COMPANY PROFILE

Arvind Lifestyle Brands Limited is a subsidiary of Arvind Ltd which is Indias largest
integrated textile player and is one of the oldest and most respected groups in the Textile
Business in India. Arvind is also one of the largest producers of denim fabrics and is supplier
to a large number of fashion brands in the world. Arvind has been a pioneer in bringing
international brands to India and first brought ARROW to India in the year 1993. Arvind has
licensing relationships with many international brands including GAP, TCP, Gant, Nautica,
Aeropostale, Arrow, Izod, US Polo Association, Sephora, Elle, Ed Hardy, Hanes, Cherokee
and Geoffrey Beene. Arvind also has a portfolio of 12 of its own brands. Arvind has recently
launched stores of marquee retailers Gap and The Childrens Place. Arvind has a JV with
PVH Corp. for the Tommy Hilfiger and Calvin Klein businesses in India. It also runs the
value retail chain, Megamart. The company sells through more than 1000 exclusive brand
stores and 1200 counters across India.

Arvind was once considered a non-serious apparel brand and retail player after it sold its 40
per cent stake in its joint venture with VF, thereby letting go of the Lee and Wrangler brands.
But the textile conglomerate has come a long way since then evident from its decision last
month to acquire the India operations of international apparel brands Debenhams, Next and
Nautica. The three global brands have added a few more feathers to Arvind Lifestyle Brands,
subsidiary of Arvind Ltd, which already boasts of an impressive kitty comprising Tommy
Hilfiger, US Polo Assn., Elle, Geoffrey Beene, Arrow and the likes. What's more, acquiring
the business operations of Debenhams also means Arvinds foray into the department store
segment.
Most companies these days are investing in being a brand footprint player and Arvind is one
of them. It already has its own brand. This acquisition is in tandem with Arvinds vision to
be such a player, says Harish Bijoor, CEO of Harish Bijoor Consults Inc.
This should not be difficult for Arvind, given the experience it has in managing the Indian

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franchise of international brands. For instance, in the mass sportswear segment, the company
already claims to be a market leader with brands like Ruggers and Cherokee which it sells in
Megamart. Add to that, Arvind is gaining ground gradually with brands like Arrow Sport,
Izod and USPA in the premium segment and Gant in the super premium segment. Nautica
will be an addition to our sportswear portfolio in the super premium segment. Arvind has a
strong presence in menswear and value retail.

In fact over the last three years with a CAGR of 38 per cent, Arvind is the fastest growing
company in the apparel brands and retail space. The 38 per cent CAGR in apparel brands and
retail space is one of the fastest growth figures in an industry that is growing by 20 per cent.
According to Wazir Advisors, a retail and management consulting firm, of the total Rs
200,000 crore worth apparel retail market in 2011, about 50 per cent is branded, wherein the
share of international brands is growing.

Initially, indigenous brands like Color Plus began well in India. However, it takes a lot of
time in building indigenous brands in the country. Hence, developing a portfolio of
international brands seems to be the obvious choice. Moreover, in mid-premium and
premium segments, international brands will rule in the time to come. If one wants to be
present in this segment, inorganic growth is the only way, asserts Prashant Agarwal, joint
managing director, Wazir Advisors.

While its peers Reliance and Madura have also been engaged in building international
apparel brands portfolio, Arvind, say experts, is much fitter to do the same. It doesnt
matter whether one is in mens, womens or kids wear segment if you have the expertise to
acquire and manage an international apparel brand franchise. And Arvind is adept in it. Since
some years now, the Arvind Brands team has gained expertise in logistics, design, supply
chain, sourcing, product development, front end management and retail store management -
things that are necessary to run a global apparel brands portfolio, adds Agarwal.

Arvind Brands & Retail is a wholly owned subsidiary of the Rs 4000 croresArvind Ltd group
(a company listed at the BSE), which is a global leader in development and production of
textiles. Being a part of India's largest integrated Textile Company, which operates across the
entire value chain from design to fabric, Arvind Brands & Retail has its footprints strongly
held both in the domestic as well as in the international market.

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 ORGANIZATION STRUCTURE

Arvind Group

Arvind Garment Arvind Lifestyle Arvind Fashion ArvindBeauty

Arvind Mills Export Division Brands Limited Limited Products Limited

Arvind LifestyleBrands
Limited

Joint Ventures:
Bridge toLuxury Unlimited
Heritage BrandsDivision Calvin Klein GAP
Division (Value RetailDivision)
Sephora
TommyHilfiger
The Children'sPlace
Aeropostale

Heritage Brands Division Bridge to Luxury Division

Arrow US Polo
Izod Ed Hardy
Gant Flying Machine
Elle

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VISION

Their Vision is Enriching Lifestyles.

