Fashion Merchandising

Composed and edited by :Pramod Kumar Assistant Professor NIFT Kolkata

Fashion Merchandising
Fashion Merchandising refers to the planning required to have the right fashion oriented merchandise at the right time in the right quantities and at the right prices for the target group of customers.
In other words also the performance of all the activities to supply the apparels needs 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 ( seller and vendor).

Merchandiser :Merchandiser is a person who get converted inspiration into design , use technology to conceptualize and address the planning , production, promotion and distribution of products in the fashion industry to meet the consumer needs and demand .

Concept of Merchandising
Merchandising is a branch of marketing theory and practice concerned with maximizing product sales by designing, packaging, pricing, and displaying goods in a way that stimulates higher sales volume. The underlying assumption 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 and persuades them that the product will fulfill their needs and wants.

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

Fashion Industry- Levels of Merchandising

Export House Merchandising Buying Agency Merchandising Retail Organization Merchandising

Merchandising - involves 6 rights

Right Merchandise Right Time Right Place

Right Price
Right Quantity Right Promotion

Management Hierarchy in an exports company

President / Chairman Managing Director ( M.D.)

Marketing / Merchandising division

Production Division

Accounts and Shipping Division

Human Resource & Development

The Merchandising Division General Merchandise Manager (GMM) Divisional Merchandise Manager (DMM) Merchandise Managers (MM) Sr. Merchandiser Associates Merchandiser Assistant Merchandiser PD / Sampling Division

Merchandising vocabulary
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 actual production run.

Color Standards:
When doing a custom color, the customer must provide a reference sample to us of the color requested and 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 will affect the color matching. If you use a Pantone Color Swatch, the printed colors on paper will look different than a texturized fabric.

Color matching Light Box:

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

High Street:The High Street, is a metonym for the generic name (and frequently the official name) of the primary business street of towns or cities, especially in the United Kingdom. It is usually a focal point for shops and retailers in city centre, and is most often used in reference to retailing.

Country of Origin :-

Country of origin (often abbreviated to COO), is the country of manufacture, production, or growth where an article or product comes from. When shipping products from one country to another, the products may have to be marked with country of origin, and the country of origin will generally be required to be indicated in the export/import documents and governmental submissions

Factory Outlet:-

An outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores.

Mark down :-

A price markdown is a deliberate reduction in the selling price of retail merchandise. It is used to increase the velocity (rate of sale) of an article, typically for clearance at the end of a season, or to sell off obsolete merchandise at the end of its life.

Mark up:The difference between the whole sale price and the retail price of the merchandise or called mark-on in big retail stores.

Buyer:A person whose responsibilities involve the selection and purchase for resale of a category of merchandise 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 fashion industries. Supplied by the fashion coordinators as often and in as much detail as management requiresusually 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.

Lead Time:A lead time is the period of time between the initiation of any process of production and the completion 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, held available 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 promotion period expires, the retailer can then sell the remaining inventory to consumers at regular prices, 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 group called couture. The high fashion clothing called couture created by fashion designers is famous 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.

FOB Price:Free on board (FOB). This pricing term indicates that the cost of the goods, including all transportation and insurance costs from the manufacturer to the port of departure, as well as the costs of loading the vessel 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 that point. The FOB term requires the seller to clear the goods for export. FOB Price does not include Shipping freight and Insurance charges C & F Price:Term of sale signifying that the price invoiced or quoted by a seller for a shipment does not include 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 named place (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 the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port 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, in CIF 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 written evidence 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.

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 invoice indicates 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 a PO 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 is accepted

Designer:A designer is a person whose work uses a design process. This means that a designer could be anyone who uses drafts, sketches, conceptual models (perhaps created inside virtual worlds like computer 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 , coaching and 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.

Business Ethics
Simply put, ethics involves learning what is right or wrong, and then doing the right thing -- but "the right thing" is not nearly as straightforward as conveyed in a great deal of business ethics literature. Most ethical dilemmas in the workplace are not simply a matter of "Should Bob steal from Jack?" or "Should Jack lie to his boss?" Many ethicists consider emerging ethical beliefs to be "state of the art" legal matters, i.e., what becomes an ethical guideline today is often translated to a law, 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 are sometimes called moral or ethical principles. The concept has come to mean various things to various people, but generally it'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 with stakeholders. Consequently, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong.

