Merchandisers’ Role as Intermediaries in Apparel Supply Chains; Multinational Retailers’ owned vs.

Independent Buying Offices
Sunil Sharma, Professor, Faculty of Management Studies, University of Delhi, DELHI-110007 Archana Gandhi, Associate Professot, National Institute of Fashion Technology (NIFT), Hauz Khas, New Delhi-110016. ___________________________________________________________________________

1.The Global Transition of Apparel Manufacturing
Clothing manufacture is labor-intensive and can be found in almost all developing countries, particularly least-developed countries (Kerry McNamara 2008). Since the 1950s, the industry has seen several migrations, all involving Asia and at each stage involving a shift to a country where labor costs were initially lower. In the 1950s and early 1960s, the move was from North America and Western Europe to Japan, as western textile and clothing production was largely displaced by Japanese imports. The second shift was from Japan to Hong Kong, Taiwan and South Korea, which together dominated global clothing exports in the 1970s and early 1980s. By the late 1980s and the 1990s, a third migration set in, away from Hong Kong, Taiwan and South Korea to other lower-cost, developing countries. This included a big shift of production to mainland China, where economic reforms prompted an up-surge in exportoriented industrial growth. A number of South-east Asian countries including India, Indonesia, Thailand, Malaysia and the Philippines, as well as Sri Lanka, also benefited from the migration. In 1990s, other new suppliers emerged in South Asia and Latin America. The impact of these dramatic geographic shifts on importing countries was severe. In 1992, about 49% of all retail apparel sold in the US was made domestically; by 1999 that proportion had fallen to 12%. The reasons for the migrations were various. In Hong Kong, Taiwan and South Korea, the industry was forced to adjust to rising wages, labor shortages, and higher land prices as well as external factors such as stronger currencies and, as always, tariffs and quotas. By the end of eighties, manufacturers in these countries needed to find lower-cost production bases and ways around quota restrictions. In this division of labor, skill-intensive activities, which provided relatively high gross margins such as product design, sample making, quality control, packing, warehousing, transport, quota transactions and local financing in the apparel industry, stayed in East Asia and labor-intensive activities were
1

relocated. Thus countries in Africa, such as Mauritius and Lesotho, enjoyed a surge in inward investment for garment manufacturing, but usually only took over the lower-margin parts of the supply chain. While lower wage costs were often the initial reason for shifting location, other factor also played a significant part. The goal of shorter lead-times could be achieved by situating production nearer the final markets. Mexico, the Caribbean Basin (Dominican Republic, Guatemala, Honduras, etc) and Central America are particularly attractive because of their proximity to the US. Most of this production has traditionally been basic assembly work—called “outward processing” or “production sharing”—the sewing together of cut pieces and trim provided by US companies. Turkey, North Africa (Tunisia and Morocco) and various former Eastern European countries (Romania, Poland and Hungary) offer quicker access to the EU markets. Each country has it’s own strength and garment producing nations could source several items from other countries to meet the buyers price, quality and lead time requirements.

2. A Typical Apparel Supply Chain
Supply Chain Management is a seen as a critical factor in managing contemporary fashion businesses (Hines 2001).Traditional supply chains view flow of goods/services from upstream raw material suppliers though manufacturing processes and on to the customers. In contrast the modern supply chain concepts begin and end with customer. Modern supply chains are described as flexible, responsive, agile, lean, value adding networks and value streams. Supply chains are more than what the term suggests. They are value creation mechanisms for customers. They are not simply ‘supply’ focussed nor are they necessarily ‘chains’. Supply chains are dynamic, efficient, effective response networks delivering customer requirements flexibly and on time. These high performance networks consist of customers, suppliers and information travelling through organizational ‘arterial systems’. These arterial systems cut across functional, organisations and geographical boundaries. Most product categories can be segmented under two different types of international economic network (Singhal et. al 2004)_ producer-driven supply chains; and _ buyer-driven supply chains. Producer-driven: In producer-driven supply chains, large transnational manufacturers play the central roles in coordinating production networks. Industries characterised by producer-