They will Enable People to experience a Better Quality of Life by providing Enriching and Inspiring
Lifestyle Solutions.

MISSION

They are driven by Collective Excitement and Resolve to be the Market Leader in Chosen Market
Segments by 2020.

VALUES

Service : Putting the Needs of our Customers & Consumers First

Speed : Act quickly and decisively to get things done efficiently

Stretch : Reach for things that are difficult to attain with strong Will Doattitude

Innovation : Driven by Out of the Box Thinking and New Ways of Working

Living the Brand : Being a proud ambassador by personifying the brand values and
principles
Care : Respect and Dignity for the Individual and Well Being of Employees above anything
else
Collaborate: Collaborate to learn from each other & leverage on each other strength &
learning Enriching Lifestyles.
We will Enable People to experience a Better Quality of Life by providing Enriching and
Inspiring Lifestyle Solutions.

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 DIRECTORS OF THE COMPANY:

Below table gives information about the directors of thecompany

Mr Sanjay S Lalbhai, Chairman & MD

Mr. Sanjay S Lalbhai, 58years, is the Chairman and Managing Director of the company. He is a
science graduate with a Masters degree in business management and has been associated with
ARVND for more than 33 years.

Mr Jayesh Shah, Executive Director &CFO

Mr Jayesh K Shah, 52 years, is the Whole time Director with the designation of Director and
Chief Financial Officer of the company. He is a commerce graduate and a chartered accountant
and has been with the company since July 1, 1993. He has a distinguished academic career and
extensive administrative,financial,regulatory and managerial expertise. He also holds
directorships in many other companies.

Mr Punit Lalbhai, Executive Director

Mr Punit Lalbhai,30years,is an MBA from INSEAD(France) specializing in strategy and general

management,along with post-graduate degree in masters of environmental science from
Yale University, and a bachelors degree in science (conservation biology) from University of
California,US.

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Ms Renuka Ramnath, Non-Executive Independent Director
Ms Renuka Ramnath is the Founder and Managing Directorof Multiples Alternate Asset
Management Pvt Ltd which seeks to manage circa USD450m of Indian and international
capital. In her career spanning nearly two-and-a-half decades in the Indian financial sector, Ms
Ramnath has been involved with building several businesses from scratch in the ICICI Group,
which include investment banking, structured finance and e-commerce in the1990s and private
equity in 2000.

Mr J Suresh, MD&CEO, Arvind Brands & Retail

He is MD & CEO of the Arvind Groups Brands & Retail Companies Arvind Lifestyle Brands
Ltd and Arvind Retail Ltd. He strengthened the Lifestyle Brands portfolio of ARVND and also
aggressively grew Megamart as a leading value retail chain in apparels.Prior to joining
ARVND, Mr Suresh has held several senior positions during his 18-year-old stint in Hindustan
Unilever Ltd and served as a member of the management committee of the foods and beverages
business.

Mr Aamir Akhtar, CEO Denim(Fabrics)

He has 18 years of work experience in the textile industry. His current and previous assignments
were with two of the most respectable and large sized textile companies of AsiaArvind Mills Ltd
and Reliance Industries Ltd

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 BRANDS OF ARVIND LIFESTYLE LTD

FLOOR ALLOCATION FOR DEPARTMENT

7
12TH FLOOR - Warehouse

11TH FLOOR - IZOD and ARROW.

10TH FLOOR Sourcing department who will arrange fabric, trims &
samples from suppliers and follow up for production samples & HR
Department.

8th FLOOR US POLO team ( Design, Product & Retail/Sales

team),ELLE,FLYING MACHINE & ED - HARDY

6thFLOOR Conference hall &canteen

5thFLOOR Megamart now it is known as unlimited.

4thFLOOR IT Department & GAP

2ndFLOOR Pattern & Sampling Department, Fabric stockroom.

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 FUNCTIONS OF THE BUYING AND MERCHANDISING TEAM IN
ARVIND

A retail buyer is responsible for planning and selecting a range of products to sell in retail
outlets. The buyer must consider the following factors when making purchasing decisions:

Customer demand (e.g. price, quality and availability)

Market trends

Store policy

Financial budgets

Buyers source new merchandise and review existing ones to ensure products remain
competitive. By fully understanding customer needs, they are able to maximize profits and
provide a commercially viable range of merchandise at competitive prices. Keeping up to date
with market trends and reacting to changes in demand are key elements of the role. Retail
buyers have a considerable amount of responsibility and autonomy in what is often a pressured
environment.

