SOURCING AND NEGOTIATION IN MERCHANDISING DEPARTMENT

BY

SHUHEL AHAMMEDId: 111011347, Group: B

A DISSERTATION SUBMITTED IN PARTICAL FULFILLMENT OF THEREQUIREMENTS

FOR THE DEGREE OFBACHELOR OF ARTS (HONORS)

INAPPAREL MANUFACTURING MANAGEMENT AND TECHNOLOGY

UNDER THE DEPARTMENT OFAPPAREL MANUFACTURING MANAGEMENT AND TECHNOLOGY

WE ACCEPT THIS DISSERTATION AS CONFORMING TO THE REQUIREDSTANDARDS:

………………………………………………………………………………………………..SAIFUL ISLAM TANVIR

ASSITANT PROFESSOR AND DISSERTATION SUPERVISORDEPARTMENT OF APPAREL MANUFACTURING MANAGEMENT AND TECHNOLOGY

………………………………………………………………………………………………..

DR. MASUD AL NOORASSOCIATE PROFESSOR AND INTERVAL VERIFIER

DEPARTMENT OF APPAREL MANUFACTURING MANAGEMENT AND TECHNOLOGY

DATED THIS 9th DAY OF JANUARY, 2015, IN AMMT CAMPUS, SMUCT, AND DHAKA,BANGLADESH

DISSERTATION CERTIFICATION

I, SHUHEL AHAMMED, Id No: 111011347 affirm that thisDissertation, submitted in partial fulfillment of therequirements for the award of Bachelor of Arts in ApparelManufacturing Management & Technology under the Department ofApparel Manufacturing Management & Technology, Shanto-MariamUniversity of Creative Technology, Dhaka, Bangladesh isunreservedly mine unless otherwise referenced or acknowledged.The document has not been submitted for qualifications orother purposes at any other institution.

…………………………SHUHEL AHAMMEDJanuary 09, 2015

ACKNOWLEDGEMENT

I am grateful to the following people and acknowledge thatwithout their valuable contributions, this thesis would nothave been successfully finished.

Mr. Saiful Islam Tanvir, my supervisor, who has not onlyguided us through the work process but also has provided hisown valuable critiques. He has challenged me on severaloccasions as an approach to stimulate me too sufficientlyimplements my exposure on this Dissertation.

Mr. Dr. Masud Al Noor, Head of the Department, AMMT, who hasnurtured me throughout the academic Semester with hisexcellent study plan and with his ability to graduate highlevel of Industrial knowledge among the students.

Thanking you in anticipation.

CONTENTS

ABBREVIATIONS AND ACRONYMS …………………………………………………………………. PAGE

ABSTRACT ………………………………………………………………………………………….…….PAGE

CHAPTER 1

1. INTRODUCTION ……………………………………………………………………………………… PAGE

1.1 QUESTIONNAIRE MODE ………………………………………………………………..………. PAGE

1.2 KNIT APPAREL INDUSTRY OF BANGLADESH …………………………………….……….. PAGE

CHAPTER 2

2. LITERATURE REVIEW ………………………………………………………………….………….. PAGE

2.1 OVERALL KNIT SOLID WASTE CIRCUMSTANCES…………………………………………. PAGE

2.2 CATEGORICAL KNIT SOLID WASTE MEASURES………………………………………….. PAGE

CHAPTER 3

3. MATERIALS AND METHODS ……………………………………………………………………….. PAGE

3.1 RESEARCH APPROACH ……………………………………………………………………….. PAGE

3.2 POPULATION AND STUDY SAMPLES …………………………………………………………PAGE

CHAPTER 4

4. RESULTS AND DISCUSSIONS ……………………………………………………………………… PAGE

4.1 CONCEPTUAL GROUNDS ……………………………………………………………………… PAGE

4.2 ENVIRONMENTAL GROUNDS ………………………………………….……………………… PAGE

RECOMMENDATIONS ……………………………………………………………………….………… PAGE

LIMITATIONS ………………………………………………………………………..……………………. PAGE

CONCLUSIONS ……………………………………………………………………………….………… PAGE

REFERENCES …………………………………………………………………………………………… PAGE

APPENDICS ……………………………………………………………………………………………… PAGE

INTRODUCTION

Sourcing and Negotiation is a common for a business policy.Any other business cannot start without Sourcing and

