Export Merchandising and EXIM Documentation

END TERM SUBMISSION

EXPORT ORDER DOCUMENTATION

Submitted by:

Hema Shivaranjani (MFM/20/365)

Ritaaksha Kumar (MFM/20/70)

Sri Pragathi (MFM/20/446)

Under the guidance of

Ms. Nethravathi T S

Mr. Pratik Gosh

Submitted in partial fulfilment of the requirement for the degree of

Masters of Fashion Management Studies

NATIONAL INSTITUTE OF FASHION TECHNOLOGY

BENGALURU

(2020-2022)
 TABLE OF CONTENTS

Declaration………………………………………………………………3

Acknowledgement………………………………………………………4

Introduction……………………………………………………………..5

Techpack………………………………………………………………..6

Specification Sheet……………………………………………………..7

Time and Action Plan…………………………………………………..8

Process of TNA………………………………...……………………….9

Operation Breakdown………………………………………………….14

Fabric and Garment Cost Sheet………………………………………..15

Bill of Materials………………………………………………………..17

Vendor Details…………………………………………………………19

EXIM Documentation required for the Order…………………………21

Conclusion……………………………………………………………..26

References……………………………………………………………...27

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 DECLARATION

This is to certify that the Assignment Report entitled “End Term Submission” which is
submitted by Hema Shivaranjani, Ritaaksha Kumar, Sri Pragathi in partial fulfilment of the
requirement for the award of degree Master of Fashion Management in National Institute of
Fashion Technology. The matter presented in this assignment is duly acknowledged and has
not been submitted for the fulfilment of any other degree.

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 ACKNOWLEDGEMENT

It gives us great pleasure to present the Export Merchandising and EXIM Documentation End
Term Assignment that has been undertaken during the NIFT MFM second semester.

We would like to express our gratitude to all those who have helped and guided us for the
completion of this report throughout the working period.

We are especially grateful to our honourable Ms. Nethravathi T S and Mr. Pratik Ghosh for
their suggestions and support which helped us immensely in preparing this report. Without
their advice and support, it would not be possible for us to complete this report.

Last but not the least we express our gratitude to all the individuals who have helped us directly
or indirectly.

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 INTRODUCTION

Processing of an export order starts with the receipt of an export order. An export order suggests
that there should be an agreement in the form of a document, between the exporter and importer
before the exporter actually starts producing or procuring goods for shipment. In this case, for
a given export order of 1200 pieces of knit woven top and shorts set, all the activities and
documents required for the fulfillment of the order have been provided.

DGM Textiles, which is an export house located in Tirupur, Tamil Nadu has been taken into
consideration for the same. First, a garment techpack has been prepared as per the requirements
of the buyer, which consists of all the details regarding the colourways, fabrics and
specifications regarding the garments. On the basis of this techpack, a time and action plan has
been put into place. Subsequent to the fulfilment of the time and action plan, a cost sheet along
with a bill of materials is prepared to determine the final costs incurred. Various vendors have
been considered for the sourcing of fabrics, trims etc and finalised on the basis of timely
delivery, quality and overall efficiency. Lastly, a list of all other EXIM documents required for
the completion of the order have been listed with samples.

DGM Textiles, Tamil Nadu

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 TECH PACK

PRODUCT SPECIFICATIONS & COLOURWAYS

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 SPECIFICATION SHEET

*The Specification Sheet displays the measurements of the garment. It has been created and added on an excel
sheet by the group. The image included is a screenshot of the same.

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 TIME & ACTION PLAN

PO 1000

DESCRIPTION KNIT WOVEN SHORT- FROM SET

COLOUR WONDERLAND PEACHED/CORAL COBRA

QTY IN PIECES 1200

FIT SAMPLE SUBMIT 21 April

FIT SAMPLE APPROVAL 28 April

PP SAMPLE SUBMIT 04 May

PP SAMPLE APPROVAL 09 May

FABRIC INHOUSE 12 May

FABRIC INSPECTION 14 May

FPT 16 May

CUTTING START 28 May

CUTTING END 30 May

PRODUCTION START 4 Jun

PRODUCTION END 8 Jun

GPT 9 Jun

FINAL INSPECTION 10 Jun

SHIPMENT 11 Jun

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 PROCESS OF TNA

SAMPLING PROCESS & SAMPLE APPROVAL

Sampling is one of key elements of the pre-production processes in a garment industry. Before
a manufacturer produces bulk orders, a prior sampling of styles is done to get approvals and
jumpstart the fabrication of garments.

