, C & Probert, J, 2009, National capitalisms, global production networks, Oxford University Press, Oxford.
Posthuma, A & Nathan, D 2010, Labor in global production networks in India, Oxford University Press, Oxford.