The Apparel Export Industry has undergone a phenomenal change where there is no longer room for complacency, from either side, the vendor or the buyer. Operational transparency between them is now the key element in their growth strategy. Apparel Online talks to the industry, both Exporters and Buyers on the changing dynamics…
There was a time when many in the industry felt that the buyer vendor relation was like that of a leader and follower, with of course the buyer dictating terms. But now with the growing price and time competition, both are looking at each other as partners in growth. “Though initially the buyers put additional demands to test our potential, now there is an unwritten understanding that we are in it together,” says Vijay Jain, Diamond Exports.
The opinion is shared by a majority of the vendors. A few who did not want to be named for obvious reasons felt that the only reason for the change in attitude is because of the competitive retail scenario which was putting pressure on the brands /retailers to work more closely with the suppliers to achieve targets of product, price and delivery. “This cannot be denied but it is certainly not the only reason. Strategies are changing rapidly as customer service becomes supreme. Buying agents no longer have the luxury of saying no, the only alternate is to mould operations to deliver,” says Roopak Malik, Textile Network.
[bleft]With the growing price and time competition, both the buyer and vendor are looking at each other as partners in growth[/bleft]
“Buyers are increasingly grooming partnerships as sourcing becomes teamwork to meet requirements of quality and speed,” adds Richard James, Ahlens. Perhaps it is in the interest of every player to build partnerships. The buyers have realised that it is not enough and certainly not the best way to ensure quality by stepping in at the last moment to check quality. This only creates delay in shipment due to time required for rework, which is added cost to the exporter. Today, Quality Controllers have become Quality Assurance Officers and most of the buyers are dedicating QAs to individual or a set of factories to monitor day-to-day operations for complete support on quality so that quality is built in and not just checked.
“The buyers are looking to reduce quality audits overseas and the logic is simple-reduce cost on operations, product should be right first time and problems should be detected and resolved at a nascent stage for timely deliveries,” says Puneet Sharma, Blair International. The overriding concern is, of course, price, delivery and quality. “The profitability of business is very critical to everyone in the supply chain and no one can afford to make a mistake and certainly not the retailer, for whom a bad product could mean lost ground in a market governed by a fickle minded consumer without any loyalties,” adds Puneet.
[bleft]The days of secret costing and fake retail reports are passé, the supply chain has to integrate closely for results[/bleft]
Citing an occasion when the buyer’s commitment to the product saved a potentially loss bearing situation, Izazuddin, Amit Export says, “We had an order from a regular Spanish customer with delicate embroidery, which unfortunately lost its shine after washing as the thread used did not behave as expected. We decided to take an upfront approach and brought the matter to the notice of the buyer. She took control of the situation and asked us to add a few beads to the embroidery, which put the shine back on to the garment. With some modification, we were able to deliver on time, albeit a slightly changed design but with total approval of the buyer.” Product development support has been one of the oldest areas of interaction and companies are utilising this confidence to the hilt.
As the going gets tough for everyone the critical question is …in which areas does the exporter want the buyers’ support? While most of the vendors were looking for production process support in building efficiencies and improving productivity, many others were looking for market intelligence reports, quick colour and fit approvals and product development support. “Sometimes just knowing where we stand with the competition makes a difference,” says P Karthikeyan, Scenario Overseas, Tirupur. “The buyers are asking us for cost break ups… its time they keep us informed of sales performance,” adds Krishna Kumar, Victorian Clothing.
Buyers are slowly coming to terms with transparency and many have already started implementing systems of evaluation. S.Oliver is one such buyer who understands that exports of apparel is no longer the sole responsibility of the vendor but a collective effort to retain business for the office at one end and propel growth for the supplier at the other. The competition is no longer between vendors; it is among countries and retailers. “As buying offices, we are equally responsible to drive growth and the most effective way to do so is to let the factories see the bigger, more global picture and analyse where they stand,” says Shiva Raman, s.Oliver. The company shares market reports on actual sales performance of products shipped vis-à-vis competition with its customers.
To facilitate transparency at s.Oliver, software has been put in place whereby weekly reports are sent to the suppliers on how their products are moving not only against factories in other countries but also with respect to factories at the same destination. Regular workshops are held to discuss problem areas and solutions. Market research is also undertaken regularly to pick up any change in direction or strategy for immediate implementation so as to not miss out on any pulse of fast evolving market dynamics. The approach is direct and aggressive with transparency at all levels the buzzword. The days of secret costing and fake retail reports are passé, the supply chain has to integrate closely for results.
While post product report and in production support are critical, there are many other agencies that support their vendors with pre-production and sourcing needs. “In many cases if the factories find it difficult to work at the designated price, buying agencies assist them in sourcing of the fabrics, trims and other resources to save cost,” says Roopak Malik. JCPenney and Gap have taken the concept a step ahead and they are nominating suppliers of fabrics and trims, to both cut down the cost and reduce pressure on the exporter to source, while saving on critical time and resources on planning production.
Another area that most exporters seek buyer assistance is to speed up approval processes. “One of the departments that is being shifted to the buying operations is colour and fit approvals,’ says Puneet. While colour approvals are increasingly being done in India with bigger buying operations like Gap with the help of ‘colour by numbers’, most of the buyers admit that live fits are still mostly the prerogative of headquarters. However, with so many fit solutions available in the market like soft form dummies and 3D fit software solutions with correction facilities, companies are more open to approvals at the source of manufacturing. Even the concept of live model fits is on the rise.” There just isn’t enough time to exchange views on approvals and we often resort to hiring live models according to size charts to check the actual fits- where the arm hole is going wrong, the fall, etc., so when the sample is ready, the orders come in almost immediately,” adds Malik. Li & Fung is also hiring models for some of their accounts.
Partnership in product development cannot be undermined and many buyers are opening offices in the country only to take advantage of PD skills in the country, while cutting down on design and collection expenses in the West. However, the ultimate in buyer exporter relation is vendor-managed shelves. ‘A demand driven supply chain requires that companies share pre-season forecast, agree on replenishment levels and relinquish responsibility of replenishment on the supplier,” says P Jagannath. TSS/AMC. Though the concept of VMI is still in the nascent stages, the movement towards greater trust, communication and alignment of common goals is a step in the right direction.