Fashion Merchandising TD

8/3/2019 Fashion Merchandising TD

1/62

Fashion Merchandising

Composed and edited by :-

Pramod KumarAssistant ProfessorNIFT Kolkata


2/62

Fashion Merchandising

Fashion Merchandising refers to the planning required to have the rightfashion oriented merchandise at the right time in the right quantities and at theright prices for the target group of customers.

In other words also the performance of all the activities to supply the apparelsneeds and want of potential customers at time and place needed at right

qualities and right quantities, and at a price that is satisfactory to them ( sellerand vendor).

Merchandiser is a person who get converted inspiration into design , usetechnology to conceptualize and address the planning , production, promotionand distribution of products in the fashion industry to meet the consumer needsand demand .

Merchandiser :-


3/62

Concept of MerchandisingMerchandising is a branch of marketing theory and practice concerned withmaximizing product sales by designing, packaging, pricing, and displayinggoods in a way that stimulates higher sales volume. The underlyingassumption in merchandising is that consumers may have a general need for(or interest in) a certain class of product, and it is the merchandiser's task to

present the product in a way that best captures consumers' attention andpersuades them that the product will fulfill their needs and wants.


4/62

An organized Merchandiser should have the

following qualities.

Good technical knowledge of Fabrics and their sourcing ( Woven and Knitted etc.)

Good technical knowledge ( Applications etc) of Trims and Accessories and their sourcing.

Communication skills

Decision Making skill

Managerial skills

Negotiation skills

Mathematical ability


5/62

Fashion Industry- Levels of Merchandising

Export House Merchandising

Buying Agency Merchandising

Retail Organization Merchandising


6/62

Merchandising - involves 6 rights

Right Merchandise

Right Time

Right Place

Right Price

Right Quantity

Right Promotion


7/62

The Merchandising Division

General Merchandise Manager (GMM)

Divisional Merchandise Manager (DMM)

Merchandise Managers (MM)

Sr. Merchandiser

Associates Merchandiser

Assistant Merchandiser

President / Chairman

Managing Director( M.D.)

Marketing /Merchandising

division

ProductionDivision

AccountsandShippingDivision

HumanResource &

Development

Management Hierarchy in an exports company

PD / SamplingDivision


8/62

Lab dip :- A solid color fabric / yarn / threads dyed to match a given color standard.

Lab dips are done to provide a visual aid on how a color will look when it is dyed.Your actual production sample will vary from the lab dip that is provided.Remember that the lab dip is produced in a beaker and is not an actualproduction run.

Merchandising vocabulary


9/62

Color Standards:

When doing a custom color, the customer must provide a reference sample to us of the color requestedand keep a sample swatch for their future reference. The bigger the piece the better chance of hitting the

color. Remember if you provide a sample fabric that has a different fabric content or weight, this willaffect the color matching. If you use a Pantone Color Swatch, the printed colors on paper will lookdifferent than a texturized fabric.

Light source:

D65 --- International-standard Artificial Daylight

TL84 --- Applicable to stores in Europe, Japan and China

F-light ---- Comparison referential light source, Applicable to family/hotel

UV ---- Ultraviolet light source

Color matching Light Box:


10/62


11/62

Mark up:-

The difference between the whole sale price and the retail price of the merchandise or calledmark-on in big retail stores.

Buyer:-

A person whose responsibilities involve the selection and purchase for resale of a category ofmerchandise sold by a retailer to customers.

Fashion :-

A style that is accepted and used by the majority of a group at any one time.

Fashion forecasting:-

A prediction of the trend of fashion as determined by the prevailing elements in all the fashionindustries. Supplied by the fashion coordinators as often and in as much detail as managementrequiresusually on a 6 months or seasonal basis.

L/C ( Letter of credit):-

A document issued by buyers bank (issuing bank) to the advising Bank ( exporters Bank ) at

the request of the buyer in the name of the exporter , when the shipment is ready for delivery ,the letter is presented by the exporter to the advising bank for the payment of shipment.


12/62


13/62

Lead Time:-

A lead time is the period of time between the initiation of any process of production and thecompletion of that process. Or the total time required to complete an order of a particular style.

Inventory :-

Inventory is a list for goods and materials, or those goods and materials themselves, heldavailable in stock by a business.

Forward Buying:-

Purchasing retail inventory (merchandise) in quantities exceeding current demand, usually

when manufacturers, or other suppliers, offer temporary discounts. When the promotionperiod expires, the retailer can then sell the remaining inventory to consumers at regularprices, earning a bigger margin of profit.

Couture:-

Couture is the art and business of manufacturing, designing and selling of highly stylish and

fashionable clothing . Fashion designers and dress designers are known to form a groupcalled couture. The high fashion clothing called couture created by fashion designers isfamous for making a style statement.

Delivery schedule:-

Timing or rate of delivery as required by a buyer, or as agreed between a buyer and a seller,(vendor) for goods or services purchased for a future delivery period.


14/62

FOB Price:-

Free on board (FOB). This pricing term indicates that the cost of the goods, including all transportationand insurance costs from the manufacturer to the port of departure, as well as the costs of loading thevessel are read filed in the quoted price ( Fixed with vendor) .

This means that the buyer has to bear all costs and risks of loss of or damage to the goods from thatpoint. The FOB term requires the seller to clear the goods for export. FOB Price does not includeShipping freight and Insurance charges

C & F Price:-

Term of sale signifying that the price invoiced or quoted by a seller for a shipment does notinclude insurance charges, but includes all expenses up to a named port of destination.In comparison, carriage paid terms include all transport charges (but not insurance) up to a namedplace (usually the buyer's warehouse) of destination.