Throughout the year, tasks typically involve:

Analyzing consumer buying patterns and predicting future trends

Regularly reviewing performance indicators, e.g. sales, sell through

Managing plans for stock levels

Reacting to changes in demand

Reacting to changes in logistics

Meeting suppliers and negotiating terms of contract

Coordinating with other departments within the organization to ensure projects are completed;
Writing reports and forecasting sales levels

Presenting new ranges to senior retail managers

Seeking merchandise feedback from customers

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 Training and mentoring junior staff

Ensuring the products are delivered on time

Helping to interpret reports and predicting future sales

Stock control and Stock replenishments

Budgeting of the stores

Identifying the competition in the market and market gaps

Sales forecasting

Deciding the Markdowns and Reductions

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 SOURCING DEPARTMENT

FIG- Flow chart of sourcing team work progress

FABRIC TRIM GARMENT

LABDIPS, FABRIC DESIGN QUALITY CHECKING,ON

DEVELOPMENT, FABRIC ACCESSORIES TIME SAMPLE
TEST REPORTS, SAMPLE DEVELOPMENT, SUBMISSION,M
&BULK YARDAGES TRIM TEST AINTAINING LATEST
REPORTS, DOCUMENTS
SAMPLE & BULK
TRIMS.

PRINT/EMBROIDERY

STRIKE OFF
DEVELOPMENTS
,COLOR ,DESIGN & SIZE
APPROVAL

Sourcing team is divided into several teams such as garment sourcing, fabric
sourcing, trims sourcing, print and embroidery sourcing, costing.

Fabric sourcing team will be concentrating only about fabric related issues.
Developing desk loom, lab dips, shade lot, fabric test report, sourcing bulk
material & negotiation on price based on MOQ.
Trim sourcing team will work on trim developments, testing reports, sourcing
bulk materials & price of the material.

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 Embroidery & Print developments will be developed by separate sourcing
team, they will submit print quality in different range, embroidery in different
size as per product team instructions.

Garment sourcing team has to work with garment manufacturers; there aim is
to get good quality of garment as per specification given. They use follow up
charts for tracking the status of sample. All styles cannot be given to same
supplier. Manufacturers will be selected based on style of the garment and
where they have specialized machines.

Garment sourcing team has to be careful on technical aspects , they are

completely responsible for the style, so they should be completely clear about
all technical aspects related to garment from fabric to trims.

Garment sourcing team has to be keep on updating the instructions given by

product team to manufacturers.

Garment sourcing team responsible for GPT reports.

They have maintain track sheet from the date of SMS sample requisition till
production given by product team

Along with SMS samples, road show samples will be developed, after the
road show, comments on samples which got selected by distributors will be
given to sourcing team for further proceeding on PP sample.
Once the PP sample submission has done to product team, they will track for
approval status with product team to proceed production.

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 SOURCING DEPARTMENT

The sourcing department of the Arvind lifestyle brand Ltd is responsible for
manufacturing and delivering the selected range of styles for the season at right time, at
right price points and in accordance with the quality standards pre-defined by the
organization. The sourcing department is also responsible for scoring desired profit
margins over manufacturing costs of each style garments so that it can be sold at the
MRPs decided by the buying/category department.

RESPONSIBILITIES OF SOURCINGDEPARTMENT
The responsibilities of sourcing team can be divided into three main parts:

1. Product Related responsibilities and

2. Financial responsibilities
3. Vendor related responsibilities

Product related responsibilities

Sourcing team is the only part of the company which is in direct contact with the
manufacturing units or the vendors. The development of the products as per needs of the
design and buying/category teams.
The product related responsibilities of the sourcing team can be sub divided as:

i. Product development:

For every season, the design team creates an option plan, which needs to be developed to
prepare range. This option plan includes numerous flat sketches of styles which the
design team prepares. The responsibility of the sourcing team is to develop actual
samples from these flat sketches.