Negotiation. So Sourcing and Negotiation is very important forevery business. Mainly we should know about what is sourcing.Sourcing is the process of finding suppliers of goods orservices.[1] Sourcing is the proactive management of a supplymarket to ensure access to adequate resources required for thelong term needs of the firm: understand marketcharacteristics, identify relevant potential suppliers, definea strategy for the firm, and set the objectives for any marketshaping effort. Sourcing frames the agreement with thesuppliers involved in the strategy, without necessarily goinginto the details of the contract. Sourcing teams includeelements internal and External to the firm to reach theirobjectives. Sourcing is the strategic management of externalresources. [2]

Sourcing Plan

The purpose of sourcing plan is to describe the processes,governing procedures, roles and responsibilities, personneland tactical steps to be used in executing the sourcingactivities such supplier enlistment, subcontracts, purchaseorders and material logistics scope of the organization. [3]

Global Sourcing

Global sourcing is the practice of sourcing from the globalmarket for goods and services across geopolitical boundaries.Global sourcing often aims to exploit global efficiencies inthe delivery of a product or service. [4]

Risk Management in Sourcing

The process of identification, analysis and acceptance ormitigation of uncertainty in investment decision-making iscalled Risk Management. Essentially, risk management occursanytime an investor or fund manager analyzes and attempts toquantify the potential for losses in an investment. [5]

Sourcing Policy

1. Purchase requisition 2. Supplier selection3. Purchase order4. Fulfillment5. Goods receipt6. Supplier invoice

Elements of Sourcing Management Process

1. Supply market research2. Determining sourcing and supply objective3. Determining sourcing strategy 4. Sourcing planning5.

Implementation

E-Sourcing

E-Sourcing is a faster, more transparent and fairer way offacilitating tenders and conducting negotiation. Founded on aweb-based platform, e-sourcing ensures smooth and clearcommunication, and is more profitable business tool for boththe suppliers as well as the buyers. [6]

The benefits of E-Sourcing

Time saving Provides as simple format for submitting data online Faster evolution process Clearly defined requirements More transparent negotiation Complete for global business

Negotiation

Negotiation is a method by which people settle differences. Itis a process by which compromise or agreement is reached whileavoiding argument. In any disagreement, individuals understandthey aim to achieve the best possible outcome for theirposition. However the principles of fairness, seeking mutualbenefit and maintaining a relationship are the keys to asuccessful outcome. [7]

Stage of negotiation

Preparation Discussion Clarification

Negotiate Agreement Implementation of a course of action

LITERATURE REVIEW

The Lean concept of manufacturing has given birth to agility,which means that the concept of supply chain is taken over bydemand change management. The companies started to remove thecostly waste from vertical manufacturing and implements costeffective outsourced. This integration requires specializedsupply chain partnership, which requires the companies toextend their hands beyond their thinking. [8] Every firm hasits own core competency in which they excel and representsthem in a different manner. It sometimes becomes so difficultfor the firms to do all work under one roof which might lowerdown the quality of the product or loss in the profit. Likefirms producing garments will never prefer to produce garmentpackaging otherwise they might lose their quality of producinggarments. Like transferring of goods between the countries isalways done by a logistic company which is third party whohandles all the work, Outsourcing always makes the work easierfor the firms. [9] The role of merchandiser in textileindustry has been vital since the beginning of the trade, theonly thing that has changed is the shape of the supply chainin modern world which is clearly in a process of shifting fromsupply chain concept to value chain, or in other words, frombrand oriented to customer oriented. This shift has increasedthe responsibilities of merchandisers along the whole supplychain, both at the supplier end and the retailer end. Themajor problem still faced at both ends of the supply chain isthe lack of coordination and communication, at this stageemerges the role of middle man, the buying house or so calledthe agents. [10] The objective of sourcing is to ensure thatthe products bought and sell in sufficient quantities toachieve the profit margin expected by the business. So thepurchase manager has the overall responsibility for theselection, sales and profitability of the product range withina particularly category, he also have the responsibility is toselect the merchandiser that maximize the sales andprofitability of a product range, through meeting the target.