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 right activists 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, it needs to be pointed out that Gap isn't the only retailer that is questioned when it comes to ethical taste and human right vulnerability. Wal-Mart, J.C. Penney Company, DaytonHudson, Levi, Calvin Klein to name a few, have also been brought forth to the spotlight when human right issues have been mentioned.

Specimen of Performa Invoice

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 specific style of the garment. This document is usually prepared by the designer and finalized in consultation with the merchandisers, and then forwarded to bulk sampling department or to the production department for the reference and guide for bulk manufacturing.

Garment Spec Sheet:GSS (Spec sheets) are important to monitor all aspects of your product. spec sheets should be simplified- including a front and back sketch, brief description, stitching and print detail such as no of colors to be used and the actual size of the print, sample size and, fabric swatches with fiber content info, lining and trim information, season, delivery date, size range and style number etc There is a lot of 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 or copying of a garment with specifications de-marked by the buyer. Their are different stages of sampling. Sampling helps in proper development of a product and it also acts as a milestone to in the confirmation of an order.

Size Chart
Department: Buyer:
Season/Delivery Date:

Description:

4201/ Georgina Reynolds SS10 Cutwork Detail camisole Tayberry red

Supplier: Factory: Supplier Style Number: TU Style Number:

Dhruv Global Dhruv Global FS 975 118496890

Womenswear Cami Block Ref TU Technologist: Maxine Hodgson Supplier Technologist: Hemendra Sharma Model: 0 Size Bridge: 8-22

Measuring Points Bust Flat Bust @ Fullest Waist Hem Centre Front Length Centre Back Length Apex to Apex - Front Apex to Apex - Back Total Strap Length Front Neck Drop Cup Depth 0 0 0 0 0 0 0

Where To Measure Guide For Illustrations See Sketch Page

A 2.5cm down from underarm, straight across A1 2.5cm down from underarm seam, folded over B 41cm down from snp, straight across C bottom of hem, straight across 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 G distance between apexes BACK, straight across H total strap - front seam to back seam I from apex to apex line to CF seam J Apex to under bust seam 0 0 0 0 0 0 0

Size 08 -5.0 40.0 38.0 55.0 62.0 53.0 24.0 16.0 30.5 3.4 18.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 10 -2.5 42.5 40.5 57.5 63.5 54.5 25.0 17.0 30.5 3.7 19.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 12 0.0 45.0 43.0 60.0 65.0 56.0 26.0 18.0 30.5 4.0 20.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 14 2.5 47.5 45.5 62.5 66.5 57.5 27.0 19.0 30.5 4.3 20.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 16 6.3 51.3 49.3 66.3 69.0 60.0 28.5 20.5 30.5 4.6 21.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 18 8.8 53.8 51.8 68.8 70.5 61.5 29.5 21.5 30.5 4.9 22.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 20 11.3 56.3 54.3 71.3 72.0 63.0 30.5 22.5 30.5 5.2 22.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Size 22 13.8 58.8 56.8 73.8 73.5 64.5 31.5 23.5 30.5 5.5 23.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0

ADDITIONAL MEASUREMENTS
0 Canter Front Edge to Edge 0 Canter Back Edge to Edge 0 0 0 0 0 0 0 0 0 0

0.0 0.0 65.0 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 All measurements are in cm's

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

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)

Sampling AND Order execution process in an exports houses

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.

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)

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

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

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 )

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

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

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)

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, packing material 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

Job Profile of a Merchandiser in an export house Role

Working on the initial sampling (Presentation samples) of the buyer as per their
specification, Instructions and measurements. Pricing (costing) of all these samples, negotiations and confirming and booking orders 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 the inventories ( 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 the buying house and getting approval form the buyers. Communicating with the buyers regarding all the important issues and up-dating them 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 running in the company on either daily or weekly basis. Working on the New sampling (Development )for the next seasons.

Role of A Merchandiser in an export Houses

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. in which 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 their requirements 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 the spec sheet contains the sketch of the garment on the one side and the measurement on the other side. A complete stitching detail, placement and design of embroidery or printing, Artwork of design for print / embroidery , additional accessories, color and type of buttons, threads etc. are mentioned in the tech pack. Wash care label details are mentioned. Type, size, color and shape of the buttons are given. Placement of labels, prints, embroidery are given . Packing instructions are also given in this sheet which includes type, color size of the carton, marks and numbers to be printed on it, poly bags size and details printed on it, clips ,boards, tissue papers, required fold etc., A complete Bank and 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 is ordered by the merchandiser which includes fabric, thread, buttons, zips, labels, etc., The color and quality of the things ordered is approved by the merchandiser. Also the merchandiser should contact printing unit, dyeing unit, embroidery unit to make samples of printing, 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 materials for this, since the accessories should not catch dying color. Also the thread used to stitch these garments 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.