2

driven supply chains are typically capital.and technology-intensive sectors such as automobiles. large retailers. speed and flexibility are required to satisfy customers who expect increasingly good value and more fashion content.The decentralised nature of buyer-driven supply chains makes them highly competitive. Although the chain spans several stages. toys. In the apparel industry. leading to a more volatile marketplace 3 . and computers. consumer electronics and handicrafts follow this pattern. Airbus Industries. Consumer goods industries such as garments. Thus manufacturing tends to shift to countries with a lower cost base. i. aircraft. There are a number of critical issues apparel companies need to address when it comes to applying the marketing concepts towards fashion: i.Fragmented markets hence difficulty in targeting and segmentation ii. Two management skills are critical in today’s marketplace: managing the product cost and speed to market. the “clout” is entirely in the hands of the “front end” i. the stage of the supply chain which is closest to the consumer.Individualism is breaking down traditional fashion trend prediction influences iv.Buyer-driven supply chains tend to be labour intensive. marketers and manufacturers of branded goods play a pivotal role in setting up decentralised production units in various exporting countries. Buyer-driven: In buyer-driven supply chains.Increasingly more demanding customers make it difficult to spot a sustainable winning formula iii.e. Unlike producer-driven supply chains—which have large manufacturers such as IBM. The characteristics of buyer-driven supply chains are as follows. and Intel controlling the chain—the main leverage in buyer-driven supply chains is exercised by marketers and merchandisers. ii. footwear companies such as Nike and Reebok. The textile and apparel supply chain is a classic example of a buyer driven supply chain. footwear. Most buyer-driven supply chains have low entry barriers. General Motors. iii.Fashion cycles are shorter . and brands such as GAP and Liz Claiborne source their products from labour intensive factories in developing countries.Buyer-driven supply chains are global in nature and in most countries decentralised. Retailers such as Wal-Mart and Sears.

it has dramatically increased supply chain complexity. Now. Under pressure from buyers. and what buyer/retail companies used to do till now. and business objectives.the three key entities of the apparel supply chain are: The Apparel Importer/Buyer-The apparel export industry is a buyer driven industry.operating their own US production plants along with their core design and marketing activities. and manufacturers are no longer in the same organization. insulation from China and Thailand. Levi Strauss & Company have shuttered the production plants in US and outsourced much of their production including design. The Apparel Manufacturer/Exporter-Also referred to as vendor/seller/exporter. it is the most important link in the supply chain. like a winter parka. developing and bringing new products to market is becoming increasingly complex. For example. Sustained revenue growth in any industry requires a steady stream of innovative products. While such outsourcing has had many positive effects on product cost structure and asset management. hence comprehending the expectations of the buyers is of utmost importance. The apparel supply chain is indeed complex (Figure 1). With the driving forces of outsourcing and globalization. and 4 . marketers. requiring deep markdowns to liquidate the inventory before the next season of products arrives. The buyer could be a retailer. where product lifecycles have shrunk dramatically. brands like Levi’s used ‘do it all’ . apparel supply chains have been rapidly disintegrating. they are spread over several continents in organizations with different cultures. More likely. the resulting increased supply chain complexity has strained every player in the industry. the garment manufacturers are doing it today. Coupled with shrinking product lifecycles. This is particularly true for short-life products. Most apparel makers’ supply chains now span the globe with many hands touching the garment before it reaches the consumer. zippers from Japan. Product designers. products fail to meet customer expectations or arrive too late for the intended season. a brand owner or a wholesaler based in the country of selling. The merchandiser here is a kind of pointer which balances tasks between buyer/buying house on one side and the factory on the other. like apparel or computers. the international garment industry is now moving towards as a service industry. often sports components from all over the world: snaps from Germany. languages. However.Apart from the final customer . Even simple garments like T-shirts undergo many hands in several countries before ending up in the target markets of Europe or the US. The Buying House-Being a mediator between the buyer and the seller. A more complex product. the buying house plays a vital role in offering the kind of service levels which their principal(s) expect and ensuring that they upgrade the vendors. driving the need for more and more innovative products. When this happens.

a change made by one member of the design team would be unseen by others creating confusion and finger pointing . Getting the right information to the right people at the right time is the biggest challenge. For example. trim and other inputs are made in India. Figure 1-The Structure of Apparel Supply Chain (SourceAction Research on Garment Industry Supply ChainsWomen Working Worldwide. even the assembly of the same or related items can take place in several countries. www. All too often. fabric is sourced from China. Equally important is visibility to the entire product and sourcing team with a documented history of product changes. and assembly takes place in Mauritius.cleanclothes. In some cases.org/ftp/03-www-action_Research. It is also not unusual to find a matching skirt and blouse where the blouse was made in one country and the skirt in another. design may take place in London or New York.the outer shell from Taiwan. large buyers often contract producers in different countries to make identical shirts. Obviously such globally dispersed production 5 .pdf) In another situation.