The task is to maximize he full sales of stock bought andminimize the quantity of unsold stock at the end of eachseason. To do this the sourcing manager must work with themerchandiser in planning, development and the presentation ofproduct lines. Sourcing strategy determines how merchandisewill be acquired recognizing the unique nature of theproducts. Merchandisers have supportive relationships withmaterials vendors because materials supply determines theavailability of piece goods and production of finished goods.[11] The design, marketing, purchasing are separate but worktogether, having weekly meetings about latest trends andsupplier. They do historic research and meet with thedifferent people and cultures for guidelines of new collectionto increase their sales they looked at the historical data andfuture things that might affect. [12]

WORK FLOW DIAGRAM

Sourcing

Introductory

Negotiation

DATA ANALYSIS

The case study and depth interviews were tape recorded andtranscribed. Interpretive notes were then constructed for eachorganization, based on a compilation and comparison of the

E-Sourcing

Supplier sourcing

Purchasing

Global sourcing

Outsourcing

In-sourcing

Follow negotiationtechniques

Stage of negotiation

Managing complex negotiation

Negotiation attemptto proper ending

Sourcing and analysis

Negotiation decision and analysis

Publishedresult and discussio

Recommendation

researcher’s field notes, the interview transcripts, andadditional records such as company brochures, websites, andinternal company documentation. The use and comparison ofthese different data sources allowed the researchers tocorroborate and ensure the reliability of the information thatwas used to develop the interpretive notes. The first authorcoded all of the interpretive notes for the buyer and supplierdata. The reliability of the coding was tested by having tworesearchers separately code the field notes. Intercederreliability, defined as the number of agreements divided bythe number of combined agreements and disagreements, was equalto or greater than the recommended 0.90 minimum. The specificor level 1, codes allowed us to aggregate the data containedin the hundreds of pages of interpretive notes, and conducthigher-level analyses. These higher-level analyses wereconducted through the construction and analyses of partiallyordered meta-matrices. In the next section, we discuss theresults from these analyses, and present our findings in theform of suggested avenues for future research in the area ofsourcing and negotiation. These potential avenues for futureresearch are grounded in our data, and augmented with existingtheory where applicable. [13]

Event-specific questionsThis next set of questions will center around four specificreverse auctions. First, we will ask you to identify sourcingand negotiation that you view as being particularlysuccessful. Next, we will ask you to identify sourcing andnegotiation that you view as being particularly unsuccessful.[14]

What was as a post-auction analysis conducted?– Internally.– With suppliers.

What types of sourcing?-All types of sourcing.

What kind elements of sourcing management process?

-6 elements.

What benefit is this?-E-sourcing.

What is the risk management in sourcing?- High.

Negotiation processes and Relational/Transactional orientationin clothing retailing

The study of the relation between clothing retailer andsubjects operating at the various stages of thetextiles/apparel pipeline can be addressed by proposing areading of this interaction that draws on the concepts ofnegotiating approaches (styles and strategies). Theoreticalcontributions on this subject, which are based on a number ofdifferent theoretical perspectives (game theory, economics,psychology and management studies), have attempted to providean in-depth investigation of the issues involved, and havepredominantly considered negotiation as a process thatdevelops in the dyadic and interpersonal relationship amongsubjects involved in an interaction. According to a moreextended perspective, an interesting analysis of problemspertaining to the negotiating process is given by Ford andMouzas. One of the most interesting aspects of the work byFord and Mouzas is that negotiation comes to be seen as a wayof acting that influences the buyer-supplier relationship butat the same time is an operational lever that sheds light onrelational practices purse. The study of the negotiatingprocess as an operational lever emerging from the relationalorientations is insightful and offers a reference frameworkfor analysis of issues affecting the textiles-clothing sector.[15]