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ii. Improvising product inputs:

As part of the new product development, the sourcing team needs to visit various vendors
for discussing the flat sketches. The vendor, then provides various developments in the
market in terms of fabrics, trims and technologies. The sourcing team must try to
incorporate these developments in their products for improvisations.

iii. Searching suitable options/substitutes:

Many a times, the designers perception about new development are not feasible in terms
of bulk production. The sourcing team must, therefore, search for possible substitutes.
This may help in reduction of overall cost, at the same time maintaining the aesthetic of
the product.

iv. Sampling:

The product development process has to be supported by various sampling at different

stages. Sample approvals are necessary to monitor the production process. It also helps in
conveying progress to other departments of the organization.

v. Approvals of lab dips, strike offs and fabric swatches, accessories, trims and
tags

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As the sampling process continues, various constituents of the final products are also
being finalized. Lab dips approvals are necessary for approving solid colours. Strike offs
are the options provided by the vendor for the prints. Various trims, accessories and
embellishments needs to be approved from category/buying teams to avoid downgrades
in the aesthetics of the final product.

vi. Booking orders:

As the sampling process ends and final sample is approved, the sourcing teams must
place orders as per the negotiations happened with the vendor.

vii. Monitoring production process in terms of time and quality

Actual implementation of a design is complicated and time consuming and sourcing team
has to deliver the finished product within the time limit. As the production is initiated, the
sourcing team must start follow up with the vendor. This provides timely updates on the
progress and also proves helpful if any problem arises.

viii. Communicating between vendor and other departments of company:

Many a times, changes in the construction and design aspects are changed, for which
sourcing team acts as a medium of communication between company and vendor.

ix. Following up the production process:

Production process must be completed within the time to be in sync with the T&A
calendar for the season. For the same, the vendor must be questioned time to time.

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x. Following up the dispatch and shipment

Once the production is done and packed, the sourcing team must provide necessary
details for getting the goods to the warehouse.

Financial responsibilities

As it is the sourcing team who actually produces the product to sell for the company, they
must produce it at lowest possible costs to help in acquiring highest amount of profit
margins.
In Arvind lifestyle brands Ltd, following are the financial responsibilities that the
sourcing team must handle:

i. Sampling costs:

The company do not provide and sampling charges. The vendor must bear all the
sampling costs at any level.

ii. Raw material procurements:

The sourcing must be updated with the current market rates of all the materials and
making charges for the garment. The sourcing team must suggest cheaper options in case
the cost of material procurement provided by the vendor is higher. Also, the sourcing
team must be aware if the vendor himself has fabric or accessories production facility so
that the procurement cost and also the overall manufacturing cost per garment can be
brought down.
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iii. Product costing:

A rough product costing must be done while taking handovers from category team. The
sourcing team must be prepared in terms of various cost saving parameters of the style.
For the negotiations with vendor, the garment costing must be estimated by confirming
costs of fabrics, trims, etc. from other related sourcing teams of the company.
While negotiating costs with vendor, the sourcing team must try to achieve lower costs
than estimated, so that higher profits can be derived from each style. Also, the
negotiations must be kept realistic to avoid vendor losses.

iv. Maintaining profit margins:

The negotiations must aim at maintaining profit margins (Range 60 to 70 percent) per
style. Lower the manufacturing costs, higher will be profits derived on full MRP sale.

v. Avoiding product and raw material liabilities :

The sourcing team must monitor the vendor to avoid excess procurement of raw materials
or over production of garment pieces. This excess production creates liability over the
company and binds use of same raw materials over upcoming season. This should be
avoided wherever possible.

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vi. Safeguarding payments

Arvind lifestyle has a list of nominated vendors who supply raw materials for garment
productions. The garment vendor needs to pay them once their order is fulfilled. The
sourcing team must insist the garment vendor for completion of such payments. Also, the
company must safeguard timely payments to the garment vendors once they complete
their order as per the pre decided terms and policies.

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VENDOR RELATED RESPONSIBILITIES :

The sourcing team must search for vendors who can provide better performance in
terms of delivery, quality and costing. These new vendors must be evaluated in
terms of various parameters like :

The new vendors must be registered with the company and all the related policies
must be conveyed.

Negotiations techniques followed by:

A successful negotiation outcome does not generally occur through luck, but by
following a clear process. The process reflects the different levels of knowledge of
the subject of negotiation,various parties and the way they communicate at various
stages in the negotiation.

The following is an outline of steps essential to effective negotiation.

Prepare, prepare and prepare:

Enter a negotiation without proper preparation and youve already lost. Start
with yourself. Make sure you are clear on what you really want out of the
arrangement. Research the other side to better understand their needs as well
as their strengths and weaknesses.

Pay attention to timing:

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 Timing is important in any negotiation. Sure, you must know what to
ask for. But be sensitive when you ask for it. There are times to press
ahead, and times to wait. When you are looking your best is the time to
press for what you want. But beware of pushing too hard and poisoning
any long-term relationship.

Leave behind your ego:

The best negotiators either dont care or donts how they care about who gets
credit for a successful deal. Their talent is in making the other side feel like
the final agreement was all their idea.

