End‐To‐End Supply Chain Strategies: A Parametric Study of the Apparel Industry

This study examines the tradeoffs in sourcing and sales strategies (i.e., upstream and downstream supply chain strategies) by considering them as components of an integral end‐to‐end supply chain strategy. We evaluate four end‐to‐end supply chain strategies under various scenarios using a newsvendor model, and compare the model's predictions against the prescriptions in Fisher's (1997) framework, which recommends “cost‐efficient” supply chains for “functional” products and “responsive” supply chains for “innovative” products. We considered combinations of offshore vs. nearshore sourcing, and online vs. brick‐and‐mortar retailing. This study's key finding is that sourcing and sales strategies are not completely modular: an integral end‐to‐end strategy may not decompose into an optimal sourcing strategy and a separately computed optimal sales strategy. Our analyses sharpen strategic supply chain thinking by identifying realistic conditions in which an end‐to‐end strategy with cost‐efficient components could outperform one with responsive components for innovative products, or when one with responsive components could be more profitable than one with cost‐efficient components for functional products.