Managing relationships is an important competence too.Women Working Worldwide . While. based in UK. following were the problems highlighted in apparel sourcing: (i) Non-tailored customer offering (ii) Poor new product development processes (iii) Ineffective global and local sourcing (iv) Out of stocks and sub optimal inventory levels The study suggested that merchandising and supply chain operations can become a strategic lever for growth and differentiation. Schmitz (2005) researched on value chain analysis for policy makers and practitioners . Paper Presented by co-author at ICAHT Sept 2008) In a study done by IBM Institute of Business Values. The various activities undertaken in an apparel production and distribution company are as indicated in Table 1. goods could reach the final consumer on time. in the ratio required. The primary goal is therefore to drive a new product or marketing concept around the globe as quickly as possible. being first to market is important.requires very careful planning and coordination. Hence the core capability lies in competence in managing global supply chains. by ensuring well coordinated activities between buyer and supplier. carried out an action research on garment industry supply chains (2003). Three critical lead times identified in the supply chain are: 6 . the real returns go to companies that are able to exploit their products by being first to spread the product round the globe (Hines 2001). PRE -PRODUCTION  Product Sampling   Costing & Negotiation Fits & Pre-Production Approvals    Color / Fabric approval Fit approval Plan Factory Capacity & Allocations Development &          PRODUCTION Production & Line Planning Fabric & Trim Sourcing Maintaining Records Fabric Booking Trim Confirmations Testing Product Safety Production Follow up Quality Audits   POST -PRODUCTION   Shipment Status Vessel Planning Documentation Payment Follow up / Flight Table 1.Jobs of a Merchandiser in an apparel manufacturing company (Source: Quality Improvement for Merchandisers. the critical success factors being ‘access to channels of distribution’ and to have developed ‘an internal capacity to propagate new product innovation’.

The risk that is incurred through lengthened lead-times can be quite considerable. intermediaries have been blamed for decreasing transparency and adding an additional step in the complex supply chain and hence increasing costs. but will include quality. 2000). Intermediaries in Apparel Supply Chain Intermediaries are not a new phenomenon. the time it takes to respond to demand volatility by turning on or off the production. Typical international trade intermediaries (ITIs) are buying offices/sourcing offices/agents/liaison offices serving large retailers or brand-name merchandisers in developed countries through sourcing of products in developing countries. cotton textile mills of Lancashire used a dense network of merchants. In many instances since then. Time to serve i. Paradoxically in the fashion industry. fall. Time to react i. producers and retailers have done away with the traditional spring. ‘speed-to-market’ and the ability of the supplier to extend its capabilities beyond the actual making of the garments (the so called ‘full-package’ service).e. reliability. trading service operators take on more sophisticated organizational forms to include international buying offices owned by multinational manufacturing and retailing groups. 3.e. In an effort to boost sales. and winter seasons with six or eight distinct selling periods. The apparel intermediary is a domestic apparel service firm that links domestic wholesalers/retailers and foreign distributors/manufacturers to facilitate import transactions in the global apparel supply chain. Meeting a buyer’s priorities is crucial for any developing country garment manufacturer seeking new business (Kerry McNamara 2008). lead-times have if anything but lengthened over the last two decades or so. price. These requirements will depend on the specific product in question. With globalization of industries and fragmentation of production worldwide. Time to market i.i. 7 . brokers and distributors to ensure their reach to the markets of the world (Popp. In nineteenth century. summer. as well as independent buying agents who perform sourcing and logistics management functions for their customers. the time taken to capture a customer order and deliver goods to the satisfaction of customers iii.e. This is primarily the result of global sourcing as retailers have sought out low cost sources of supply. the time taken by a company to translate a market opportunity into a product or service ii. The demands of the modern retailer imply that any garment production line increasingly needs to be well-integrated into the value chain as a whole.