Increased Switching Costs and Loss of Flexibility

One commodity manager told us of a particularly difficultbuyer-supplier relationship in which his firm owned thetooling for a specific part. When the commodity managerattempted to secretly transfer this part to another supplier,the supplier became suspicious and purposefully kept inventorylevels very low. In the end, the OEM was never able to obtain

enough buffer stock to give it the time to both remove thetooling and bring another supplier online. If the OEM wantedto switch to another supplier, it would have to pay thenonrecurring engineering costs for a second time. Physicalassets are not the only hindrance to part transfer in theemerging aerospace supply network. One of the dangers ofoutsourcing is the loss of internal manufacturing knowledge.One experienced buyer lamented that “in the old days” he couldwalk down to the shop floor with a machined part and find “ahalf dozen machinists” capable of explaining the manufacturingprocess. Currently in this company, if a buyer wantsinformation on manufacturing time or processes he/she has tocontact a supplier or go to an internal consultant, and it cantake weeks to receive information. [16]

Roles & responsibilities

When an export order is placed to a merchandiser, he has toschedule the following main functions to execute the exportorder perfectly in time (schedule):-

1. Fabric requirement calculation (consumption, YPD).2. Accessories requirement, calculation (Thread, button,

interlining, poly bag and cartoon etc).3. Sourcing of fabrics.4. Sourcing of accessories.5. Production follow-up with fabric and accessories, be

possible date of arrival of fabric.6. Costing of garments.7. Garment analysis and production planning. 8. Performa making, swatch making and distribution to the

production unit and quality concern.9. Pre-shipment inspection schedule.10. Shipment documents11. Have to prepare proper time and action plan 12. Arranging shipping documents and final inspection.

Term of apparel merchandisingOrder confirmation by negotiation

Buying raw materials and accessories Producing garments Maintaining required quality level Exporting the garments with in schedule time.

In apparel merchandiser must have a wide range of knowledgeand skills to perform his/ her job successfully. The jobitself is Technical and general as well.

Qualifications of merchandiser

Good command of English and good communication skills inEnglish.

Good knowledge of Yarn, Fabric, Dyeing, Printing,Finishing, Dyes, Color Fastness, Garments production etc.

Clear conception of the usual Potential Quality problemsand garment manufacturing.

Good knowledge of the usual raw materials inspectionsystems and garments inspection system.

Business Development

Business development is such a process to develop the businessby following couple of roles. In a garments industry businessis developing in two ways one is business development with oldcustomer and the other is business development with a newcustomer. The development of business starts from emailcorrespondence. To develop business garments needs to followor fulfill buyer requirements by giving creative high qualityand cheap rate product.

Importance of Business Development

The importance of business development in garments industry istremendously required. Such as:

To Detail analysis of export L/C. To Preparation of a time Schedule for the export L/C. To Collection/Procurement of fabric And Accessories for

the garment to be export L/C. (Source, quality ofitems, cost of the items, receiving data of the items,quality and quantity, inspection of the items, etc.)

To Distribution of responsibilities for the job andduties.

To Production plan. To Inspection of the produced garments for quality,

quantity, packing and other requirements of the buyer.

To Preparation of Banking and shipment formalities.