Process involved in sampling for the garment is as follows:

● Study the techpack given by the buyer, any doubt clarified with the buyer.
● Develop the pattern for any one size
○ Prepare the fit and send it to the buyer for approval. The fit can be made ready
with the available fabric and trims
○ Based on the fit comments and feedback, need to develop the size grading
○ Lastly, develop size fit and send it to the buyer for approval
● At the same time fabric yardage approval is needed as well as trims approval and
labdip’s approval should be done
● Once everything is approved with the buyer, move on to pre-production samples.

Simultaneously the fabric selection is also done based on fabric quality required and lab dip
test is also conducted. A lab dip is when a dye house or color lab dyes a few small swatches of
your actual quality fabric or textile trim to find out what formula creates the best color match
for that quality. A Pantone color reference or sometimes a swatch cut from another fabric is
given to the lab to match to. This process usually takes anywhere from a few days to two weeks
depending on how difficult the color is to match, the availability of the dyestuffs, and how busy
the lab is. The swatches are then checked in a lightbox to see how colors look under various
light settings, like daylight vs. fluorescent store lights.

Lab dip is developed at this stage prior to bulk fabric ordering. Prior to bulk sourcing, fabric
samples are tested to check whether the desired quality is matched with the developed fabric
or not. Based on the fabric consumption, total fabric requirement is generated for an order and
the same is sourced from the pre-approved fabric supplier.

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There are various types of samples that are developed by manufacturers depending on the
requirement of their respective buyers.

● Proto Sample
Proto samples are the samples which are made after receiving the order sheets from the
buyer. This is the first sample developed by a designer or as per the artwork in the
product development stage. The design and style of a sample are communicated and
the fit, color and fabric details are not being considered.
● Fit Sample
These samples are prepared by a manufacturer so that the buyer purchasing the product
can review the garments to make sure they fit properly to the human body. Its main
function is to evaluate the fit of the fit sample. These samples should be in the same
type of fabric that is going to be used for production. However, the fabric does not need
to be dyed or printed to match final colors.

Once the fit sample is approved, the factory makes a pre-production sample. This is done using
the original fabric and trims according to the buyer specifications where a sample is created
and sent to the buyer. After the PP approval from buyer bulk fabric is inhoused and followed
by lab tests for GSM, Shrinkage, color fastness, fabric pilling, etc. according to the buyer
requirements. Once inhoused after lab test approval, the size set should be done. Based on the
size set, bulk cutting is released and a pre-production meeting is conducted with all production
team members and quality team members. In pre-production meetings everyone discusses the
style and sits with each other to make sure that everyone is on the same page and keeps up with
the product. Hence, this meeting has the merchandiser, production in-charge, cutting, finishing,
fabric in-charge, line supervisor, pattern master, sample master etc. All tentative problems are
discussed and solutions sought to execute the order smoothly. Once the pre-production meeting
is done the factory does a pilot run. Factory cuts 100 – 200 garments based on the order
quantity. The pilot run is done on the assembly line and is aimed at ensuring that the operators
of the assembly line understand the required quality levels. This is very essential since all
samples prior to the pilot run (fit samples, PP & size set) are made in the sampling unit. Once
Pilot run is approved the factory goes into bulk production.

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 ● Pre-Production Sample
The exporter manufactures pre-production samples with the actual fabric, trims, and
accessories. This is done once all the samples are approved by the buyer. It is also called
a pilot run which is a trial run. This should be developed before starting the bulk
production. After a final approval is received from the pre-production sample the actual
production will proceed.

