The gains are possible because Esquel owns a vertically integrated supply chain and manufacturing process which extends from cotton farming, spinning, knitting, weaving, and apparel production, and then all the way to retailing.

FORBES: The Esquel Way: One Company's Approach To Rising Costs In China

This means that as additional activities are outsourced, the supply chain turns from a single integrated process, performed within the boundaries of traditional corporations, to a fragmented and disintegrated process, a collection of separate and disjointed activities performed across several independent subcontractors.

FORBES: How Hewlett-Packard And Dell Destroyed Their PC Advantage ... Piece-By-Piece

This means that as more and more activities are outsourced, the supply chain turns from a single integrated process performed within the boundaries of traditional corporations to a fragmented and disintegrated process, a collection of separate and disjointed activities, performed across several independent subcontractors.

FORBES: The Unintended Consequences of Outsourcing