The companies must manage the competing claims of a multiplicity of customers and suppliers. Different trade intermediaries may take on different roles and business scopes along the supply chain. This includes. To be customer focused. Further. Intermediaries in the apparel supply chain include international buying offices fully owned by multinational corporations. Others work with large and sophisticated independent sourcing agents to handle this intricate task (Abernathy. procurement of raw materials and other forms of technical and financial support to manufacturers / suppliers. Due to factors including language and custom barriers. Their performance is determined by the customer value it can create by enabling win-win transactions between various parties in the supply chain. Their role and tasks.The contemporary apparel business would thus encompass a wide range of market intermediaries involved in indirect export of products between suppliers and buyers located in separate countries. adjusted to those of their upstream and downstream members. are constantly adjusted according to the supply chain environments as well as the functions performed by their upstream and downstream supply chain members. cultural and communications barriers. retailers have had to change the way they approach the world market. the trade intermediaries have to perform a wide range of operational and managerial functions to finally add value to end customers. cycle time compression and mass customization. and to allocate and balance scarce 8 . U. however. they have to strategically evaluate internal structure and operations to decide how to keep their organizations lean. as well as independent importers or exporters serving retailers and manufacturers in different countries. Making sourcing decisions in the global apparel market is no less than a daunting task. for example. In a global business environment of apparel industry characterized by product proliferation.S. Any individual intermediary has to enhance its value-adding services to customers in order to sustain its competitive position in the industry. The intermediaries are expected to effectively manage its operational tasks and strategic relationships with upstream suppliers and downstream customers simultaneously. intermediaries play a significant role in effecting a competitive global supply chain that meets end customers’ needs. and the sheer number of producers scattered across the world. 2005). Some large retailers have established their own buying offices overseas to administer the outsourcing of their private label products. buying agents with contractual or alliance relationships with principals overseas.

Sourcing agents can identify factories that are willing to produce smaller volumes. International apparel buyers base their sourcing decisions on the capabilities of their suppliers to offer ‘full package services’.When apparel retailers use factories that are off. they rely on sourcing agents to solve geographic and cultural barriers. Sourcing agents are critical to the success of complex designs in off -shore production facilities. On time delivery and communication with factories is more effective when a sourcing agent is utilized. and can ensure quality for an apparel firm that might not have the funding to research production options and/or visit the factory often enough to monitor quality when production is off -shore. finding a factory with the appropriate equipment becomes more difficult because fewer factories have the ability to produce complex designs. 3. The sourcing agent’s technical knowledge and network of contacts allow them to identify the best factories for specific designs and production volume requests of the manufacturers and retailers.shore. through their ability to 9 . can better ensure efficiency in production. sourcing agents provide a competitive advantage because they negotiate contracts and identify the factory with the best cost and appropriate equipment capabilities (Cook. Sourcing agents. Capabilities of intermediaries in providing such value-adding services determine their being preferred by customers and hence their competitive position in the industry.resources and investment in different supplier-customer portfolios in order to achieve maximum effectiveness and profitability. The intermediary agents then become the ‘eyes and ears’ of the retailers by communicating with the factories directly and monitoring the quality and timing of apparel orders placed by the retailers. They help to solve problems within the global apparel supply chain.1 The Competitive Advantage of Using a Sourcing Agent in Apparel Industry Beyond bridging barriers and responding to consumer and retailer demands. 2004). Buyers today demand a flexible mix of value-adding services which either the intermediaries can directly offer themselves or indirectly through their alliances with further upstream suppliers. through their close relationships with factories. Cook’s research has shown that the added cost of royalty fees for sourcing agents was indicated to be less expensive than identifying factories and working directly with those factories independently. Sourcing agents also solve the problem of limited resources for smaller apparel firms. If the apparel design is complex.