PRODUCTION PLANNING AND CONTROL

Production planning and control is a predetermined process that plans, manages and controls
the allocation of human resource, raw material, and machinery to achieve maximum efficiency.
The production manager is incharge of all these activities. The main objectives of production
planning and control are:

● Ensure cost-efficient production process

● Promote timely delivery of goods
● Minimize production time
● Improve customer satisfaction
● Coordinate with departments about production, to ensure things are on the same page
● Ensure the right man is assigned the right work

FABRIC & TRIMS IN HOUSE

The fabrics are in-housed in the factory or in a central warehouse of the company. Fabric may
be required to check 100% or can be checked randomly based on fabric quality received. Some
fabric tests like fabric GSM, fabric shrinkage and color bleeding in washing are done by the
factory. Similar to fabric sourcing all required trims and accessories are purchased. Trims and
accessories are sourced in advance to production start. The Trim required for our garment is
Cotton. The cotton fabric requirement is calculated based on the consumption per garment.

SPREADING AND CUTTING

Spreading is the process of unwinding large rolls of fabric onto long, wide tables in preparation
for cutting each piece of a garment. The fabric is first cut into uniform plies and then spread
either manually or using a computer-controlled system in preparation for the cutting process.

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The number of plies in each spread is dependent on the fabric type, spreading method, cutting
equipment, and size of the garment order. Next, patterns are laid out on top of the spread and
the fabric is cut to the shape of the garment forms.

SEWING & FINISHING

Sewing is done after the cut pieces are bundled according to size, colour and quantities
determined. Garments are sewn in an assembly line, with the garment becoming complete as it
progresses down the sewing line. Sewing machine operators receive a bundle of cut fabric and
repeatedly sew the same portion of the garment, passing that completed portion to the next
operator. Here in our product, the first operator may sew the body hem of the garment and
followed by sewing one side of the shoulder stitch and so on. The central process in the
manufacture of clothing is the joining together of components.

Once the product is finished it is sent for checking because it is realistic to assume that however
well checking or quality control procedures are followed within a factory there will always be
a certain percentage of garments which can be rejected for some reason or other.

QUALITY ASSURANCE

Quality department is responsible for the quality assurance of the garment. The steps involved
are as follows:

● Follow lab test approval for fabric

● Bulk fabric checking control
● Spreading quality control - number of plys, when laying is done for cutting it should be
ensured that it is within the specific height else the cutting process might go wrong,
proper laying, when laid for cutting it should be ensured that it is laid properly because
when in case of stripped fabrics. If it is not laid properly the cutting might go wrong.
● Safety Precautions including wearing metal gloves while cutting,mask,etc.
● Cut bundle must be randomly checked
● Cut bundle must be properly controlled (in proper quantity and size)
● Proper stitch adjustment must be done before sewing (eg: slippage, breakage,etc.)
● Measurement must be taken during sewing
● Strictly follow packing assortment handtag, barcoding, proper package according to the
buyer specifications.

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PACKING AND DISPATCH

In the last steps of making a product retail-ready, the garments are folded, tagged, sized, and
packaged according to the buyer specifications. Also, garments may be placed in protective
plastic bags to ensure that the material stays clean and pressed during shipping. Lastly,
garments are placed in cardboard boxes and shipped to client distribution centers to eventually
be sold in retail stores. Garments are packed in plastic bags at the end of production.

The quality parameter will be based on the AQL (Acceptable quality level) standard. The AQL
standard is checked and calculated by the buyer’s inspection agency or buying office QC or the
exporter QC. If everything is done, then the supplier sends the goods to the buyer. In case of
our product they are bagged and boxed directly after final inspection and enter the stores in
prepacked form. Then these boxed products are transported into cartons which are sealed.
Once 80 – 90 % of the goods are packed, a pre-final audit is done. This helps in taking corrective
action if required before the final audit. Generally, since the final audit happens very close to
the shipment date, the pre-final audit gives the factory a chance to amend problems, if any. The
last step is the final audit. This is the last checkpoint before shipment. All aspects (packaging,
measurement, construction & visuals) are checked by the merchandiser as well as the auditing
team.

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 OPERATION BREAKDOWN

*The Operation Breakdown has been created on an excel sheet by the group for the purpose of final calculation
of the cost sheet. The image included is a screenshot of the same.