C.I.F Price:-Cost, insurance and freight" means that the seller delivers when the goods pass the ship's rail in theport of shipment. The seller must pay the costs and freight necessary to bring the goods to the namedport of destination but the risk of loss of or damage to the goods, as well as any additional costs due

to events occurring after the time of delivery, are transferred from the seller to the buyer. However, inCIF the seller also has to procure marine insurance against the buyer's risk of loss of or damage to

the goods during the carriage.B/L - Bill of Lading

Official Legal document signed by the captain, agents, or owners of a vessel, furnishing writtenevidence of the quality and quantity of cargo for the conveyance and delivery of merchandise sent by

sea to a specific destination. It represents ownership of cargo between shipper and carrier.


15/62

Invoice:-

An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products,quantities, and agreed prices for products or services the seller has provided the buyer. An invoiceindicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum

amount of days to pay these goods and are sometimes offered a discount if paid before.

Purchase Order:-

A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types,quantities, and agreed prices for products or services the seller will provide to the buyer. Sending aPO to a supplier constitutes a legal offer to buy products or services. Acceptance of a PO by a seller

usually forms a one-off contract between the buyer and seller, so no contract exists until the PO isaccepted

Designer:-

A designer is a person whose work uses a design process. This means that a designer could beanyone who uses drafts, sketches, conceptual models (perhaps created inside virtual worlds likecomputer programs) to aid in the creation of a work, a product, or an equipment of any scale

Buying Team :-

A Buying team comprises a team of few buyers and Buying Manager leads the team , coachingand supporting them to make the right buying decisions for the business. Its team members role

to take a strategic overview of the market, as well as taking wider economic considerations into

account such as shifting consumer needs, inflationary pressures and competitor activity.


16/62

Business Ethics

Simply put, ethics involves learning what is right or wrong, and then doing theright thing -- but "the right thing" is not nearly as straightforward as conveyed in

a great deal of business ethics literature. Most ethical dilemmas in theworkplace are not simply a matter of "Should Bob steal from Jack?" or "ShouldJack lie to his boss?"

Many ethicists consider emerging ethical beliefs to be "state of the art" legalmatters, i.e., what becomes an ethical guideline today is often translated to alaw, regulation or rule tomorrow. Values, which guide how we ought to behave,

are considered moral values, e.g., values such as respect, honesty, fairness,responsibility, etc. Statements around how these values are applied aresometimes called moral or ethical principles.

The concept has come to mean various things to various people, but generallyit's coming to know what it right or wrong in the workplace and doing what's

right -- this is in regard to effects of products/services and in relationships withstakeholders. Consequently, there is no clear moral compass to guide leadersthrough complex dilemmas about what is right or wrong.


17/62

Ethics programs help avoid criminal acts "of omission" and can lower fines.

Gap has been in the forefront of attention in the past couple of years due to human rightactivists bringing Gap business practices to the chopping block. The problems that will be

discussed regarding Gap Inc. are the labeling issue, human rights, and child labor. First, itneeds to be pointed out that Gap isn't the only retailer that is questioned when it comes toethical taste and human right vulnerability. Wal-Mart, J.C. Penney Company, Dayton-Hudson, Levi, Calvin Klein to name a few, have also been brought forth to the spotlightwhen human right issues have been mentioned.


18/62

Specimen ofPerforma Invoice


19/62

Tech pack:-

A tech pack is informative sheet which encompasses all the specifications of the requirements

before embarking on the garment manufacturing process. contains all the details of any specificstyle of the garment. This document is usually prepared by the designer and finalized in consultationwith the merchandisers, and then forwarded to bulk sampling department or to the productiondepartment for the reference and guide for bulk manufacturing.

Garment SpecSheet:-

GSS (Spec sheets) are important to monitor all aspects of your product. spec sheets should besimplified- including a front and back sketch, brief description, stitching and print detail such as no ofcolors to be used and the actual size of the print, sample size and, fabric swatches with fiber contentinfo, lining and trim information, season, delivery date, size range and style number etc There is a lotof other information such as labels or hang tag wash care etc and there placement.

Sampling:-

Sampling is process of development of a garment according to the tech-pack received by a buyer orcopying of a garment with specifications de-marked by the buyer. Their are different stages ofsampling. Sampling helps in proper development of a product and it also acts as a milestone to inthe confirmation of an order.


20/62

Womenswear

Cami

Block Ref -

Department: 4201/ Georgina Reynolds Supplier: Dhruv Global TU Technologist: Maxine Hodgson

Buyer: SS10 Factory: Dhruv Global Supplier Technologist: Hemendra Sharma

Season/Delivery Date: Cutwork Detail camisole Supplier Style Number: FS 975 Model: 0

