Improving supplier's situation through supplier cooperation: The case of Xintang jeans town

Inferior labor conditions in developing countries have raised Western customers' awareness of sweatshops. Developing countries' suppliers are facing growing pressure from Western clients on ethical issues associated with the production of low-cost goods at the expense of worker health, safety, and welfare. Inferior working conditions not only adversely affect worker well-being, but also negatively impact performance and productivity, which is detrimental to the entire supply chain in the long-run. In this paper, we consider the case of Xintang International Jeans and Textile City, the largest manufacturing base of jeans in China, which sought to shed its sweatshop image. Working closely with the administration of this manufacturing base, we applied operations research techniques to analyze local suppliers' possible operations strategies based on considerations of price and delivery guarantees, two critical dimensions of competition in the apparel and textile industry. Our analysis highlighted the fact that local suppliers' cooperation may be an effective way for improving labor conditions. Our work has implications for societal improvement in developing countries through better labor conditions and increased cooperation while maintaining a healthy level of competition.