Dated – 26/08/2008

Sourcing In Apparel
Industries
Arun Shukla
MBA (Marketing)
International Institute of Information Technology
Pune
India
 Overview

Understand what sourcing means in Apparel

How is sourcing being managed currently in Apparel?
What processes are manually managed and what processes are digitized?
Understand the challenges faced while managing sourcing in Apparel

Are there applications, systems, vendors who are providing specific solutions?
Who are they and what solutions are they providing
What requirements are they addressing with their solutions?
What requirements are yet unaddressed?

What are the challenges that the customer is facing

Can we address this challenge?
What will be required to deliver a value solution?
Can we package this solution as a clearly differentiated offering?

Compare with competitors

What are the constituents of the offering?
Why is it differentiated?
How does it compare with competition?
 Understand what Sourcing means in Apparel

The Apparel manufacturing undergoes different segments of Processes.

The steps of development are a guideline to help you, to know, how the process can help you for importing
garments and its functions.

1. Season:

The process by which a particular design, activity, color, etc., comes into some popularity and then phases
out. This cycle of adoption and rejection is quite similar to the product life cycle.

The Apparel Fashion cycle uses different terms to describe its phases:

(1) Distinctiveness phase, in which the style is eagerly sought;

(2) Emulation stage, in which its popularity grows; and
(3) Economic stage, in which it becomes available at lower prices to the mass market.

2. Budgeting:

The detailed financial component of the strategic plan that guides the allocation of resources and provides a
mechanism for identifying deviations of actual from desired performance so corrective action can be taken.
A budget assigns a money figure to each revenue and expense related activity. A budget is usually prepared
for a period of six months by each component of an organization. A budget provides both a guide for action
and a means of assessing performance.

A statement prepared by management containing planned financial commitments for all the components of
the merchandise plan (Designing, Sampling, Advertising, Material Procurement, Pre-sales, Pre-production,
Production, Shipping, Reductions, Stocks, Profit Margins, and purchases) at a seasonal period.

3. Designing:

Apparel product design models are often based on consumers' perceptions and preferences have typically
formulated in the context of multidimensional measurement analysis. In this case, various optimization
programs have to been used such as color, measurements, sex categories, trims and quantities in
percentage.

The Stitchplus designing team also works with possessed ideas in order a product fulfilling the
desirability/durability of that product content for each set of potential customers. The level of market
demand for any potential product is estimated by aggregating the individual preference models across
customers.

4. Sampling:

Sampling requires performing prototypes with detailed sketches transformed into virtual reality effects of
the customers need. This Sample product enables them to produce a screen idea of the market survey and
give a idea in selling the products within the season changes.

We, sample developers always look at new dye effects, blends of fibers and yarns and textiles for
specialized end uses computers to analyze test results and draw on statistical figure to enable them to
evaluate the performance of a new sample without spending time reproducing it several times before
achieving the desired effect.

The first sample is produced by the vendor but our team often works with a technician or sample machinist
who interprets and executes the concept on sample or production machinery.

Stitchplus finalize the first sample submitted to the customer for approval and gives a costing out as
accurately as possible.

Any amendments to the sample will then be carried out and the sample resubmitted for approval. This
process may be repeated several times before the sample receives final approval and is ‘sealed’.

5. Attending Fairs:

Why is it that all businesses, no matter whether they produce, manufacture, market products and services
should be involved in sales promotion activities or attending business fairs?
There are many reasons and the ones that apply to you will do so because of your specific product or
service, location, business arrangement, amount of marketing activity you perform, etc.

How promotion activities like Sampling would benefit your business:

1) New products will be reminded to your commodity merchants, processors, retailers &
consumers systematically;
2) you sell seasonal and fashionable products which require some degree of reintroduction &
promotion from year to year;
3) New Brands from your sampling will attract new consumers that must learn to make buying
decisions about your products;
4) To develop sales volume required to maintain low-cost mass production operation dealing in
consumer goods;
5) An opportunity to increase sales of your product by some means other than pricing strategies.

6. Pre Production Approvals:

All products and promotions undergo a rigorous approval process to ensure faithful representation and
reproduction of each property with a consistently high standard of quality procedures.

7. Production & Shipping:

The production process involves myriad steps and depends on the talent and skill of many individuals. It is
a team effort. Apparel making is not conducive to precision mass production. Frequent style changes and
varying degrees of fabric workability force continual adjustments in the manufacturing process.

Standardized equipment is difficult to design and implement, and production is therefore dependent on
skilled workers.

A manufacturer's reputation for good fit, wear ability and few customer returns is a valuable sales aid.
Therefore, detection of imperfect garments is essential.

Quality control begins at the yarn selection stage itself, and then it is processed as a fabric where it is
inspected for defects of material, dyeing and finishing.