Description: Tayberry red TU Style Number: 118496890 Size Bridge: 8-22

Measuring PointsSize

08

Size

10

Size

12

Size

14

Size

16

Size

18

Size

20

Size

22

Bust Flat -5.0 -2.5 0.0 2.5 6.3 8.8 11.3 13.8

Bust @ Fullest 40.0 42.5 45.0 47.5 51.3 53.8 56.3 58.8

Waist 38.0 40.5 43.0 45.5 49.3 51.8 54.3 56.8

Hem 55.0 57.5 60.0 62.5 66.3 68.8 71.3 73.8

Centre Front Length 62.0 63.5 65.0 66.5 69.0 70.5 72.0 73.5

Centre Back Length 53.0 54.5 56.0 57.5 60.0 61.5 63.0 64.5

Apex to Apex - Front 24.0 25.0 26.0 27.0 28.5 29.5 30.5 31.5

Apex to Apex - Back 16.0 17.0 18.0 19.0 20.5 21.5 22.5 23.5

Total Strap Length 30.5 30.5 30.5 30.5 30.5 30.5 30.5 30.5

Front Neck Drop 3.4 3.7 4.0 4.3 4.6 4.9 5.2 5.5

Cup Depth 18.6 19.3 20.0 20.7 21.4 22.1 22.8 23.50 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

ADDITIONAL MEASUREMENTS

Canter Front Edge to Ed 0.0 0.0 65.0 0.0 0.0 0.0 0.0 0.0

Canter Back Edge to Ed 0.0 0.0 56.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.00

Size Chart

A 2.5cm down from underarm, straight across

0

00

0

0

0

I from apex to apex line to CF seam

J Apex to under bust seam

0

0

0

0

0

0

0

All measurements are in cm's

Where To Measure Guide -

For Illustrations See Sketch Page

D CF neck seam to bottom edge of hem

E CB neck seam to bottom edge of hem

F distance between apexes FRONT, straight across

A1 2.5cm down from underarm seam, folded over

B 41cm down from snp, straight across

C bottom of hem, straight across

G distance between apexes BACK, st raight across

H total st rap - front seam to back seam


21/62

Types of samples :

Presentation sample Proto samples Fit Sample Photo shot sample Sales man samples SMS Size-Set Sample Sealer sample Pre- Production sample (P/P ) Top of the Production sample. ( TOP)


22/62

Buyer (Buying Office ) and Exporter meeting( All payments terms and condition, business agreement, shipping and Bank

Details etc are discussed )

Commencement of Business

(Tech packs are issued by the buyer for the sampling , Pricing etc to Vendor )

Sampling process starts at an export house ,Patterns are made, fabric and trims are sourced, print and embroidery design are

given for developments to other suppliers etc.

Sampling AND Order execution process in an exports houses

Costing of Sampling( Costing of the sampling is done after or before the samples are made by the

Merchandiser and has to get it approved from the MD before sending it ti the

buyer)


23/62

Samples ( Presentation) are Dispatch

(Once samples are made , has to be properly checked by the

Merchandiser for i.e. Print / color / look / Hand feel / measurements

/ Labels placements etc )

Order confirmation on the basis of Sampling and Price( Orders are booked with buyer of the selected styles from the sampling done

Tech pack / P.O of the same are etc. are issued by the Buyer to the exporter )

Order Processing Process start in an export house

(Tech pack are given to the sampling for marker planning , Fabric ,

trims etc are ordered , further sampling of Proto, Fit, SMS samples

etc. are started in an export house )

Process of L/C Opening from the buyer etc. Begins

Ordering of Bulk Fabric, trims and accessories are done by the,Complete B.O.M. is made by the merchandiser.


24/62

Proto sampling ( Size M)

(For Look and Appearance, Hand feel etc )

Fit Sample ( Size M )( For Size and Fitting can be made in substitute color and Fabric )

Size set sampling(After Receiving Fit comment s and once Bulk fabric and trims etc are in house

the S/S Samples are made in all the sizes )

Sealer samples ( Size M)( Becomes the guide line for the entire production

Sealed and signed by the Buyer or buying house merchandiser)

Photo shot samples are made for the catalogue buyers only at thebuyers request in one or two sizes.

Pre-Production samples (Size M)( P/P samples are made in original colors , Fabrics, with all labels

and trims attached at the right places before the actual bulk

production get started)

Approval of all the Bulk Fabrics ,Trims and accessories etc are to be takenIn written from the buyer or buying house merchandiser . And Fabrics andtrims are sent for Labtesting as advised by the buyer in a recognized Lab.


25/62

Production Planning( A complete production planning with the production and quality team and handing over

Production file and all original samples approved by the buyer etc.)

Initial Inspection( A pilot run or initial inspection is done by the buying house Q.A. as offered by the

production department in order to check the quality as advised by the buyer generally

4 to 5 samples are made in each color and size for this purpose and make a report with

comments (If Any) and these will be incorporated in next inspection)

Online inspection(Inspection offered by export house to buyer when production is running on the stitching

m/c , Buyers QA will take the pcs randomly from each line to check the quality and

make a report with comments (If ANY ) will be improved before the next inspection)

T.O.P sample ( Size M )

TOP Samples are sent to the buyer in all colors with all original Trims, packingmaterial for approval before the shipment is dispatch to the buyer .

Final inspection( The last inspection offered to the buyer when all the units are packed in cartons )

Dispatch the shipment


26/62

Working on the initial sampling (Presentation samples) of the buyer as per theirspecification, Instructions and measurements.

Pricing (costing) of all these samples, negotiations and confirming and bookingorders with the buyers Sourcing various types of inventory (Raw-materials, trims etc.)required to complete an order.

Production planning with the production department after getting in house all theinventories ( Bulk Fabrics & Accessories trims).

Sending all the important samples, Fabrics & Trims for approvals like proto sample,jump size-set, size set, sealer sample, pre-production Samples, T.O.P. samples to thebuying house and getting approval form the buyers.

