A cluster of production units (manufacturers, suppliers, designers) forming a vast industrial area, which includes basic amenities for workers.
A supply-chain city allows corporations to minimize transaction costs, take advantage of economies of scale, and foster more flexible supply chain management.
It can be a grouping of company-specific factories (vertically-integrated firms), as may be observed in the textile industry in China and other parts of Asia. Luen Thai's factories in Guangdong Province (in Dongguan, Qingyuan, and Panyu) are examples. They bring together multiple parts of the firm's supply chain (designers, suppliers, and manufacturers).
The supply-chain city may also refer to industrial clusters regrouping product-specific manufacturers. "As these clusters have grown, they have attracted related and supporting businesses, including yarn dealers, sewers, pressers, packagers, and freight forwarders. These clusters also feature large sprawling factories, with factory buildings, dormitories, and limited amenities for workers, but the focus here is on the overall cluster of firms. Illustrative examples include Datang (socks) and Shengzhou (neckties) (see Wang and Tong, 2002; Wang et al., 2005; Kusterbeck, 2005; Zhang et al., 2004)."
(Gereffi, G., The new offshoring of jobs and global development, ILO Social Policy Lectures, Geneva: 2006, p. 34)
