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Retailers of seasonal merchandise source and manufacture most of their goods overseas. Reducing cost of goods sold (COGS) is the primary motivation to source globally. However, a key disadvantage of global sourcing is increased lead time and resulting lack of responsiveness to demand.
Many retailers are finding that available savings opportunities from moving to low cost sources are nearing exhaustion. As a result, retailers are examining the demand chain, looking for ways to compress the order-to-delivery cycle and to accelerate goods in transit to protect margins and avoid markdowns.
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