Minor irregularities are marked on the fabric with little red flags or strings and the total roll price is
discounted accordingly. When the fabric is laid out on the manufacturer's cutting table, it is inspected again
- usually by the cutter - and any defects are cut out. If too much of the fabric is imperfect, it is returned to
the mills.
Quality of work is checked during each step of production. If errors are discovered early in the process,
they can usually be corrected. Inspection is done by the workers themselves and also by the factory
production manager or a floor worker who supervises production flow. In addition, Stitchplus usually spot
checks quality on a daily basis. Completed garments are examined again by the finishers and by the
shipping clerk as they are pulled for delivery on time.
Garments will be carefully scrutinized to be sure that the size, color and style number on the cutting ticket
correspond to the garment itself. They will be inspected for quality of material, stitching, trimming, correct
labels and even the right color of thread. Finally, any garments returned to the manufacturer by retailers
should be analyzed to determine the source of error in production.

Shipping methods are considered as a archaic by most industry members. All orders are hand picked. If a
store orders certain styles in different colors and in progressive sizes, it will be hand-selected and
consolidated for one shipment. Vendors will normally ship by parcel post, freight and air freight. Rates are
charged by shipment weight only.

Carriers will provide specific packing instructions and suggestions for economic use of their services. For
local pick-up and delivery of materials and finished garments, good shipping person for quality control,
proper and efficient filling of orders, meeting delivery dates and avoiding shortages.

Challenges while managing Sourcing in Apparel

Designing, sourcing and buying goods can be a complex process that is typically hampered by the
extensive use of spreadsheets, emails and phone calls. The need to key and re-key data from paper to
system or between disparate systems is inefficient and can lead to unnecessary errors. Errors in processing
or having to make simple changes to product specifications such as color or measurements, can incur costly
time delays and unnecessary costs. Updating and sending out multiple versions of documents to suppliers
requires a significant amount of human resource, and can lead to duplication and misunderstandings.

Throwing more resources at the problem might help, but it’s not the long-term answer. Until now, the
ability to help apparel retailers manage these critical functions effectively has been an issue largely
unaddressed by IT vendors. But the desire to take advantage of innovative software to help formalize best
practices and help under-pressure apparel retailers’ scale their businesses effectively is clearly there. Today,
leading retailers around the world are looking to technology to help them manage the global sourcing
process.

Example:

IBM
Business need:
Goo-Way staffs have to manually search by hand for the past and present documents and have them
couriered to the relevant parties. They wanted to find a way to reduce the physical searching of documents
which was time consuming.

Solution:
Startin Point recommended the use of IBM DB2 Content Manager Express Edition along with its own
scanning application, TruCapture for IBM Content Manager Express. IBM DB2 Content Manager Express
Edition delivers an affordable and comprehensive content management solution for Goo-Way’s growing
business operations.

Benefits:
With IBM DB2 information management software, there was improved communications for Goo-Way
internally among various departments and externally with customers, suppliers and governmental bodies.
 Challenges faced by the Customers

1) Any merchant nowadays has to manage numerous details on how private label brands are sourced,
produced, and delivered, which can be quite daunting to deal with, especially when trading
partners are scattered all over the world.

2) How to assimilate and communicate multiple data points effectively into a unified operation on a
single screen? Many still share product information over the phone, or via email and faxes, or
through physical communication, and the difficulty is thus to consolidate all these diverse data
points.

3) The key in global sourcing today is to minimize the overall cycle and disruptions, and the most
important way to do that is to have live, accurate, immediate information.

4) The current (mainly manual) systems still typically require information to flow via scattered
spreadsheets, phones, faxes, mail, and e-mails within the retailer’s different groups, and when it is
the time to place the order, the data is usually no longer timely or accurate. The information then
has to be revised during the ordering phase, which leads to the possibility that the vendor may
respond incorrectly—and one then has to go through the vicious cycle again.

5) Determining the true costs of above activities can also be complex, since in addition to a nominal
purchase price, one has to add freight, tax, duties, and cost of inventory, inevitable quality issues,
and the buyers’ time. Landed costs also vary tremendously, depending on how the merchandise is
shipped. For all the above reasons, the issue of achieving more transparent and cohesive
sourcing processes has become a frontline concern for many retailers, driven by boardroom
directives to boost margins through direct sourcing of international products.

Challenges for Apparel PLM in Sourcing

1) The system should monitor the product progress and assure quality requirements from design
concept via product brief, technical package, request for quote (RFQ), order, and delivery, to
invoice.

2) In order to keep deliveries on schedule, they need a comprehensive process and alerting system to
capture and communicate specification changes, test results, and potential production impacts, and
to provide the visibility to manage materials and resources effectively.

3) This information, along with quality resolution, calendaring, and status alerts (as well as the
component library, or a growing database of approved designs and configurations or components
such as fabrications, buttons, zippers, trims, embellishments, and so on, with automatic where-
used cross-referencing), should all keep product development and production on track and moving
towards the store floor.