Sample pieces are made and sent to the buyer for approval. The corrected samples are made and sent if the buyer required the same. After the sample is approved by the buyer or even before that, costing sheet is 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 or the 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 by merchandiser along with the trim sheet. Work order consists of order no and description of the order. Trim sheet is a sheet in which the sample piece of fabric and accessories are stuck and distributed to the entire department for them to be aware of trims used for a certain order. Approved sample piece is sent along with this work order to the cutting department first from where it passes to all the departments the raw materials pass through.

The bulk fabric is passed through the cutting dept, stitching dept, washing or dyeing unit, and then the packing department. As per the requirement printing or embroidery is done after stitching or cutting. 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. The carton thickness, size, color etc., are instructed by the merchandiser to the packing department as per 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 by the Merchandiser with all the packing details mentioned in it and given to the packing department.

Role of a merchandiser in a Buying House

Send and Receive Mails Send and Receive Mails

Buyer
(Importer)
Buying house Merchandiser

Exporter
(Vendor)

Buying House

Role of Merchandiser in a Buying House

A buying house merchandiser work as an agent between Buyer and the vendor. he / she is basically work as a representative of the buyer and work on behalf of the buyer and take a complete care and responsibility of his account, which start from the product Development 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 in sampling, production, payments , L/C, Dispatch of shipment etc. some of the main contents 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 , deliveryschedules, 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 product development 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.

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 to visit 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

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

Role of a merchandiser in a retail store ( Company )

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

 Controlling stock levels based on forecasts for the season; Using specialist computer software, for example to handle sales statistics, produce sales projections and present spreadsheets and graphs; Analyzing every aspect of bestsellers (for example, the bestselling price points, colors or styles), 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 they arise; Managing, training and supervising junior staff.

Calendar Planning for An Order

Order management Process plan or Time and Action Plan for a particular order / style.

Time And Action Plan ( Calender Planning)

# S tyle no P O No Division : Quantity: # OO7 Buyer : APCL 04758956 Merchandiser :Old Navy Men's Wear Description : 25000 pcs Ref No:Old Navy TD - V NIFT Shirt with long sleeves 1246897 Ex-Factory Date : 12/01/2011 Ex-Shipment Date : 18/01/2011 Lead Time 120 Days Date of receiving order 12/10/2010

Remarks

SN
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 28

Description
Tech Pack and P.O. Received Patterns for proto samples Fabrics and trims ordered / procure for proto Lab-dips for developments in all colors PROTO Samples for development Buyer's comments on PROTO Samples sent B.O.M sheet Preparation for Fabrics and Trims and ordering with suppliers Fit sample development Sending Invoice and Other documents to buyer For L/C opening Sending Lab-dips for Bulk Approval to Buyer Fit sample comments from Buyer size-set samples sending Lab-dips comments to the supplier Sending size set samples to the buyer for Comments Initial Bulk Lot of fabrics from supplier Initial bulk fabric lot approval from buyer Trims in house and sending for buyers approval Sealer sample development Sending Sealer sample for buyers comments Sending Fabrics and trims for Various testing in Labs Like SGS, ITS etc. Making Pre-Production Samples Sending P/P sample for Approval to the Buyer Pre-Production Meeting and Handing Over the production file to P.manager Cutting Stitching Inline-Inspection / Pilot run / Initial Inspection Online insection Finishig Packing Final Inspection Dispatching

Date of order
N/A 13-Oct-10 13-Oct-10 13-Oct-10 14/10/2010 N/A 15-Oct-10 27-Oct-10 15-Oct-10 27-Oct-10 N/A 05-Nov-10 29-Oct-10 10-Nov-10 30-Nov-10 01-Dec-10 30-Nov-10 01-Dec-10 04-Dec-10 03-Dec-10 03-Dec-10 05-Dec-10 10-Dec-10 12-Dec-10 15-Dec-10 18-Dec-10 23-Dec-10 25-Dec-10 27-Dec-10 11-Jan-11 12/01/2011

Date of Receiving
12-Oct-10 14-Oct 14-Oct 24-Oct 17/10/2010 27/10/2010 30-Nov-10 29-Oct-10 25-Oct-10 29-Oct-10 05-Nov-10 10-Nov-10 N/A 15-Nov-10 30-Nov-10 02-Dec-10 02-Dec-10 04-Dec-10 06-Dec-10 08-Dec-10 05-Dec-10 08-Dec-10 N/A 27-Dec-10 03/01/2011 N/A N/A 08/01/2011 10/01/2011 N/A N/A

Cost
Cost is the cumulative total of resources that are directly used in the process of making various goods and products. factors such as labor, equipment operation, and the general overhead for maintaining the production facility are common components that are included in determining the overall manufacturing costs.