Procedures of Business Development

Yet starting a business anywhere is notoriously risky. Morethan half fail within the first four years. Significanthurdles, in particular, confront small businesses in innercities:

It can be hard to attract capital. Successfully managing a growing business requires a

special set of skills that relatively few people possess. Businesses in these communities may have a hard time

reaching mainstream markets. Even when businesses get off the ground, they sometimes

do not hire many individuals from the immediateneighborhood or they may not pay enough to support afamily.

Yearly Calendar Year calendar is one kind of forecasting, in this sectiongarment factory estimate about the orders, which may beexecuter by this garment. It generally based on previous fewyears, researched on buyers. By this work force can produce60000 pcs T-Shirt in each month.

Merchandiser is a data bus between buyer & seller

Merchandiser is he/she who builds up relationship with the

buyer and acts as a Seller. He plays a vital role in an

organization in a sense that he bears more responsibility than

other in regards to execution of an order. The

responsibilities which he bears on the job are as follows:

He represents as a buyer to the Factory.

He represents as a seller to the buyers.

He inspects Quality as a buyer (from the Buyer’s point of

view).

He negotiates a price for the sellers.

He looks at the deal from seller’s point of view.

He looks into the business to flourish more in the

future.

He tries to offer the deal more competitive without

compromising the quality.

His object is to satisfy the buyers to progress more of

the future business.

His aim is to impress the buyers by means of:

1. Right products

2. Right Quality

3. Right Quantities

4. Right Time

5. Undamaged condition

The Process of Negotiation

A Successful negotiation outcome does not generally occurthrough luck by following a clear process. The Processreflects the different levels of knowledge of the subject ofNegotiation, Various parties and the way they communicate atvarious stages in the Negotiation. The following is an outlineof steps essential to effective negotiation.

Consumption & costingKnit FabricFor, T-shirt {(s/j) 30/1 combed yarn}Measurement Length = 70 cm

½ chest = 60 cm / dia

Sleeve length = 25 cm

Arm hole width = 40 cm

GSM = 145

Find out consumption / dz in kg?

Formula(Back length + sleeve length) × ½ chest × 2 × GSM ×12 10000000 = {(70 +5) + (25 +5)} × 60 × 2 ×145 ×12 {B.L + S.L ×chest × GSM ×12} 10000000100 100 1000= 2.28 kg + 7%= 2.28 kg +0.159= 2.439 kg [neck and sleeve are made rib so add 0.10] All time collar in rib = (350-400)

Cost Calculation

Cost is divided in to:1) Pre- cost------- Merchandiser

2) Final costing -------- Merchandiser + import section

Garment for example: - $ 5.00 = costGarment costing: - $ 5.00 + profit = costing

Pre- cost1) It is an estimate made before the garment is adopted in

to the line

2) Fabric, trim and labor costs for each garment is

calculated

3) The merchandiser / designer usually keep a record of all

materials costs on a work sheet.

4) Then the costing department can roughly estimate the cost

and price structure.

Final costing

1) It is an exact calculation by the costing or import

department

2) Using actual figures for fabric, accessories and labor cost

3) Costing department uses-

a. Merchandiser work sheet

b. A proto type garment

c. Production pattern

4) A detailed cost analysis is made for each garment the final

cost is on plotted a “cost sheet”.

Analysis a cost sheet1. Materials:- Total amount of material × ($ 1) / yd =

Total price

2. Trimming :- Button(BTN), thread(THD), interlining(INT),

level & packing

3. Production pattern making, grading, marking, spreading

and cutting

4. Assembly and finishing:- Calculated the average time of

operations

5. Over head cost: - Salary, rent, utilities > (30- 40%)

6. Freight :- Air freight / sea freight

7. Quota change

Undertaking price quotation for buyers

There are following process for fixation price:-

1. FOB ( Free on board)

a. Exporter does not bear the cost of freight of ship or air

b. It is buyer who himself bear the freight

2. C & F ( Cost & freight)

a. Free on board + freight = c & f

b. In this case ship or air freight is carried by the

exporter while quoting price.

c. This price a bit higher than FOB

3. CIF ( Cost, insurance & freight)

a. C& f + insurance = CIF

b. In this case in addition to the bearing of freight, the

cost of insurance is also borne by the export.