Communicating with the buyers regarding all the important issues and up-datingthem about Daily production status.

Sending fabrics and garments for various tests in testing labs like SGS, MTL, ITS,

as per buyers requirements .

Giving Buyers a complete TIME & ACTION plan For a particular order or style.

Updating the buyer about the production status of all the orders and sampling runningin the company on either daily or weekly basis.

Working on the New sampling (Development )for the next seasons.

Job Profile of a Merchandiser in an export house Role


27/62

A garment export house generally has many departments like Sampling, cutting, stitching, finishing,packing, washing, Fabric and Trims stores, Accounts , shipping and dispatch departments, etc. inwhich Merchandising department a linking device of all . The job of a merchandiser is to co ordinate

with the all these departments in the Company as well as the Buyers.

Merchandiser meets the buyers and collects the details ( Tech Pack , Shipping, Bank details )of theirrequirements etc. to develop the relationship with the Buyers.

A Complete tech pack is received from the buyer with or without sample .A general format of thespec sheet contains the sketch of the garment on the one side and the measurement on the otherside. A complete stitching detail, placement and design of embroidery or printing, Artwork of designfor print / embroidery , additional accessories, color and type of buttons, threads etc. are mentionedin the tech pack. Wash care label details are mentioned. Type, size, color and shape of the buttonsare given. Placement of labels, prints, embroidery are given . Packing instructions are also given inthis sheet which includes type, color size of the carton, marks and numbers to be printed on it, polybags size and details printed on it, clips ,boards, tissue papers, required fold etc., A complete Bankand Shipping details are also taken at the time of Buyers meeting.

Detailed study is made from the spec sheet and the raw materials required for sample making isordered by the merchandiser which includes fabric, thread, buttons, zips, labels, etc., The color andquality of the things ordered is approved by the merchandiser.Also the merchandiser should contact printing unit, dyeing unit, embroidery unit to make samples ofprinting, dyeing, embroidery respectively. This is also approved by the merchandiser.Some times garments will be dyed after stitching, care should be taken while ordering raw materialsfor this, since the accessories should not catch dying color. Also the thread used to stitch thesegarments must choosy, depending upon the buyers request whether to get the dying color or not.

Ready to dye thread should be used if the thread should be dyed after stitching.

Role of A Merchandiser in an export Houses


28/62

Sample pieces are made and sent to the buyer for approval. The corrected samples are made and sent ifthe buyer required the same. After the sample is approved by the buyer or even before that, costing sheetis prepared by the Merchandiser. In costing sheet ,the price of the fabric, accessories, prints, overheads,Packing and finishing, Mark-up etc per garment is listed. This cost is got approved from the Manager orthe person concerned and quoted to the buyer.

Purchase order (PO) is received from the buyer which includes PO no/date Buyer/Consignee Garment no measurement the description of the garment L/C date

Last date within which shipment to be reach the destination. Sign and seal Order validity date

After receiving PO from the buyer merchandiser issues PO for the fabric Department, buttons, thread,dyeing unit, printing, embroidery and other raw materials. These raw materials are checked and color,

quality and size approved by the merchandiser.

After discussing with the production manager, Work Order is issued to all the departments bymerchandiser along with the trim sheet. Work order consists of order no and description of the order. Trimsheet is a sheet in which the sample piece of fabric and accessories are stuck and distributed to the entiredepartment for them to be aware of trims used for a certain order. Approved sample piece is sent alongwith this work order to the cutting department first from where it passes to all the departments the rawmaterials pass through.


29/62

The bulk fabric is passed through the cutting dept, stitching dept, washing or dyeing unit, and thenthe packing department. As per the requirement printing or embroidery is done after stitching orcutting.

In packing department merchandiser checks and approves a piece for the type of packing and the

packing materials. After packing in the individuals packages, they are packed in the cartons. Thecarton thickness, size, color etc., are instructed by the merchandiser to the packing department asper the buyers requirement. Number of pieces to be packed and the marks and numbers to be

printed on the carton is also instructed by the merchandiser to them. A packing list is prepared bythe Merchandiser with all the packing details mentioned in it and given to the packing department.


30/62

Role of a merchandiser in a Buying House

Buyer(Importer)

Exporter(Vendor)

Buying House

Buying house Merchandiser

Send andReceive Mails

Send andReceive Mails

R l f M h di i B i H


31/62

Role of Merchandiser in a Buying House

A buying house merchandiser work as an agent between Buyer and the vendor. he / sheis basically work as a representative of the buyer and work on behalf of the buyer and takea complete care and responsibility of his account, which start from the productDevelopment process and end at the dispatch of the shipment of the same. He

communicates with the buyers on behalf of the vendor regarding all issues arise in the insampling, production, payments , L/C, Dispatch of shipment etc. some of the maincontents of his profile are discussed as below.

A merchandiser Can be looking after one account / one division of a buyer but many exporters(vendors) at time.

Communicate with Buyers and vendors everyday regarding all the issues arise in sampling,

Productions and other related matters.

Merchandiser are responsible for- Product Development, costing, negotiations , delivery-schedules, production-planning etc.

Responsible for vendor selection and development on the basis of their competency.

Approve color lab-dips, Various samples, Bulk Fabric lots, trims, etc required for an order or productdevelopment on behalf of the buyer as per the standard and specification provided by the buyer.

up date the buyer on daily or weekly basis about the sampling and production status.

coordinate the merchandise department with other departments of the buying office like Q.A., Accounts and shipping.