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 volume of production units.

Semi-variable:A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded. Also known as a "semi-fixed cost. For example, a manufacturer's electricity bill may include elements that are fixed (such as lighting that is required regardless of the level of production) and elements that are variable (such as the electricity used by machinery directly involved in manufacturing

Direct cost :A cost that can be directly related to producing specific goods or performing a specific service. 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 as depreciation and administrative expenses are more difficult to assign and are not considered 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 of administering a large company is an indirect cost that must be spread over a number of products or services. Also called overhead.

Elements of cost:1. Material :-(Material is a very important part of business) A. Direct material B. Indirect material 2. Labor:A. Direct labor B. 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

Vendor Management

Vendor Management
Vendor Management is the management and control, by an entity, of those third parties that supply goods and/ or services to that entity. Vendor management is the discipline of establishing service, quality, cost, and satisfaction goals and selecting and managing third party companies to consistently meet these goals.
Establishing Goals Just as employees need clearly established goals, operations need clearly defined performance parameters. When selecting or managing vendors, vendor managers must optimize their opportunity to achieve these goals by using third parties companies. Selecting Vendors The fine art of vendor management is essential to optimizing operational results. Different vendors have different strengths and weaknesses, and it is the vendor managers responsibility to match the right company with the desired performance characteristics. Failure to consider this comprehensively could lead to complete failure. Managing Vendors On a daily basis, vendor managers must monitor performance, provide feedback, 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 this in many posts here. Consistently Meet Goals Operations must perform within statistically acceptable upper and lower control bounds. Everything the vendor manager does should focus on meeting goals, from providing forecasts to defining requirements, from ensuring vendors have adequate staff to ensuring the staff have completed all required training

Managing Vendors and Suppliers

It is just as important to communicate with your suppliers and vendors as it is to communicate with your customers. Establishing the proper communication channels and information flows between you and your suppliers can lead to increased efficiencies, reduced costs and better customer service. This section will cover the simple communication methods (i.e. telephone) and other ideas that will allow your company to build 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 emotional undertaking if you don't know how to approach it from the very start. Here are five straightforward 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 the stakeholders before you begin the vendor selection process.

Step #2: Vendor Search The second part of the vendor selection process is to perform a comprehensive vendor search and create a "short list" of vendors to pursue. Done correctly, this will position your business 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) or Request for Quotation (RFQ). A well written RFP or RFQ is the critical success factor in the entire 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 Selection In the vendor selection process, this is the most crucial step of all. Lack of preparation and not paying attention to detail can lead your vendor selection team to recommend the wrong vendor 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 Strategies The 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

Vendor Compliances ( Suppliers Cost of Conduct)

Vendor compliance" are the rules by which vendors (Exporter) will conduct business with their Buyers (customers). Vendors do not typically have a say in the rules of vendorcompliance; they are set up by the Buyer (customer). As such, vendor compliance rules help companies streamline and standardize their internal procedures for dealing with vendors, but the vendors must make adjustments to their operations to react to their customer'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 Labor No person shall be employed at an age younger than 15 or, in the alternative, younger than the age for completing 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 the basis of gender, race, age, color, national origin, disability, citizenship, veteran status, marital status sexual orientation, religious or cultural beliefs.

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

6. Freedom of Association:Employers shall recognize and respect the right of employees to freedom of association and collective bargaining.

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 the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by the law of the country of manufacture or, where the laws of such country do not limit the hours of 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 off premises.

10. Overtime:-

It is understood that overtime is often required in the manufacturing process. In addition to compensation
for 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 shall this be at a rate less than the regular hourly rate. Factories shall carry out operations in ways that limit overtime 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 of Contractors 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 by reducing, re-using and recycling. Buyer encourages suppliers to reduce excess packaging and to use non-toxic, environmentally friendly materials whenever possible.

Exports Documents
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.

L/C

LETTER OF CREDIT

A letter of credit is a guarantee from a bank that a specific obligation will be honored by the bank if the borrower fails to pay. 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 the bank.