4. CM ( Cost of making / manufacturing)

a. Manufacturing or exporter will get only making charge of

that garment

b. Fabric, trimming and other materials is supplied by the

buyer.

5. CMT (Cost of manufacturing and trimming)

a. Manufacture or exporter will get the making charge and

at the same time will get the trimming cost

b. Fabric is supplied by the buyer

Costing of garments in (FOB) cost

Costing of a garment for example in a shirt:

1. Fabric costing

2. Garment accessories:a) Buttonb) Interliningc) Labeld) Threade) Collar bonef) Hang tag/ price tag

3. Finishing accessories:a) Poly bagb) Plastic clipc) Gum Tape

d) Neck boarde) Tag pinf) Stickerg) Butterflyh) Collar inserti) Back boardj) Neck insertk) Scotch Tapel) PP beltm) Carton

4. Labor charge

5. Washing charge (If it is garment wash)

6. Commercial and transportation cost.

+ 10% profitmargin.

(% of profit margins is the distortion of the exporter)

Communication in international business Telephone Conversation.

Fax/ E-Mail

Formal Meeting

Lunch & Dinner

The information normally gets about an order

1. Factory Loading

2. Factory Capacity

3. Factory History

4. Factory Setup Details

5. Market Reputation

6. Type of Buyers Dealing

Opening Master L/C

In that case at first buyer go to his nominated bank to open amaster L/C based on order which both parties selected in theirnegotiation.

Opening BB L/C: In that case based on buyer Master L/C garments representativego for opening BB L/C against master L/C towards his supplier.After completing sending BB L/C here both parties that isbetween supplier and garments representative start theirprocess by following couple of papers work which are givenbelow:

1. commercial Invoice2. Packing List3. PI given by supplier

These are the key documents are transferred between each otherto make this effective and proved. After following this rulessupplier goes for fulfilling buyer requirements.In that case garments representative go for monitoring eachmatter which are doing by his nominated supplier as well as toget confirmation to take those delivery on time.

Different Types of SamplesSequence of sampling

Name of Sampling

1. 1st Pattern

2. 2nd Patterns

3. Counter Samples

4. Sales Man Sample

5. Photo Sample

6. Approval Sample (Size Set, Mock-up)

7. Pre-production

8. Production Sample

9. Shipment Sample

Trims Preparation

Trims cover all the items used in the garment except the basic

fabric. There are hundreds of items used to manufacture the

garments, proper selection of trims and its quality are very

important for styling, otherwise the garment may be rejected

or returned by the customers.

Following is a part of list that covers some names of the

trims:

1. Zipper/Fastener

2. Sewing Thread

3. Main Label

4. Flag Label

5. Button

6. Elastic

7. Eyelet

8. Tags

9. Tag pin

10. Plastic clip

11. Sticker

12. Hanger

13. Poly bag

14. Scotch tape

15. Gum tape

16. Photo Board

17. Back Board

18. Tissue

19. Carton. Etc.

How a merchandiser meet buyer’s requirements

a. Merchandiser detail to buyer about factory profile.

b. Merchandiser Understand the Order sheet.

c. Arrange the all component for order execution.

d. Production Tracking.

e. Timely Shipment.

How a merchandiser track his production in the factory

a. Follow-up yarn supply in factory

b. Knitting follow-up

c. Linking follow-up

d. Accessories supply

e. Finishing follow-up

f. Ready for export

Documentation

Exporters should seriously consider having the freightforwarder handle the formidable amount of documentation thatexporting requires as forwarders are specialists in thisprocess. The following documents are commonly used inexporting; but which of them are necessary in a particulartransaction depends on the requirements of the U.S. governmentand the government of the importing country.