Make production file and give a copy of the same with original sample to the Q.A. department for various inspections

to be done for an order.

Arrange buyer vendor meetings for next season development.


32/62

Buying Offices

Generally located in a major city of the foreign buying area and facilitates indirect exporting

They are independent buying agencies and are also known as Foreign Commissionaires

They work for many buyers/retailers

They often organize buyer manufacturer meet in their offices and also take the buyers tovisit manufacturer's facilities.

They must have very strong vendor base with them.

They do not make purchases for the client unless authorized to do so.

The client pays them fee usually a percentage of the first cost

They then follow up to make sure the delivery is made on time and the quality is checked


33/62

Liaison office ( Companys own Buying Office) Companys owned buying offices.

Located in major fashion centers & in exporting bases of the world

Advise buyers about new trends

Accompany buyers on their market visits acting as interpreters and planning

market itineraries

Because of their broad & strong base in the local market they get the best

resources according to the need of the buyer

Function as a follow up service to ensure prompt delivery and quality control

Each liaison office works as a separate profit centre

Types of stores that have such offices are GAP,NIKE


34/62

Merchandisers are responsible for ensuring that products appear in the right store at the appropriate time and in the correctquantities. This involves working closely with the buying teams to accurately forecast trends, plan stock levels and monitorperformance. While the buyer selects the lines, the merchandiser decides how much money should be spent, how many linesshould be bought, and in what quantities. In smaller companies, the same person may be responsible for both buying andmerchandising.

Merchandisers play a key role within organizations, as profitability can be affected by how successfully they undertake their work.Merchandisers set prices to maximize profits and manage the performance of ranges, planning promotions and markdowns asnecessary. They also oversee delivery and distribution of stock and deal with suppliers.

Typical work activities

Planning product ranges and preparing sales and stock plans in conjunction with buyers;

Liaising with buyers, analysts, stores, suppliers and distributors;

Maintaining a comprehensive library of appropriate data;

Working closely with visual display staff and department heads to decide how goods should be displayed tomaximize customer interest and sales;

Producing layout plans for stores;

Forecasting profits and sales, and optimizing the sales volume and profitability of designated product areas;

Planning budgets and presenting sales forecasts and figures for new ranges;

Role of a merchandiser in a retail store ( Company )


35/62

Controlling stock levels based on forecasts for the season;

Using specialist computer software, for example to handle sales statistics, produce salesprojections and present spreadsheets and graphs;

Analyzing every aspect of bestsellers (for example, the bestselling price points, colors orstyles), and ensuring that bestsellers reach their full potential;

Monitoring slow sellers, and taking action to reduce prices or set promotions as necessary;

Gathering information on customers reactions to products;

Analyzing previous season's sales and reporting on the current season's lines;

Making financial presentations to senior managers;

Accompanying buyers on visits to manufacturers to appreciate production processes;

Meeting with suppliers and managing the distribution of stock, by negotiating cost prices,ordering stock, agreeing timescales and delivery dates, and completing the necessary

paperwork;

Identifying production and supply difficulties and dealing with any problems or delays as theyarise;

Managing, training and supervising junior staff.


36/62

Calendar Planning for An Order

Order management

Process plan orTime and Action Plan for a particular order / style.


37/62

# Style no Buyer : 12/01/2011

P O No 18/01/2011

Division : Description : 120 Days

Quantity: Ref No:- 12/10/2010

SN1

2

3

4

5

6

7

8

9 Sending Invoice and Other documents to buyer For L/C opening

1011

12

13 sending Lab-dips comments to the supplier

14

15

16 Initial bulk fabric lot approval from buyer

17

18

19

20 Sending Fabrics and trims for Various testing in Labs Like SGS, ITS etc.

2122

23 Pre-Production Meeting and Handing Over the production file to P.manager

24

25

26

27

28

29

30

28

Packing 27-Dec-10

1246897 Date of receiving order

Date of order Date of Receiving

23-Dec-10 N/A

Time And Action Plan ( Calender Planning)

Remarks

Ex-Factory Date :

Ex-Shipment Date :

Description

14-Oct

25000 pcs

# OO7

APCL 04758956 TD - V NIFTMerchandiser :-

Old Navy

Lead TimeShirt with long sleevesOld Navy Men's Wear

Fabri cs and tri ms ordered / procure for proto 13-Oct-10 14-Oct

13-Oct-10 24-Oct

Tech Pack and P.O. Received

Patterns for proto samples

12-Oct-10N/A

13-Oct-10

Buyer's comments on PROTO Samples sent

Lab-dips for developments in all colors

27/10/2010N/A

B.O.M s heet Preparati on for Fabri cs and Tri ms and orderi ng wi th suppl iers 15-Oct-10 30-Nov-10

PROTO Samples for development 14/10/2010 17/10/2010

Fit sample development 27-Oct-10 29-Oct-10

15-Oct-10 25-Oct-10

Sending Lab-dips for Bulk Approval to Buyer 27-Oct-10 29-Oct-10Fit sample comments from Buyer N/A 05-Nov-10

size-set samples 05-Nov-10 10-Nov-10

29-Oct-10 N/A

10-Nov-10Sending size set samples to the buyer for Comments 15-Nov-10

Initial Bulk Lot of fabrics from supplier 30-Nov-10 30-Nov-10

01-Dec-10 02-Dec-10

Trims in house and sending for buyers approval 30-Nov-10 02-Dec-10

Sealer sample development 01-Dec-10 04-Dec-10

Sending Sealer sample for buyers comments 04-Dec-10 06-Dec-10

03-Dec-10 08-Dec-10

Maki ng Pre-Producti on Sampl es 03-Dec-10 05-Dec-10Sending P/P sample for Approval to the Buyer 05-Dec-10 08-Dec-10