Ramp up your listening skills: The best negotiators are often quiet listeners
who patiently let others have the floor while they make their case. They never
interrupt. Encourage the other side to talk first. That helps set up one of
negotiators oldest maxims whoever mentions number first, loses. While thats
not always true, its generally better to sit tight and let the other side go first.
Even if they dont mention numbers, it gives you a chance to ask what they
are thinking.

If you dont ask you dont get: Another tenet of negotiating is Go high, or go
home. As part of your preparation, define your highest justifiable price. As
long as you can argue convincingly, dont be afraid to aim high.

Anticipate Compromise: You should expect to make concessions and plan

what they might be. Of course, the other side is thinking the same, so never
take their first offer. Even if its better than youd hoped for, practice your best
look of disappointment and politely decline. You never know what else you
can get.
Offer and expect commitment:

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 The glue that keeps deals from unravelling is an unshakable commitment to
deliver. You should offer this comfort level to others. Likewise, avoid deals
where the other side does not demonstrate commitment.

Dont absorb their problems:

In most negotiations, you will hear all of the other sides problems and reasons
they cant give you what you want. They want their problems to become yours,
but dont let them. Instead, deal with each as they come up and try to solve
them. If their budget is too low, for example, may be there are other places
that money could come from.

Close with Confirmation:

At the close of any meeting- even if no final deal are struck-recap the points
covered and any areas of agreement. Make sure everyone confirms. Follow up
with appropriate letters or emails. Do not leave behind loose ends.

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 Functioning of the Sourcing Department

Process flow and time required to garment manufacturing:

A seasons sourcing process can be divided into two main parts:

 1. Sampling&
2. Bulk production

Sampling process mainly consists of developing new styles according to the option
plan for a season, which are then presented before the category team for range
presentation. While the bulk production part, as the name suggests, is the process of
bulk production of the selected styles at the range production.
As per the objective of the project it very important to focus on all the steps of garmenting.
All the steps of the process have to be taken down and analysed so that there can be clarity
in understanding and finding the proper solution. The factors that to be noted down are as
follows:-

Time taken for each process

Breaking down each and every process

Complexity of each process
Problems faced by the departments in the process.

Basic and Major requirements

Some fixed rules and measures of the company are:

Lead time for the garment production is 90days

Payment to the vendors will be done after 120 days of garment in-housedate.
Complete Break-Down of the process, starting from the fabric mill presentation to
the final product dispatch to warehouse:

Getting Tech-Pack and Developing Sample for Presentation

Total time given for Sampling- After 50 Days date fixed

50 Days for Presentation

In Presentation; Samples decided for Bulk Production

15 Days taken to decide the Also the costing is done in the

Quantity same time

After 10 Days; Fabric booking and Trim Booking is done

60 Days was the lead time for 50 Days were taken to get the
Fabric whole Trims

After 60 Days production process starts

First made fit sample; its takes10

Now Pre-Production Sample; it
Days
again takes 10 Days.
Inspection

Dispatch
Fabric mill presentation :
Every textile mill who is vendor for the Arvind arrange a presentation of their fabric for
the coming season.

Main objectives of the presentation are:-

To present the new innovated fabric for the coming season

To present their best quality fabric

To get the orders for the fabric from the apparel company for the season

To maintain their sustainability in the competitive market.

To increase their quantity of order from the apparel brands

Major Textile mills who work with Arvind lifestyle Brands are -:
Mahas
cri
Rcr
Eveline
Swift
Dfab
Guptha
Rider
Space
Active e.tc.

In the presentation designers and various sourcing department heads selects the various
no of fabric for the sampling of the coming seasons.

The selected fabric where sent for the sampling to the various garment vendors.

Getting Tech-Pack and Developing Sample for Presentation :

After the selection of fabric through from the presentation, designer give the tech-packs
for the sampling to the sourcing department to develop the sample for the coming
season.

There are various categories of samples made in the process of sampling:-

New Development
This is first development of any sketch sheet. Three pieces are made in similar kind of
fabric .

Proto Sample
A proto sample is typically made in triplicates in actual fabric.

The proto sample is made for the presentation of the company for the coming season.

The total time given for the sampling process is between 50 to 60 days. It is very
important to develop the sample in between this time period. As to follow the time &
action chart it is very important to do the presentation of sample in the fixed date.

Flexibility given to the department

Generally it is very important to present at least 65 percent of total styles given
for the sampling purpose. There styles can be presented after sometime but to be
on safe side the company has to finalize his approx.70 percent of its styles for the
coming season, so that there should not be any delay in launching.
Sample Presentation :
Sample presentation is the presentation of sample made by the designers to the
industry leaders. In the presentation every designer gives the presentation on each and
every sample he/she designed.