4) Typically, retailers try to take advantage of product data management (PDM) solutions such as
Gerber’s WebPDM or Freeborder’s Product Manager to organize their production
specifications. But these systems were primarily designed to integrate with cutting and piecing
machinery, not to track quality testing, manage sourcing activities, or unite the buying process, nor
to maintain the official transaction details.
 5) Integration with nifty applications like Google Earth’s geospatial locator should help them
virtually immediately locate available agents, inspectors, and facilities to speed quality testing and
manufacturing.

Applications, systems, vendors who are providing specific solutions

Comparison with Competitors

1) Stichplus
• Stitchplus the Apparel Sourcing Company offers superior services in the Textile Field from
Product Design, Sample Development, Color/ Fabric Approval, Size Sets Analysis,
Production Schedules, Quality control Policies and Shipping.
• We have vast experiences in developing Sample projects of any category from Children wear
to Men's measurement, Home Made ups and Design Consultants divisions. It is stated in our
corporate policy that Talented Works Results Quality and 100% Client satisfaction in any
communication updates with Hour to Hour basis.
• Stitchplus is an Indian Apparel Sourcing Company looking for an interaction with a
partnership network all over the US and European countries. The quality of our work in
merchandising starts with a Service Spectrum called Order Flow Chart Procedure (OFCP)
standard.
• What's more - we've introduced an active involvement of Business Analysis Group into the
process of Product Procuring Phenomenon's. Our Analysts make researches for various
types of Products categories and update it in our web site periodically. This expert research
helps to choose features that suit your market requirement and makes best in accordance with
your business needs.

2) Centric Software

Global Sourcing Applications

With Centric's sourcing applications, manufacturers and retailers bring the right mix of private
label and branded products to market at the right price and the right time.

Off-the-shelf applications for Global Sourcing configure easily, mapping to business processes
while leveraging existing systems.
A) Product Sourcing
B) Product Specification

A) Product Sourcing

Make profitable business decisions to achieve GMROI targets, on-time delivery, and brand equity.
• Make accurate cost comparisons by considering all aspects of sourcing and supply chain
into landed product cost evaluations.
• Achieve visibility of placements to understand the relationship between vendors and risk
to business objectives.
• Manage quality inspections, compliance tracking, and audits to assure compliance and
avoid costly infractions.
 • Optimize geographically dispersed production to understand real FOB costs and manage
risk to performance.

B) Product Specification

Centric Product Specification, based on Centric's unique Product Intelligence platform, allows you
to:
• Accelerate development and delivery of sourced products
• Streamline creation of technical product specifications for different uses and suppliers
• Collaborate with suppliers on all details including color, size, lab dips, packaging, trim,
bill of material
• Reduce delays and costly mistakes through accurate communication

3) Dassault Systemes

The ENOVIA Apparel Accelerator for Sourcing and Production

This enables apparel brands to define their sourcing organization, structure and hierarchy for
optimized sourcing management. Jointly developed by Dassault Systémes ENOVIA and Wing
Tai’s Zymmetry Group, the product uses a single PLM platform to seamlessly connect global
sourcing and production offices to brand and retail headquarters.

Product Highlights
• Sourcing Organization and Vendor Management
• Component and Standards Development
• Product Development
• Sample and Test Request Management
• Request for Quotation

The ENOVIA Apparel Accelerator for Sourcing and Production enables companies to:

• Improve gross margins by allowing more control over the cost analysis and negotiation
with vendors as well as enforcing more structured hand-offs between headquarters,
buying offices, agents and vendors.
• Optimize merchandise opportunities and cost control through on-line RFQs enabling
multiple quotations for supplier provided options based on volume, delivery dates, trade
terms, and alternative component.
• Reduce amendments to purchase orders by managing changes on early forecasts to
reserve capacity and facilitating staged commitments to vendors for material and trim
purchases.

4) Zymmetry

Application: ZymSourcing

Industry Issues addressed

 • Collaboration and change management with international buying offices, production
offices, agents and factories
• Tracking material and trim liabilities for quantity changes against planned and committed
garment production
• Supplier planning, compliance tracking and quality assurance reporting
• Visibility and reporting on local and global calendar events for apparel development and
production

Key Features
• Material & Style management
• Costing Analysis
• Bulk material commitment and liability tracking
• Unique Assortment Plan through to Purchase Order functionality
• Production & shipment tracking
• Integration capabilities with ZymFactory
• Quality control & assurance

References:

1)
The Global Apparel Value Chain: What Prospects for Upgrading by Developing Countries?
Gary Gereffi
Dept of Sociology
Duke University
Durham, USA

2) Reading the Tea Leaves: What’s Brewing in GLOBAL SOURCING

Sourcing & Logistics – Outlook

3) Global Sourcing in the U.S. Apparel Industry

Gery Gereffi
Duke University

4) Material World Sourcing Summit Report

Apparel Magazine