1. Air freight shipments are handled by air waybills, whichcan never be made in negotiable form

2. A bill of lading is a contract between the owner of thegoods and the carrier (as with domestic shipments). Forvessels, there are two types: a straight bill of ladingwhich is nonnegotiable and a negotiable or shipper'sorder bill of lading. The latter can be bought, sold, ortraded while the goods are in transit. The customerusually needs an original as proof of ownership to takepossession.

It is a major document if the goods are dispatched by sea.

The document represents1. A formal receipt for the goods

2. The evidence of the contact of the title to the goods.

A bill of lading may include the following details1. A description of the goods in general terms not

inconsistent with that in the letter of credit.2. Identifying marks and numbers, if any3. the name of the carrying vessel4. evidence that the goods have been loaded on board5. the ports of shipment and discharge6. the names of shipper, consignee and name and address of

the notifies party, if any7. whether freight has been paid in advance or is payable at

destination8. the number of original bills of lading used9. the date of issue10. the departure date of carrying vessel or aircraft

Commercial invoice is a bill for the goods from the seller tothe buyer. These invoices are often used by governments todetermine the true value of goods when assessing customsduties. Governments that use the commercial invoice to controlimports will often specify its form, content, and number ofcopies, language to be used, and other characteristics.

A consular invoice is a document that is required in somecountries. It describes the shipment of goods and showsinformation such as the consignor, consignee, and value of theshipment. Certified by the consular official of the foreigncountry stationed here, it is used by the country's customsofficials to verify the value, quantity, and nature of theshipment.

A certificate of origin is a document that is required incertain nations. It is a signed statement as to the origin ofthe export item. Certificate of origin are usually signedthrough a semiofficial organization, such as a local chamberof commerce. A certificate may still be required even if thecommercial invoice contains the information

A NAFTA certificate of origin is required for products tradedamong the NAFTA countries (Canada, the United States, andMexico).

Inspection certification is required by some purchasers andcountries in order to attest to the specifications of thegoods shipped. This is usually performed by a third party andoften obtained from independent testing organizations.

A dock receipt and a warehouse receipt are used to transferaccountability when the export item is moved by the domesticcarrier to the port of embarkation and left with the ship linefor export.

A destination control statement appears on the commercialinvoice, and ocean or air waybill of lading to notify thecarrier and all foreign parties that the item can be exportedonly to certain destinations.

A Shipper's Export Declaration (SED) is used to controlexports and act as a source document for official U.S. exportstatistics. SEDs must be prepared for shipments through theU.S. Postal Service when the shipment is valued over $500.SEDs are required for shipments not using the U.S. PostalService when the value of the commodities, classified underany single Schedule B number, is over $2,500. SEDs must beprepared, regardless of value, for all shipments requiring anexport license or destined for countries restricted by theExport Administration Regulations. SEDs are prepared by theexporter or the exporter's agent and delivered to theexporting carrier (for example, the post office, airline, orvessel line). The exporting carrier will present the requirednumber of copies to the U.S. Customs Service at the port ofexport. Often, the SED is prepared as a by-product of anotherdocument, the Shipper's Letter of Instructions.

An export license is a government document that authorizes theexport of specific goods in specific quantities to aparticular destination. This document may be required for mostor all exports to some countries or for other countries onlyunder special circumstances.

An export packing list considerably, more detailed andinformative than a standard domestic packing list. It an itemsizes the material in each individual package and indicatesthe type of package, such as a box, crate, drum, or carton. Italso shows the individual net, legal, tare, and gross weights

and measurements for each package (in both U.S. and metricsystems). Package markings should be shown along with theshipper's and buyer's references. The list is used by theshipper or forwarding agent to determine the total shipmentweight and volume and whether the correct cargo is beingshipped. In addition, U.S. and foreign customs officials mayuse the list to check the cargo.