The presentation contains:

The story of the sample

Reason of developing such type of sample

Its future possibility of sale

Present fashion trend in relation to the sample and the upcoming fashion trend.
After the presentation various company heads finalize the sample that have to be
undergone for the bulk production.

Samples selected for Bulk Production

Now after the sample is selected for the bulk production, it is the time to decide the
quantity of the production for each style selected, also to calculate the cost of garment.

Category department decides the no of quantity of production for each style. The
quantity of style is decided by understanding and analyzing the following measures
which are as follows:-

Analysing the last year sales data

Response of the customer

Coming fashion trend

Aesthetic appeal of the garment, etc.

COSTING :
Costing is the most important factor in the process. In order to achieve perfect garment
costing, one must know about all the activities including purchase of fabrics, sewing,
packing, transport, overheads, etc and also about their costs, procedures, advantages
and risk factors.

Garments costing:

There are two types of garments, namely woven and knitted garments. Shirt, trouser,
made ups are woven. T-shirts, sweaters, undergarments are knits. Costing is the
deciding factor for fixing of prices and the important thing to follow in all stages like
purchase, production, marketing, sales, etc. Also update knowledge about everything
related to garments, is essential to make perfect costing.

Costing includes all the activities like purchase of fabrics and accessories, processing
and finishing of fabrics, sewing and packing of garments, transport and conveyance,
shipping, over heads, banking charges and commissions, etc.

We must be aware that there are always fluctuations in the costs of raw materials and
accessories, charges of knitting, processing, finishing, sewing and packing, charges of
transport and conveyance. The method of making costing will vary from style to style.
As there are many different styles in garments in Arvind. Hence let us take men's basic
T-shirt style as example which is usually done by our industry mentor.

To find out the costing of a garment, the following things should be calculated?

Fabric consumption.

Gross weight of other components of garment.

Fabric cost per kg.

Fabric cost per garment.

 Other charges (print, embroidery, etc.)

Cost of trims (labels, tags, badges, twill tapes, buttons, bows, etc.)

CMT charges.( cut , make , trim )

Cost of accessories (hangers, inner boards, polybags, cartons, etc.)

Cost of a garment.

Price of a garment

Costing format of Arvind Lifestyle Brands L.t.d :

The garment costing at Arvind Lifestyle Brands Ltd. happens on open cost sheet basis.
The open cost sheet format is forwarded to the garment vendor along with the sample
for bulk production and tech pack. This open cost sheet is format which is used as a
base to note all cost inputs to the garment.

The cost inputs in term of fabric, trims, accessories, embellishments, etc. are
confirmed from related team of sourcing department for current market rates.

The same open cost sheet format is used by the sourcing team to arrive at estimated
cost per garment. The costing happens for medium sized garment. When the same
open cost sheet is received from the vendors side, it is compared with sourcing teams
cost sheet and negotiations begin.

