The Diffusion of Modern Manufacturing Practices : Evidence from the Retail-Apparel Sectors

Like many consumer product industries, the apparel industry is being affected by information technology-based changes in the manufacture and retailing of products. Based on detailed business-unit level data, we show that observed heterogeneity in the adoption of modern manufacturing practices by apparel business units can be explained by changes in retail customer requirements for rapid replenishment of products. The incentive to adopt new practices is further increased by complementarities between manufacturing practices. Finally, sequential rather than simultaneous adoption of complementary practices occur as firms respond to changes in product demand