An insurance certificate is used to assure the consignee thatinsurance will cover the loss of or damage to the cargo duringtransit.Documentation must be precise because slight discrepancies oromissions may prevent merchandise from being exported, resultin nonpayment, or even result in the seizure of the exporter'sgoods by U.S. or foreign government customs. Collectiondocuments are subject to precise time limits and may not behonored by a bank if the time has expired. Most documentationis routine for freight forwarders and customs brokers, but theexporter is ultimately responsible for the accuracy of itsdocuments.

The number and kind of documents the exporter must deal withvaries depending on the destination of the shipment. Becauseeach country has different import regulations, the exportermust be careful to provide all proper documentation. Thefollowing sources also provide information pertaining toforeign import restrictions:

Export Assistance Centers The Trade Information Center (1-800-USA-TRADE). Foreign government embassies and consulates in the United

States.

Free on Board (FOB) Your responsibility ends the moment the contracted goods areplaced on board the ship, free of cost to the buyer at a portof shipment named in the sales contract. 'On board' means a'Received for Shipment' B/L (Bill of Lading) is notsufficient. Such B/L if issued must be converted into 'Shippedon Board B/L' by using the stamp 'Shipped on Board' and must

bear signature of the carrier or his authorized representativetogether with date on which the goods were 'boarded'.

Cost and Freight (C&F) You must on your own risk and not as an agent of the buyer,contract for the carriage of the goods to the port ofdestination named in the sale contract and pay the freight.This being a shipment contract, the point of delivery is fixedto the ship's rail and the risk of loss or of damage to thegoods is transferred from the seller to the buyer at that verypoint. As will be seen though you bear the cost of carriage tothe named destination, the risk is already transferred to thebuyer at the port of shipment itself.Cost Insurance Freight (CIF): The term is basically the sameas C&F, but with the addition that you have to obtaininsurance at your cost against the risks of loss or damage tothe goods during the carriage.

All are includes in sourcing negotiation in merchandisingdepartment.

REFERENCE

1. http://www.businessdictionary.com/definition/ sourcing.html#ixzz3PkcctBZQ

2. Souring and Negotiation, edition-4th, edited by Saiful Islam Tanvir, smuct-Dhaka, lecture notes, page: 07.

3. Souring and Negotiation, edition-4th, edited by Saiful Islam Tanvir, smuct-Dhaka, lecture notes, page: 12.

4. Souring and Negotiation, edition-4th, edited by Saiful Islam Tanvir, smuct-Dhaka, lecture notes, page: 16.

5. Souring and Negotiation, edition-4th, edited by Saiful Islam Tanvir, smuct-Dhaka, lecture notes, page: 24.

6. Souring and Negotiation, edition-4th, edited by Saiful Islam Tanvir, smuct-Dhaka, lecture notes, page: 33.

7. Souring and Negotiation, edition-4th, edited by Saiful Islam Tanvir, smuct-Dhaka, lecture notes, page: 35.

8. http://www.outsourcing-law.com/sourcing-models/classic- outsourcing/

9. https://www.google.com.bd/search? q=9.%09+Insourcing+with+Strategic+Consulting+as+Prelude&ie=utf-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-beta&channel=fflb&gws_rd=cr&ei=s6rNVLSCI463ogSojoGABg

10. https://www.google.com.bd/search?q=http:// www.10.overview/&ie=utf-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-beta&channel=nts&gws_rd=cr&ei=AavNVPvDMMrfoAT3uYLACQ

11. http://www.outsourcing-law.com/sourcing-models/ variations-multi-country-outsourcing-vs-single-country-outsourcing .

12. http://www.outsourcing-law.com/sourcing-models/ variations-multi-country-outsourcing-vs-single-country-outsourcing/cing Model

13. Reverse auctions––grounded theory from the buyer andsupplier perspective, Transportation Research Part E 40 page: 229–254.

14. www.elsevier.com/locate/tre 15. http://www.dictionary.com/cgi-bin/dict.pl?

term=organizations16. http://amp.aom.org/content/19/1/46.full#fn-31