THIS IS A COSTING FORMAT OF - ROUND NECK SHELL FABRIC NECK WITH RAB EDGE
SLEEVE/HEM/NECK WITH CHEST PRINT
Design code XYZ REAMRKS
Style XYZ
 Crew
Styling neck tee DEPEND UPON STYLE
Yarn 34sCH YARN COUNT
Fabric S/J FABRIC CONSTRUCTION
GSM 140 GRAM SQUARE PER METER
Fabric Spl Regular IF ANY SPECIAL FABRIC
Artwork 1 Print PRINT OR EMB
Wash Softner WASH DETAIL
Vendor XYZ FACTORY NAME
Gmt FOB Cost
w/o Tax 286.27 GMT FOB COST WITHOUT TAX
Yarn 255.00 REQUIRED YARN PRICE
Knitting 12.00 KNITTING CHARGE DEPECD ON FABRIC CONSTRUCTION
Fabric Bio 20.00 TO CLEAN FABRIC SURFACE
TO DYE THE FABRIC AS PER COLOR REQUIRMENT DYEING CHARGE
Fabric Dyeing 110.00 CAN DIFFER BASED ON COLOR
AOP 0.00 ALL OVER PRINT
Fabric Washing 0.00 IF ANY WASH REQUIRED
Spl. Process 0.00 STENTERIG/BRUSHING ANY SPECIAL FABRIC FINISH
Compacting 10.00 FABRIC FINISH
Total 407.00 TOTAL FABRIC PRICE WITHOUT PROCEES LOSS AND CPL
Loss % 10% FABRIC PROCESS LOSS
CPL 15.00 CUT PANNEL LAY WASH
Body Fab Cost /
Kg 462.70 FINISHED FABRIC COST PER KG
Body Fab Consp 0.245 BODY FABRIC CONSUPTION FOR 1 GARMENT
Trim Fab1 Cost /
Kg 0.00 IF TRIM FABRIC REQUIRED OTHER THAN SHELL FABRIC
Trim Fab1 Consp 0.000
Trim Fab2 Cost /
Kg 0.00 IF TRIM FABRIC REQUIRED OTHER THAN SHELL FABRIC
Trim Fab2 Consp 0.000
Body Fab Cost 113.36 BODY FABRIC COST BASED ON CONSUPTION
Trim Fab1 Cost 0.00 TRIM FABRIC COST BASED ON CONSUPTION
Trim Fab2 Cost 0.00 TRIM FABRIC COST BASED ON CONSUPTION
Fab Cost / Gmt 113.36 FINAL FABRIC COST FOR 1 GARMENT
Basic CMT 30.00 CUT MAKE TRIM
Construction
Upcharge 5.00 IF ANY SPECIAL CONSTRUCTION
Sewing Thread 3.00 SEWING THREAD
CMT Cost 38.00
Print 40.00 COST DEPEND UPON TECHNIQUE AND SIZE
Embroidery 0.00 COST DEPEND UPON TECHNIQUE AND SIZE
Non-Branded TRIM OTHER THAN BRANDED ( VENDOR CODE LABEL/WASH CARE
Trims 5.00 LABEL ETC)
 Branded Trims 8.00 NOMINATED BRANDED TRIMS
Zipper 0.00 PRICE BASED ON QUALITY
Special Trims 15.00 SPECIAL TAG/PATCH ETC
Packaging BULLET/TISSUE PAPER/HAND TAG/POLY BAG/TRASPARENT
Accessories 6.00 TAG/BARCODE ETC
Carton Cost 2.70 CARTON COST FOR 1 GMT
Gmt Wash / Gmt
Dyeing 8.00 DEPEND ON WHAT WASH
Prime Cost 236.06 WITHOUT REJECTION %
GARMENT MADE REJECTION CAN INCRESE DEPEND UPON
Rejection % 5% WASH/TECHNIQUE PROCEES
Rejection Cost 11.80 REJECTION COST BASED ON PRIME COST AND REJECTION %
Margin % 15% MARGIN TO VENDOR
Margin Cost 35.41 MARCING VALUE
Total Mark Up 47.21 TOATL COST REJECTION + MARGIN
Transport 3.00 COST CAN VARIY BASED ON DESTINATION
Gmt Px. 286.27 FINAL GMT COST WITHOUT TAX
Fabric Booking and Trim Booking :

Now after getting approval of garment quantity it is the time for fabric booking and
trim booking. It is very important to book the fabric and trims for production process.

Total time given for the fabric delivery from the day of booking=
60 days Total time given for the trim delivery from the day of
booking= 50 days
Fabric should be ordered as soon as possible as it is the most time taking component
in the garmenting process, but there are many steps that have to be taken by the
sourcing person to order the bulk fabric for the production.

Some of these steps are:

Getting approval of the no of colour

Lab dip approval from the designer for the selected colour
Order quantity of fabric according to the consumption of fabric for each
garment.
Checking whether the fabric fits in the company
measures.
Now after the presentation the first process that comes in to action is the Lab
Dip Approval process.
After the selection of the style the designer select the no of colours that has to
be made in the selected range.

Now the colours are not directly ordered for bulk dying, first of all ; the small length
of fabric is dipped in the selected colours and then it is send for the approval to
designer and the after getting approval the bulk dying of fabric is started.

The fabric mill send 2 to 4 options of swatches for bulk production under the same
colour and get the approval from the sourcing department and design department.
Complexity in the lab dip approval process are:-

From the similar looking colour with slight difference one colour is selected for
bulk production; and according to that selection all the trims were ordered.
Nowtheproblemcomesinthisisevenafterthefullapprovalprocessinbulkproduction
there can be a possibility of colour difference.

This one of the most difficult situation that comes in front of sourcing team; as all the
trims were ordered according to the lab dip approval. For ex. Zipper (DTM); Buttons
and Threads.
Vendor Allocation :
Now the most important task that has to be performed by the sourcing department of
Arvind is the vendor allocation. For this it is very important to understand the vendor
management.