(2) Bill of Exchange:Bill of exchange is an instrument, containing a written, an unconditional order by one 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 a post-dated check and a binding contract .

Export Letter of Credit Cycle

5. Product
is Shipped

1.

1.
2.
Application Applicant Importer/Buyer

Beneficiary Exporter/Seller

4. 6.
Letter of Credit

Buyer & Seller Agree

Documents

8.
Documents

2.

10. 3. Letter of Credit 7. Documents

Exporters Bank/ Advising Bank

9.

Importers Bank/ Issuing Bank

DOCUMENTARY COLLECTIONS

52

Buyer/Importer

Seller/Exporter

Buyers Bank

Sellers Bank

TRANSACTION CYCLE
Buyer/ Importer Applicant - 1
L/C Application

Seller/ Exporter Beneficiary - 4

L/C

53

L/C

Issuing Bank 2

Advising Bank Confirming Bank Negotiating Bank -3

Buyer/ Importer - 8,9b

Merchandise

Seller/ Exporter - 5,11

54

DOCs

DOCs

DOCs Issuing Bank - 7,9a

$ Advising Bank Confirming Bank Negotiating Bank - 6,10

Parties to the Letter of Credit :(1) Applicant (Buyer) (2) Beneficiary ( Seller) (3) Issuing Bank (4) Advising Bank

DOCUMENTS COMMON TO AN EXPORT L/C

Commercial Invoice Packing List Bills of Lading Certificate of Origin Other Certificates: Quality, Inspection Insurance policy or certificate

BENEFITS OF LETTERS OF CREDIT

To the Exporter: To the Importer:

Payment protection Reliance on issuing banks credit rather than buyers Rapid, local source of repayment, if payable at a U.S. bank

Documentary evidence that the ordered goods have been shipped on time Assurance that necessary clearance documents will be provided Payment deferred until goods are shipped and documents presented (use of funds)

Types of Letter of Credit:(1) Revocable (2) Irrevocable (3) Revolving (4) Back to Back

(5) Transferable
(6) Stand by

(1) Revocable LC:

Revocable Letter of Credit means the payment against this L/C CAN BE REVOKED BY THE ISSUING BANK. The buyer may either amend the Letter of Credit or cancel it without the approval of the seller. The payment against this instrument is not for sure and hence this type of Letter of Credit is not commonly used. The Seller has meager chances to get loan against 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 payment against 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 VERY LOW 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/ multiple shipments. This type of Letter of Credit keeps on revolving and is not restricted to a single transaction. This type of L/C can be utilized for subsequent business transactions over a period of time on a continuous basis to the extent of limit sanctioned. The seller/buyer does not have to go to the bank for sanction of fresh limits every time he gets a new order for executing the same.

(4) Back to Back LC:In this type of Letter of Credit, one Irrevocable Letter of Credit facilitates the seller to obtain another Letter of Credit. To obtain the Back to Back Letter of Credit the permission of the Buyer 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 or manufacturers. The seller can utilize this Irrevocable Letter of Credit as a security for his bank, to issue an L/C IN FAVOUR OF HIS SUPPLIERS in order to get a very competitive rate for his purchases and increase his profit margin in the process. Thus this can very well be 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 the issuing/advising/confirming bank to transfer the letter of credit in whole or in part to another party/ies such as supplier/s (second beneficiary/ies). A transferable letter of credit is usually used when the beneficiary is not the manufacturer/original supplier of some/all of the goods/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 and supporting documentation.

Transports Documents
(a) Mate Receipt:- Mate receipt is a receipt issued by the commanding office of the ship when 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 the receipt of a shipment of goods. A transportation company or carrier issues this document to a shipper. In addition to acknowledging the receipt of goods, a bill of lading indicates the 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 refers to a receipt issued by an international airline for goods and an evidence of the contract of carriage. The Air Waybill (AWB) is the most important document issued by a carrier either directly or through its authorized agent. It is a non-negotiable transport document. It covers transport of cargo from airport to airport.

Documents for Customs

(1) Shipping Bill / Bill of Exports:Customs document used where drawback is claimed, such as on goods exported or on dutiable goods transshipped or re-exported from a bonded warehouse. Shipping bill is prepared when ever any exporter is exporting any goods from his country to another country. 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 prepared should be entered in the data base of the Customs Authorities or their authorized representatives office for authentication / approval.
This process must be done in advance, before shipment.