10-Dec-10 N/A

Cutting 12-Dec-10 27-Dec-10

15-Dec-10 03/01/2011

25-Dec-10 08/01/2011

Stitching

Finishig

Inline-Inspection / Pilot run / Initial Inspection 18-Dec-10 N/A

Online insection

10/01/2011

Dispatching 12/01/2011 N/A

Final Inspection 11-Jan-11 N/A


38/62

Cost is the cumulative total of resources that are directly used in the process of makingvarious goods and products.

factors such as labor, equipment operation, and the general overhead for maintaining theproduction facility are common components that are included in determining theoverall manufacturing costs.

Cost

Fixed :-

A cost that remains constant, regardless of any change in a company's activity. in short run

& long run.Variable:-

A cost of labor, material or overhead that changes according to the change in the volumeof production units.Semi-variable:-

A cost composed of a mixture of fixed and variable components. Costs are fixed for a setlevel of production or consumption, becoming variable after the level is exceeded. Alsoknown as a "semi-fixed cost.

For example, a manufacturer's electricity bill may include elements that are fixed (such aslighting that is required regardless of the level of production) and elements that arevariable (such as the electricity used by machinery directly involved in manufacturing


39/62

A cost that can be directly related to producing specific goods or performing a specificservice. For example, the wages of an employee engaged in producing a product can be

attributed directly to the cost of manufacturing that product. Certain other costs such asdepreciation and administrative expenses are more difficult to assign and are notconsidered direct costs.

Indirect cost:-

A cost that is not directly related to the production of a specific good or service but that is

indirectly related to a variety of goods or services. For example, the cost ofadministering a large company is an indirect cost that must be spread over a number ofproducts or services. Also called overhead.

Direct cost :-


40/62

Elements of cost:-

1. Material:-(Material is a very important part of business)A. Direct material

B. Indirect material2. Labor:-A. Direct laborB. Indirect labor

3. Overhead:-A. Indirect material

B. Indirect labor

They are grouped further based on their functions as,

1. Production or works overheads

2. Administration overheads

3. Selling overheads

4. Distribution overheads


41/62

Vendor Management

Vendor Management


42/62

Vendor Management is the management and control, by an entity, of those third partiesthat supply goods and/ or services to that entity.

Vendor management is the discipline of establishing service, quality, cost, and satisfactiongoals and selecting and managing third party companies to consistently meet these goals.

Establishing Goals Just as employees need clearly established goals, operations need clearlydefined performance parameters. When selecting or managing vendors, vendor managers mustoptimize their opportunity to achieve these goals by using third parties companies.

Selecting Vendors The fine art of vendor management is essential to optimizing operationalresults. Different vendors have different strengths and weaknesses, and it is the vendor managersresponsibility to match the right company with the desired performance characteristics. Failure toconsider this comprehensively could lead to complete failure.

Managing Vendors On a daily basis, vendor managers must monitor performance, providefeedback, champion new projects, define or approve/disapprove change control processes, and develop

vendors. Theres a tremendous amount of detail to this aspect of the discipline, and weve covered thisin many posts here.

Consistently Meet Goals Operations must perform within statistically acceptable upper and lowercontrol bounds. Everything the vendor manager does should focus on meeting goals, from providingforecasts to defining requirements, from ensuring vendors have adequate staff to ensuring the staff havecompleted all required training

Vendor Management


43/62

Managing Vendors and Suppliers

It is just as important to communicate with your suppliers and vendors as it is tocommunicate with your customers. Establishing the proper communication channels andinformation flows between you and your suppliers can lead to increased efficiencies,reduced costs and better customer service. This section will cover the simplecommunication methods (i.e. telephone) and other ideas that will allow your company tobuild a win-win relationship with your suppliers and vendors.

Vendor Selection - How to Select a Vendor

The Successful Vendor Selection Process

The vendor selection process can be a very confusing, complicated and emotionalundertaking if you don't know how to approach it from the very start. Here are fivestraightforward steps to help you select the right vendor for your business.

Step #1: Analyze Business Requirements

The toughest part of the vendor selection process is analyzing the business requirements.This guide will show you how to accomplish this and gain consensus across all thestakeholders before you begin the vendor selection process.


44/62

Step #2:Vendor SearchThe second part of the vendor selection process is to perform a comprehensive vendorsearch and create a "short list" of vendors to pursue. Done correctly, this will position yourbusiness to find the right vendor and create a competitive atmosphere between competing

vendors. This guide will show you how.

Step #3: Request for Proposal (RFP) and Request for Quotation (RFQ)

The third part of the vendor selection process is to write a Request for Proposal (RFP) orRequest for Quotation (RFQ). A well written RFP or RFQ is the critical success factor in theentire vendor selection process. This guide will show you how to create a document that will

detail the needs and expectations of your company.

Step #4: Proposal Evaluation and Vendor SelectionIn the vendor selection process, this is the most crucial step of all. Lack of preparation andnot paying attention to detail can lead your vendor selection team to recommend the wrongvendor for your company. This guide will help you organize your selection process and lead

your team to a unified vendor selection decision.