Vendor Management :

Efficient vendor management involves selecting the right vendors capable of giving the
right quality of merchandise and meeting delivery deadlines. Besides, they should be
able to deliver the right quantities as well, so that the retailer can get the right hit ratio.
The right hit ratio measures the gap between delivery and purchase orders and helps
eliminate backlog in deliveries. In a chain store scenario, a vendor directly delivering to
stores is an important element in attaining good supply chain efficiency. The vendors
directly manage inventories in a few retail organizations. Vendor Managed Inventory
(VMI) is ideal for retail organizations as it totally eliminates inventory-carrying costs.
Here, vendors manage the inventory at every store, monitoring the flow of information
and ensuring just-in-time deliveries. The vendors are able to take back slow-selling and
non-moving merchandise, thus reducing the scope for mark-down losses for the store.
Business houses in India are presently undergoing a major transformation in the
Purchasing and Supply management functions with the objective of achieving effective
and optimum sourcing. Bought-in costs currently represent a significant portion of the
cost base of any manufacturing enterprise and therefore this programme is of major
strategic importance. Several specific objectives need to be laid down as follows:

Developing the Organisation towards an effective and optimum sourcing

capacity.
Developing closer relationships with the suppliers and foster win-win
atmosphere that eliminates inefficiency and waste.
Buildingstronglinkagebetweenuserdepartmentsandmaterialsmanagementfunction
.
Improving materials procurement and management processes.
Developing focused sourcing strategies across all commodities. To achieve
these objectives and to perform the purchasing function efficiently/effectively,
a sound vendor community of vendors should be motivated and capable enough
to supply the best at the required time in a cost-effective manner, thus
becoming a reliable link for the company. It is to arrive at this end result that
Vendor Management assumes great importance. Some of the best practices are
described in the subsequent sections.
Acquisition of a vendor :

This process should be such that only the required and proven vendors get into the
vendor base. Vendor acquisition process could be started from one or more of the
following sources:

Through market intelligence, a vendor is identified to be suitable for a commodity.

Through commodity research.

End users make specific recommendation.

Vendor approaches company for business.

One (or more) vendor on commodity panel is found unsatisfactory. The last three
factors are basically reactive actions whereas acquiring a vendor through market
intelligence and commodity research/expert opinion are proactive ways of identifying
a suitable vendor.

Building and Maintaining the Relationship :

After a vendor gets associated with the company, it becomes essential to foster a
health relationship whereby both develop trust in each other and perceive the
relationship as a mutually lucrative one. Various steps are taken to achieve this
objective which is discussed further herein.

Vendor Assessment :
Performance assessment of a vendor is a pre-requisite to continual relationship. Poor
performance would be penalized and good performance would be rewarded suitably.
For suppliers of goods, rating is done on four parameters viz. price.

Delivery compliances, quality of the product and vendor professionalism, each is

given weightage of 32%, 32%, 26% and 10% respectively.
Production process :
As now the vendor is finalized it is very important that the vendor should start
working on the fit sample and size set before receiving the bulk fabric

FIT SAMPLE
If buyer likes any of the meeting samples, then he provides the size chart. Now that
sample is made according to that measurement and sizes. This is called fit sample. Fit
samples are made of base size as per the measurement specification sheet. And these
samples are then test fitted on the dummies provided by the respective buyer.

SIZE SET
Size sets are a translation of the graded specification sheet into garment. These are sent
in all sizes. A size set approval is important before starting production to ensure that the
construction and the workmanship required for the style for various sizes is correct.

Now after getting the approval of Fit sample; it is the responsibility of the vendor to
ask for some yardage from the bulk producing fabric mill. So that the pre-production
sample can be made from that. This process will save the time of vendor instead of
waiting for the bulk fabric to make pre-production sample.

PRE PRODUCTION SAMPLE

As the name suggests a sample made before production is stated in actual approved
fabric with the correct styling. All approval has to be obtained from the buyer on the
pre-production sample before commencing production.

Now as the pre-production sample was approved and send to the vendor, the vendor
start its production process as per decided.
Inspection :
After the production was completed and the goods are ready to dispatch, the vendor
send the shipment sample to the company for approval and send the mail for the
inspection of the goods to the department ofsourcing.

Now the shipment sample is approved by the category department, the company send
their QA to the vendor for the inspection of the garments. Until and unless the
garments are not approved by the QA, vendor cannot dispatch the garment to
warehouse.

Dispatch :
After the approval of garments by QA of the company, the goods are dispatch to the
warehouse by the vendor.
 BIBLIOGRAPHY

www.arvind.com
https://en.wikipedia.org/wiki/Sourcing
www.fibre2fashion.com
www.quickfeat.com/sourcing_production.htm
www.textiletoday.com.bd Tech updates Fashion & Clothing