There are many examples of retailers sourcing offices now in India e. the first which are fully owned subsidiaries of the retailers abroad or liaison office of the international retailer and the second are independent buying offices. and controls that production takes place under good working conditions. The responsibility of training and development of the human resource in the sourcing office rests with the retailer. The Children’s Place and Nike. that the goods are produced at the right price and are of good quality. including checking for shrinkage. The production offices ensure that the buyer places his order with the right supplier. Needless to say that these sourcing offices are associated only with only one retailer. Even now some of the key positions like head of quality assurance is from their office in Sweden. colourfastness and dry rubbing. 10 in Asia and 1 in Africa. H&M. JC Penney. meeting quality and timing standards. ZARA. H&M -It has 21 production offices: 10 in Europe. Turkey) that manufacture H&M’s products. Ensuring the safety and quality of the goods largely takes place at the production offices and is the result of extensive testing. This office works in sync with the retailer’s policies and is also guided by the overall management philosophy of the retailer.communicate and network with local factories and their awareness of factory capabilities for the regions they represent around the world. 10 . They organize the various partners within the supply chain that would otherwise be difficult to connect due to geographic and cultural barriers. In many cases the top positions in the sourcing office could be headed by some one from the parent company abroad especially when the office is newly setup or when the work is expanding time and again. For example H&M’s office in India was headed for a long time by a Swede from H&M’s parent office in Sweden. GAP Inc.1.As mentioned earlier. there are primarily two models of buying agents. twisting.g. The liaison office is an extended sourcing arm of the retailer’s parent office. Carrefour. Lets discuss a few caselets. 3. The divisions and teams are similar to what the retailer has in their head office. The sourcing agent’s role in the global apparel supply chain is to facilitate the relationships among key players who seek to produce apparel goods efficiently. China. They are responsible for contacts with the approximately 750 suppliers (primarily in Bangladesh. by far the majority of whom are drawn from the local population. Sourcing agents play a critical role in supporting the global apparel supply chain. The sourcing office is normally structured on lines of the principal office. Around 700 people work at the production offices.A.

India being a large apparel sourcing base. located in five main areas namely. the UK. Third-party manufacturers ship merchandise to GAP distribution centers (DCs) which sort and redistribute it to the stores. to further leverage sourcing capabilities. Europe/Mediterranean. Located around the globe. Some retailers ensure that the buying agency they work for does not work with their closest or most fierce competitor. In terms of organisation structure. draw up production schedules and place orders with approved third-party factories in the more than 50 countries that produce goods. India alongwith local sourcing offices in other apparel manufacturing centres of the country. 11 . East Asia and the Americas. resulting in a more efficient process and. an independent company helps international apparel retailer(s) source . Netherlands and Japan. Gap has a list of countries approved for product sourcing. Africa/MiddleEast. each retailer/buyer has a dedicated team of people who service the needs of the retailer from the word ‘go’. faster speed to market. Design and merchandising teams are working more closely right from the beginning of the product development cycle. Working with many retailers at the same time. distribution centers are the backbone of GAP’s worldwide operations. The Delhi office not only manages India sourcing but also sourcing of apparel from Middle East and a few other South East Asian countries. The agency could be privately owned or be a partnership firm.3. Southeast Asia. depending on the size of the buying agency.The buying agency is based in country where apparel is manufactured.2. Working with different buyers also introduces the buying agencies to various best practices of international retailers which are then adopted by the company to enhance its service to all its customers. product development offices in New York City and distribution operations and offices coordinating sourcing activities around the globe. Here. it is used a hub from where sourcing from other countries in the region (spokes) could also be managed. Strategically placed throughout the United States and in Canada.B. The other model which exists is independent buying agency model. including sharing more planning and forecasting information. over time. GAP would be building more strategic relationships with vendors. employees in GAP’s sourcing and logistics group. The buying agency has the freedom to work with multiple retailers at the same time. GAP has a sourcing office in Delhi. experience of working with various kinds of retailers and hence overall a better understanding and more exposure of buyer as well as supplier side of business. along with buying agents. gives buying agency a huge advantage in terms of supplier network. GAP –It has world headquarters in the San Francisco Bay Area.

Li & Fung is an international company for high-volume. Li & Fung has successfully transformed itself from a regional sourcing agent to a worldwide supply chain management enabler. Li& Fung. Li & Fung is based in Hong Kong but has an office in India as well.C. The zipper in each product is made in a factory in China owned by a Japanese firm. Francis Wacziarg etc. While Triburg is based in India but till a few years ago also had offices in Sri Lanka and Dubai.2. Li & Fung LtdFounded in Guangzhou. Since China’s textile quota has already been used up under some 12 . the yarn which is made in South Korea is dyed and woven in Taiwan. To extend their realm of sourcing. gifts. Chennai and even USA. the buying agencies have their own offices in other countries. time-sensitive consumer goods that include garments and fashion accessories. Using its expertise. Services offered: -Fashion forecasting -Design influencing service -Vendor identification -Pre production management -Production planning -Bulk production -Quality assurance -Shipping and logistics Table 2 Formats of Apparel Intermediary organisations 3. handcrafts. The supply chain coordination tasks of Li & Fung can be illustrated as follows: Li & Fung receives orders from individual European clothing retailers who need a few thousand garments within six months. Impulse. China in 1906 and with headquarters in Hong Kong. Within India Triburg has offices in Delhi. Retailer’s Liaison Office Owned/Controlled by Retailer Works only for one apparel buyer Training and development of staff Independent Buying Agency Owned independently by individual(s) Works for various apparel buyers Training and development of staff taken care taken care of by principal company. of by buying agency. It now coordinates supply chains for their customers through a network of 65 buying offices in 38 countries across the globe. toys. Throughout the years.There are many buying agencies in India like Triburg. Bangalore. For example. etc. ( Fung & Chen).