Step #5: Contract Negotiation StrategiesThe final stage in the vendor selection process is developing a contract negotiation strategy.Successful contract negotiation means that both sides will gain from coming to an agreement.This guide will show you how to plan a successful contract negotiation strategy


45/62

Vendor Compliances ( Suppliers Cost of Conduct)

Vendor compliance" are the rules by which vendors (Exporter) will conduct business withtheir Buyers (customers). Vendors do not typically have a say in the rules of vendor-compliance; they are set up by the Buyer (customer). As such, vendor compliance ruleshelp companies streamline and standardize their internal procedures for dealing withvendors, but the vendors must make adjustments to their operations to react to theircustomer's requests.

General Principles:-

1. Forced Labor:-There shall be no use of forced labor in any form, whether in the form of prison labor, indentured labor,bonded labor or otherwise.

2. Child LaborNo person shall be employed at an age younger than 15 or, in the alternative, younger than the age forcompleting compulsory education in the country of manufacture where such age is higher than 15.

3. Harassment or Abuse:-Workers shall be treated with respect and dignity. Workers shall not be subject to any physical, verbal,sexual or psychological harassment or abuse in connection with their employment.

4. Non-discrimination:-Workers should be employed and compensated based upon their ability to perform their job, not on thebasis of gender, race, age, color, national origin, disability, citizenship, veteran status, marital statussexual orientation, religious or cultural beliefs.


46/62

5. Health and Safety:-Employers shall provide a safe and sanitary working environment in order to avoid preventable work-related accidents and injuries.

6. Freedom of Association:-

Employers shall recognize and respect the right of employees to freedom of association and collectivebargaining.

7. Disciplinary Practices/Coercion:-

Employer should not use physical or mental disciplinary tactics. Further, no employee should be subject to

threats of violence, sexual harassment or psychological abuse.

8. Wages and Benefits:-

Employers should recognize that wages are essential to meeting their employees basic needs. Employers

shall pay workers for all work completed and shall pay at least the minimum wage required by law or the

prevailing industry wage, whichever is higher, and shall provide legally mandated benefits.

9. Work Hours:-

Except in extraordinary business circumstances, employees shall (i) not be required to work more than thelesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hoursallowed by the law of the country of manufacture or, where the laws of such country do not limit the hoursof work, the regular work week in such country plus 12 hours overtime and (ii) be entitled to at least one

day off in every seven day period. . Workers shall not be asked or required to take work home or offpremises.


47/62

10. Overtime:-It is understood that overtime is often required in the manufacturing process. In addition to compensationfor regular hours of work, workers shall be compensated for overtime hours at such a premium rate as

legally required or, in countries where there is no legal standard, at industry standards. In no event shallthis be at a rate less than the regular hourly rate. Factories shall carry out operations in ways that limitovertime to a level that ensures productive and humane working conditions.

11. Compliance with Laws:-

All Standards set forth in this Vendor Compliance Policy are subject to compliance with applicable local

law. All vendors shall operate in full compliance with the laws of their respective country of manufacture.If any standard set forth in this Policy is, in the vendors judgment, deemed to violate an applicable local

law, it must advise Buyer promptly in writing.

12. Subcontractors:-

Subcontracting without the prior written consent of Buyer is prohibited. Penalties for subcontracting

without Buyers prior written consent will include loss of future business. All approved agents ofContractors are held to same standards, policies, rules and regulations of principal contractors.

13. Environment:-

Buyers favor only those suppliers that shares their commitment to preserving our environment byreducing, re-using and recycling. Buyer encourages suppliers to reduce excess packaging and to use

non-toxic, environmentally friendly materials whenever possible.

E D


48/62

Exports Documents

Letter of Credit:-

L / C

A document issued by buyers bank (issuing bank) to the advising Bank ( exporters Bank ) atthe request of the buyer in the name of the exporter , when the shipment is ready for delivery ,the letter is presented by the exporter to the advising bank for the payment of shipment.


49/62

LETTER OF CREDIT

A letter of credit is a guarantee from a bank that a specificobligation will be honored by the bank if the borrower fails topay.

Letters of credit can be useful when dealing with new vendors

who may not be assured of a company's credit worthiness. The bank would then offer a letter of credit as an assurance to

the vendor of payment. Although no funds are paid by thebank.


50/62

(2) Bill of Exchange:-

Bill of exchange is an instrument, containing a written, an unconditional order byone party (the drawer) to another ( the drawee) to pay a certain sum of money , either

immediately (the sight bill) or on a fixed date (the term bill), or payment of goods and/or services received. The drawee accepts the bill by signing it, thus converting it into apost-dated check and a binding contract .


51/62

7. Documents

3. Letter of Credit

ApplicantImporter/Buyer

Exporters Bank/

Advising Bank

Importers Bank/

Issuing Bank

Buyer & Seller Agree

6.Documents 8.

Documents

2.Application

1. 1.

5. Productis Shipped

2.

9.

10.

