1 week ago | 11 mins read
One of the most challenging tasks for the Indian apparel exporter is cost-effective and timely sourcing of yarns and fabrics that meet quality benchmarks. Whether small or big, every exporter faces such issues. Mahendran R., GM – Fabric Sourcing, Gokaldas Exports (GE) – a B. Tech in Textiles with 18 years’ of experience in the textile industry (totally at the yarn, fabric and processing segments), shares his experiences with Apparel Resources. Having exposure of working with C&A, Mahendran is associated with GE from last 6 years and is handling a team of 24 people. Mahendran shared his yarn and fabric sourcing systems at GE, as well as general challenges of this segment.
“In India, the biggest challenge in fabric sourcing is scattered manufacturing facilities. There is no one place from where a company can get all sorts of fabric. A particular hub is known for polyester or cotton while another is for knitted fabric… Even in that hub, most players have a larger focus on the domestic market, so all developments being done, is accordingly. Especially in the case of polyester, India is more costly than other countries. In hubs like Surat, though the number of players is more, but the focus on quality and volume players are less,” says Mahendran. He further adds that even mills have not upgraded themselves from the global perspective, and are still looking only from the point of regional demand. He is quite dissatisfied with the R&D and quality aspects of Indian mills.
Mahendran highlights that top Indian mills prefer to export fabric on lower price and they are fond of export incentives rather than giving to Indian market, so automatically Indian garment manufacturing industry has to suffer. In fact, the price a bigger mill is offering to Bangladesh is lesser than what they offer to Indian garment manufacturers. “It is affecting us badly as we have to run behind from pillar to post to find the right company where I can put in my requirements,” he says.
To overcome these challenges, the company is working with a good number of vendors (including all levels) and maintaining close association with few mills that it is working with from decades. So, these mills support the company on all parameters. As far as prices are concerned, they may be on a slight higher side but they make sure of faster deliveries and good quality. Appearance of centre selvedge on solids is one of the biggest quality issues and is even found sometime in prints, which is a major problem. “Compared to China or other countries, our textile industry is not so well equipped, as the industry is largely still using the conventional method of manufacturing. Investment and use of advance infrastructure is the only option to overcome quality issues. Lot sizes are also higher in India. One container of 3 to 4 lakh metres can easily be brought from China, while the same length in India will be of 2,000 lots,” shares Mahendran.
How GE source fabric and avoid issues…
Deciding the source: The company, working with top brands like GAP, H&M, Forever 21 and many more, is 95 per cent into woven garments. For tops, the company source yarns, grey, and ready fabric. It depends mainly on available time, need of the buyer and prices to determine where to source the fabric. In the case when the fabric is required in 15 to 20 days, approaching any mills for ready fabric is not a viable option. So, if grey is available, that is the top priority. If grey is not available, the process starts from yarn sourcing. When there is enough time for an order, mill-made ready fabric is preferred. In case of bottomwear, the company always adheres to mills. One of the reasons for same is that limited number of mills in India is offering such fabric. Then the processing capacity for bottoms is also limited.
Less stock with proper planning: The company doesn’t keep much stock as its team has a strong eye on the market, constantly interacting with its buyers and trying to understand their needs, fashion forecast trends, so keeping ready stock is a wasted effort… Proactive approach works here. Based on the feedback from market/buyers, guidance is given to the weavers and yarn manufacturers for development. Monthly requirement updates are shared with them and based on that the weavers keep stock. “Once an order gets confirmed we immediately tell the weaver to start work. In certain cases, weavers ask for a certain amount of advance and company pays them the same, so they can block that capacity and run machines for GE,” says Mahendran.
Price fluctuation is also one of the biggest challenges and to overcome that the sourcing team, based on all the inputs gathered, blocks capacities in advance and procures yarn during the off-seasons. For example, for the requirement of fabrics in November-January, the yarn is already procured and grey was running in August. Whatever fabric price GE team quotes to the buyers is nearly six months old. “Our prices to the buyers are valid for more than 6 months but to meet that commitment the team works very aggressively, as none of the mills quote for validity of more than 15 days,” claims Mahendran, adding further that in India they have seen that the price goes up in the months of November, October and December… And if the order placement is high in the market, the price shot up any time. So, procurement well in advance is the best option.
There are nearly 50 people in the Gokaldas Exports fabric team including quality experts. Per year, it sources yarn and fabric of nearly Rs. 650 to 700 crore (35 to 40 lakh metres per month).
Imported fabric: Out of total fabric consummation of GE, 60 per cent fabric is being imported from China, Taiwan and Pakistan, and all fabric is being imported directly. It takes 45 days to procure the fabric from abroad if the fabric is the routine one. In case of new development or different kind of requirement, 75 days is the maximum time taken for the fabric to reach the factory. The company prefers to work on LC.
The lead time of big mills is very high, but there are second-level players too who can deliver the same quality. So the company has a good vendor base of such second-level suppliers, also.
Special variety coated fabric comes from China; orders for multiple stretches like polyamide stretch, four-way stretch’s goes to Korea. Denim, courser counts of bottom fabric comes from Pakistan as in these categories their standard of quality and compactness is better than India. India is contributing basic core fabric only. In case of shortage of time, airlifting the fabric or searching for next best possible fabric in India, are the options explored. The company’s factories are in Karnataka, Tamil Nadu and in Andhra Pradesh. If the fabric has to be delivered in Karnataka, central warehouse works as a nodal point while for other states, the fabric department makes sure to deliver directly at the factories.
GE uses more of viscose in tops; while for the bottomwear, cotton with stretch are more in use. For outerwear, polyester and nylon is being used.
Requirements at GE…
Minimum order placed by the company is somewhere between 5,000 to 6,000 metres while maximum order placement would be around 5 to 6 lakh metres, be it grey or the final fabric. In case of yarns, the minimum order size is of 3 to 4 tonnes. Overall more than 400 vendors are associated with the company, but average 40 to 50 vendors are closely working with GE, out of which 5 to 6 are grey suppliers while 30 mills and processors are also on the preferred list. Rayon is coming more from South India, cotton-light weight is coming from Mumbai, bottom fabric, and printing, processing is being done from North India (Delhi-NCR). Nearly 50 per cent of the vendors are nominated while rest are selected by the company. All the big mills come under nomination. The company is open to working with new vendors. “It is important to analyse: who are the existing clients of such suppliers; their overall quality standards; their real capacity; their financial strength, etc… Only after checking these basic parameters, GE considers selecting a new vendor. Various audits will also take place down the line to assure performance,” concludes Mahendran.