resources and capabilities have to be distinctive and costly and time-consuming if replicated by competitors 13 . internal matching of staff and training. The capabilities serve to perform complex coordinated tasks that meet customers’ changing needs. specified place with conformance to specified quality and specified quantity. Rather than taking complete control over about 7500 suppliers in more than 26 countries. several factories in Thailand share this order. What Li & Fung does is to assure the quality of the whole garment and manage the whole process starting from supplier selection. logistics and financing. an Operations Support Group (OSG) is backed by an IT system that keeps a database of 6000 factories around the world.country’s import rules. Six months later.70% of the production of each factory to make certain that it gets substantial leverage and induces suppliers’ dependence on them. manufacturing selection and assessment. sometimes through investment with venture capital is an essential feature of customer relationship management (CRM) of the company. supplier-focused. The company provides regular feedback to suppliers to improve their performance. As no single factory can handle all work-in-progress for this single order. In short. Further. Stabilizing and broadening customer base. Manufacturers simply must have an optimal value-adding supply chain. from production to shipping. sourcing. all work-in-progress is shipped to Thailand for final assembly. must provide customer value based on its supply chain management capabilities. that European retailer would receive the whole order at the specified time. As a back-office hub of Li & Fung. Suppliers of the company have a wide geographical spread. it is also a hub where customers can easily check the progress of their orders. It contains not just the profiles of each factory in terms of products and capacity. The supply chain management tasks and capabilities described earlier can be customer-focused. Intermediary (like Li & Fung). offering recruitment services. logistics and documentation arrangement etc. The company. the value chain integration between Li & Fung with its customers is flexible yet effective. it takes up between 30% . Li & Fung leaves the management challenge to its contractors in order to gain flexibility in coordination and quality control. Aside from IT. in general. utilizing company-based and supplier-based resources for the results. the group also acts as an in-house human resource provider. All divisions of Li & Fung could take loans from the OSG as all divisional revenues finally go to the OSG . can provide tailor-made service to customers in sourcing. and business process-focused. It rewards performing suppliers with more substantial and steady business. In order to qualify as sources of sustainable competitive advantages.

Merchandiser. Apparel Retailer   Buyer Designer Merchandiser Quality Assurance Apparel Buying /Liaison office  Designer Apparel Manufacturer  Designer   Merchandiser  Merchandiser   Quality Assurance  Production Quality Assurance  Figure 2. ITIs must protect these capabilities and stay ahead by endlessly improving their performance. While merchandisers are individuals who work and belong to an organisation. buying house and apparel exporter. (Gowrek.While 14 . 2004). their role however is not very different from that of theoretical ‘trade intermediary’.or new entrants. each one of them has merchandisers. A merchandiser in each organization then ensures that the succeeding /preceding supply chain entity is linked with all other functions/departments in their organization through them. Merchandisers of each organisation co ordinate with each other to achieve the objective of reaching the right product at the right place at the right time at the right price. apparel buyers. apparel buying agencies and apparel manufacturers have merchandisers to co ordinate various internal and external functions of the organisation.linking entities of apparel supply chain The merchandiser in each organisation mirrors the expectations of the buying organisation to the supplying organisation and implements and controls functions to ‘make it happen’.e. 4. Merchandising is defined as activities undertaken to ensure that the right product reaches at the right price in right quantity and at the right time to the final destination. For this reason. It is also worth to mention here that the three types of organisation involved in buying/supplying/sourcing garments i. Merchandisers as Intermediaries To co ordinate various activities of the buyer.