Export Letter ofCredit Cycle

4.Letter ofCredit

BeneficiaryExporter/Seller


52/62

52

DOCUMENTARY COLLECTIONS

Buyer/Importer Seller/Exporter

Sellers BankBuyers Bank


53/62

53

L/C

L/CL/C

Application

Buyer/ ImporterApplicant - 1

Seller/ ExporterBeneficiary - 4

Advising BankConfirming Bank

Negotiating Bank -3

Issuing Bank2

TRANSACTIONCYCLE


54/62

54

DOCs

DOCs

DOCs$

$

$

MerchandiseBuyer/ Importer - 8,9b Seller/ Exporter - 5,11

Advising BankConfirming Bank

Negotiating Bank - 6,10Issuing Bank - 7,9a


55/62

Parties to the Letter of Credit :-(1) Applicant (Buyer)

(2) Beneficiary ( Seller)

(3) Issuing Bank

(4) Advising Bank


56/62

DOCUMENTS COMMONTOAN EXPORT L/C

Commercial Invoice

Packing List

Bills of Lading

Certificate of Origin Other Certificates: Quality, Inspection

Insurance policy or certificate

B L C


57/62

BENEFITSOF LETTERSOF CREDIT

To the Exporter:

Payment protection

Reliance on issuing banks credit

rather than buyers

Rapid, local source of repayment,if payable at a U.S. bank

To the Importer:

Documentary evidence that theordered goods have beenshipped on time

Assurance that necessaryclearance documents will beprovided

Payment deferred until goods areshipped and documentspresented (use of funds)


58/62

Types of Letter of Credit:-

(1) Revocable

(2) Irrevocable

(3) Revolving

(4) Back to Back

(5) Transferable

(6) Stand by

(1) Revocable LC:


59/62

(1) Revocable LC:

Revocable Letter of Credit means the payment against this L/C CAN BE REVOKED BY THEISSUING BANK. The buyer may either amend the Letter of Credit or cancel it without theapproval of the seller. The payment against this instrument is not for sure and hence thistype of Letter of Credit is not commonly used. The Seller has meager chances to get loanagainst this type of Letter of Credit.

(2) Irrevocable LC:

Irrevocable Letter of Credit cannot be cancelled. This seller is assured of payment for his

supply of goods/services provided all terms and conditions of L/C ARE CONFORMED TO.This mode of payment is generally used in international trade transactions. As the paymentagainst this instrument is guaranteed by the issuing bank and the holder of this instrument(seller) can borrow short term finance from any other bank or lending institution AT A VERYLOW RATE OF INTEREST and within a very short time.

(3) Revolving Letter of Credit:This type of Letter of Credit is used when the delivery of goods is in form of partial/ multipleshipments. This type of Letter of Credit keeps on revolving and is not restricted to a singletransaction. This type of L/C can be utilized for subsequent business transactions over aperiod of time on a continuous basis to the extent of limit sanctioned. The seller/buyer doesnot have to go to the bank for sanction of fresh limits every time he gets a new order forexecuting the same.

(4) Back to Back LC:-


60/62

(4) Back to Back LC:

In this type of Letter of Credit, one Irrevocable Letter of Credit facilitates the seller to obtainanother Letter of Credit. To obtain the Back to Back Letter of Credit the permission of theBuyer or the applicant of the first Letter of Credit is not required. This type of Letter of Credit

is generally used by the middleman or agencies to hide the identity of the real suppliers ormanufacturers. The seller can utilize this Irrevocable Letter of Credit as a security for hisbank, to issue an L/C IN FAVOUR OF HIS SUPPLIERS in order to get a very competitiverate for his purchases and increase his profit margin in the process. Thus this can very wellbe used by the seller to raise quick funds and complete his orders in the scheduled time.

(5) Transferable LC:-

Under a transferable letter of credit a beneficiary (the first beneficiary) can ask theissuing/advising/confirming bank to transfer the letter of credit in whole or in part to anotherparty/ies such as supplier/s (second beneficiary/ies). A transferable letter of credit is usuallyused when the beneficiary is not the manufacturer/original supplier of some/all of thegoods/services. This process enables the beneficiary to pay the manufacturer/original

supplier by letter of credit. If the bank agrees, this bank,

(6) Standby :-

Standby letter of credit :-Guarantee of payment. If the beneficiary does not get paid from its customer it can then

demand payment from the Bank by forwarding the copy of the invoice that was not paid andsupporting documentation.


61/62

Transports Documents

(a) Mate Receipt:- Mate receipt is a receipt issued by the commanding office of the shipwhen the cargo is loaded with the shipment .

(b) Bill of Lading:- A bill of lading is a type of document that is used to acknowledge thereceipt of a shipment of goods. A transportation company or carrier issues this documentto a shipper. In addition to acknowledging the receipt of goods, a bill of lading indicatesthe particular vessel on which the goods have been placed, their intended destination,and the terms for transporting the shipment to its final destination.

(c) Airway Bill/ Air consignment note:- Air Waybill (AWB) or air consignment note refersto a receipt issued by an international airline for goods and an evidence of thecontract of carriage. The Air Waybill (AWB) is the most important document issued by acarrier either directly or through its authorized agent. It is a non-negotiable transportdocument. It covers transport of cargo from airport to airport.


62/62

Documents for Customs

(1) Shipping Bill / Bill of Exports:-

Customs document used where drawback is claimed, such as on goods exported or ondutiable goods transshipped or re-exported from a bonded warehouse. Shipping bill isprepared when ever any exporter is exporting any goods from his country to anothercountry.It is the procedural requirement which may vary from country to country . The shipping bill

is prepared in the name of the exporter reflecting the goods, its quantity to be exported

along with price. It can be prepared by the exporter or its agent. The shipping bill preparedshould be entered in the data base of the Customs Authorities or their authorizedrepresentatives office for authentication / approval.

This process must be done in advance, before shipment.