Merchandising must provide rigorous controls of the product development process. The purchasing and scheduling of these raw materials must be programmed for delivery as close to their required usage 15 .1 Responsibilities of the Merchandiser The following are the key responsibilities of merchandisers in apparel firmsa. d. sales and marketing. Materials Management-Raw materials including fabrics. advance sales advice and sales forecasting models. In many companies merchandiser is directly responsible for production authorization with the help of tools like-past sales histories. In other larger organisation the responsibilities could be right from the inception of the product till the product reaches the customer. trims etc can represent from one third to one half the total cost of a garment. the role of the merchandiser could that be of a receiver of information who ensures right information reaches the right person at the right time. e. it must also be understood that this link can have varied and vast functions to perform depending on the type of organisation. Product Development-Many apparel and retail companies offer new styles every month. Planning and Control-These actions encompass all departments of an apparel company and a schedule is made for all activities by a merchandiser. c. This cannot be done without a thorough understanding of manufacturing process and a command over computational and measurement skills. b. f. Production Authorization-Many apparel companies commit to production before meaningful sales have been generated. Market Knowledge-A merchandiser must have an intimate and comprehensive knowledge of his or her company’s target market (Roseneau & Wilson. Interfacing with Manufacturing-Since in many companies the merchandiser authorizes production. style selection and line presentation require a close working relationship among merchandising.2006). it is important for the merchandiser to maintain close links with manufacturing. current market research. For example in small manufacturing organizations. Throughout the product development process. h. g. Interfacing with Sales and Marketing-Line planning. Costing-Developing accurate cost estimates for new products is a critical merchandising function.the role of a merchandisers is often described as the ‘link’. The number of increased offerings creates an almost continuous styling mode in most design departments. 4. merchandising should be obtaining valuable inputs from sales and marketing as to how current styles are selling at retail and trend projections for retail buyers.

as possible. costing criteria and also be a meticulous planner. Ensuring effective communication with own staff as well as that of vendors and suppliers all over the world. it may be an independent. Whichever the case. global apparel industry. ordering. a merchandiser must possess a rare blend of traits. A successful merchandiser is expected to be : o An independent thinker with the ability to maintain a steady course toward long term company objectives while under pressure from various departments o An entrepreneur by being assertive in leading the company in new directions while taking risks based on an innate feel for market. quality assurance. o Flexible with the ability to adjust to the changing demands and timetables of the marketplace o A leader demonstrating the ability to gain respect and cooperation of other members of the management team while making critical decisions needed to keep the company ahead of the competition. styling and design functions. o Have an understanding of production methods. In many organizations. skills and experience (Roseneau & Wilson. o A communicator with the ability to express new ideas and concepts clearly and persuasively. and follow up of delivery and utilization of material enables merchandisers to gain valuable knowledge of the operations of merchandising department. merchandisers select all raw materials. Sourcing-Depending upon the size and departmentalized structure of the organization. the merchandiser must understand the complexities of domestic and international sourcing. 16 . competitive. or it may be a shared responsibility. exhibiting the ability to maintain a disciplined business atmosphere while managing many functions simultaneously and meeting critical deadlines. sourcing may be the sole responsibility of merchandising. senior level management function. In today’s high tech. i. The planning. o Organized. 2006).

the following were established as the reasons of success of apparel intermediaries: a. Immersion knowledge management.Knowledge of the marketplace is unique to the hyperdynamic apparel market environment.Figure 3-Capabilities required in Apparel Intermediaries (Source-Adapted from Patrick Fung and Chen Ivy. A Critique of Success of Apparel Intermediaries In an research carried out by Dyer and Brookshire on apparel import intermediaries (Dyer and Brookshire. either on retailers’ store floors or 17 . the knowledge needed is acquired through years of personal experience and immersion on the floor. 2006). Moreover. ‘Value-adding service capabilities.A study of supply chain management of international trade intermediaries’) 5.

That is why they must have capability to manage a B2B relationship with their domestic clients/people within their organisation and a B2B relationship with foreign suppliers. Flexibility saturation.e. dual relationship management and flexibility saturation are first practiced and implemented by the merchandisers and then slowly permeate into each of the organisation’s overall philosophy.The flexibility was expressed as free movement from country to country to meet demands –or what might be called ‘market choices without boundaries’.Intermediaries have two equally critical business channel members. retailers and manufacturers. And hence. This flexibility may well be associated with the apparel industry having become one of the most globally dispersed industries. 18 . your firm personnel ‘can make you or break you. exercising a multiple personality approach of being both buyer and seller at the same time while managing two vastly unequal power positions.ordination of merchandisers in the key three types of intermediary organizations in apparel industry. Secondly as versatility. i. This led to the understanding that success of apparel intermediaries appeared is tied to personnel management. they have faced a distinctive challenge to establish and maintain two equally important types of business-to-business (B2B) relationships simultaneously.’ b. i. Literally. In fact . c. rather than reactive.e. both of whom have the power to impact their very existence. adapting to environmental uncertainty. The intermediary’s flexibility is described as proactive. Simultaneous dual relationship management.manufacturers’ production floors. taking full initiative to convert market uncertainties into market opportunities. suggesting that these firms leveraged a wide range of resources to carry out firm actions – to the extent that “if you can imagine it. the three success factors of knowledge management. you can make it happen” None of the above factors would be possible without the integration and co.

pdf. Edited by Tony Hines and Margaret Bruce. pg 151-161. ‘The Global Textile and Garments Industry: The Role of Information and Communication Technologies (ICTs) in Exploiting the Value Chain’.2004 http://krex.pdf 2.Paper presented at International Conference of Apparel and Home Textiles. 2003.’Creating and Preserving Value in the Textile and Apparel Supply Chain: From Fibre to Retail ‘. Celeste Nicole. Apparel merchandising: The line starts here (2nd ed. Hale A. L. www-wds.pdf 12. Volume 5. Gandhi. 2008 10.2006. McNamara Kerry. Hines Tony. Singhal. Suhasini Singh Vishesh .k-state. 8.edu/dspace/bitstream/2097/4159/3/CelesteCook2010. Fashion Marketing: Contemporary Issues. Arvind. M. Dorothy and Hubert Schmitz. Anca Van Assendelft.worldbank. Action Research on Garment Industry Supply Chains Women Working Worldwide. Popp.cleanclothes. . Andrew.Archana. New Delhi.September 2008. May 2006 3. Organized by Okhla Garment and Textile Cluster. 2000. ‘Swamped in information but starved of data: information and intermediaries in clothing supply chain’. A. Gina Paglucia Morrison. J.2001. ‘Charting a new course -The retail merchandising-supply network’. International ISSN 0268-4764 . 7.17-25 9.globalvaluechains. www..References 1.Textile Digest November 2002 4. Hurley J. Oxford. p. The role of sourcing agents in global apparel supply chains: An exploratory study. New York: Fairchild Publications. Mc Cormick. January 2004 11.3. IBM Institute for Business Values. Butterworth Heinemann. Cook.).2004 5. Rosenau. Supply Chain Management: International Journal. D. and Smith J. www. . Helen Goworek .’Product Design Collaboration:Capturing Lost Supply Chain Value in the Apparel Industry’. ‘Manual for value chain research on Homeworkers in the garment industry’. IBM Global Business Services. Sood. Textile Outlook 19 .org . Blackwell Pub. Eric .Fashion Buying . 2001. Professional .org/docs/wiegomanualendnov01.’Merchandisers’ role in quality improvement’.org/ftp/03-www-action_Research. 6. No.Johnson. & Wilson.

13. Gereffi. Patrick and Ivy Chen. Dyer.3-10..gov. 12 No. Schmitz. 14. Action Research on Garment Industry Supply Chains-Women Working Worldwide. 51-67 15.2005.pdf 16. 20 . H. p4-6.ht2. Jung E. ‘ The Global Apparel Value Chain: What Prospects for Upgrading by Developing Countries?’ 2003. Barbara and Ha-Brookshire. Gary and Olga Memedovic. 1. 2008 pp.pdf. p. ‘Apparel import intermediaries’ secrets to success: Redefining success in a hyper-dynamic environment’. 9-10.A study of supply chain management of international trade intermediaries as accessed on http://www.inti. http://www.ILO.org/conference/pdf/118.Geneva.’ Value chain Analysis for Policy Makers and Practitioners’.ar/cadenasdevalor/ApparelUNIDOnew2Feb03. Journal of Fashion Marketing and Management Vol. Value-adding service capabilities. Fung.