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 FABRIC & GARMENT COST SHEET

ITEM VENDOR QTY UOM AMOUNT

YARN

100%COTTON -160 gsm Bannari amman spinning 1 kg 360

JERSEY (Coral Cobra) mill

100%COTTON -160 gsm Bannari amman spinning 1 kg 360

JERSEY(Vanilla) mill

KNITTING

100%COTTON -160 gsm Viji Knitting 1 kg 20

JERSEY (Coral Cobra)

100%COTTON -160 gsm Viji Knitting 1 kg 20

JERSEY(Vanilla)

PROCESSING

100%COTTON -160 gsm Mercury Process 1 kg 30

JERSEY (Coral Cobra)

100%COTTON -160 gsm Mercury Process 1 kg 30

JERSEY(Vanilla)

PRINTING

Print on Vanilla Texim Printing 1 kg 100

FABRIC

100%COTTON woven Twill TCM Textiles 1 mtr 140

Fabric (Wonderland Peached)

TRIMS

THREAD Madura Coats 5000 mtr 55

LABEL DGM Textiles 1 piece 1

PRINTED BAG Star Polymers 1 pack 5

UPC STICKER DGM Textiles 1 piece 0.25

FOLDING BOARD R.Ramachandramoorthy 1 piece 0.5

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SIZE STICKER Gayatri Stickers 1 piece 0.1

BAILOR BAG Nithyanandha Polybags 1 piece 1.5

CARTON MARKED DGM Textiles 1 sticker 1

CARTON RK Packages 1 carton 70

TOTAL 1194.35

OTHERS

LABOR CHARGES DGM Textiles (Export 1 Piece 3

House)

TRANSPORTATION 1.5%

OVERHEADS 3%

REJECTIONS 2%

TOTAL 1274.983

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 BILL OF MATERIALS

Name Description Supplier Coral Cobra Vanilla Wonderland

Peached

TOP & BELT

Body Yarn 100% cotton - Bannari Coral Cobra Vanilla

160gsm Jersey Amman
Spinning
Mill

Body, Belt, 100% cotton - Viji Coral Cobra Vanilla

Front Patch, 160gsm Jersey Knitting
Yolke, Trims
Knitting

Body, Belt, 100% cotton - Viji Coral Cobra Vanilla

Front Patch, 160gsm Jersey Knitting
Yolke, Trims
Processing

Printing Texim Print on Print on Print on

Printing Vanilla Vanilla Vanilla

Thread Madhura Coral Cobra

Coats

Heat Transfer DGM Black Black Black

Textiles

BOTTOM

Body Twill 100% cotton TCM Wonderland

Fabric woven twill Textiles Peached

Thread Madura Wonderland

Coats Peached

Heat Transfer Size - 2.086” * DGM Black Black

1.986” Textiles

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PACKING TOP, BOTTOM & BELT

Printed Bag Printed Polybag Star Polymer

UPC Sticker - DGM Textiles

Size Sticker - Gayatri Textiles

Carton Marked - DGM Textiles

Carton - Krishna Packages

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 VENDOR DETAILS

SHIRT AND BELT

YARN

Bannari Amman Spinning Mills Sahana Spinning Mills Best Cotton Mills

KNITTING

Venkateshwara Knitting Viji Knitting Warrior Knitting Mills

PROCESSING

Euro Process Rubi Saram Process Mercury Process

PRINTING

Texim Printing Rotary Printing Leo Printing

SHORTS

FABRIC

TCM Textiles

TRIMS

THREAD

Madura Coats Sivam Traders Shenbagam Traders

PRINTED BAG

Star Polymers

SIZE STICKER

Gayatri Stickers Kirubai Offset -

CARTON

RK Packages Krishna Packages -

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 LABEL, UPC STICKER, CARTON MARKED

DGM Textiles

The suppliers for this order are from Tirupur District. Direct Fabrics are not available for knitted
garments in Tirupur District so it is done by the process of Yarn, Knitting and Processing.

● Bannari Amman Spinning Mills has been chosen for yarn supply because of its quality
and consistency and the timely delivery of the yarn.
● For knitting, Viji Knitting has been chosen because it has various branded machines
available with them and their quality is also good when compared to the other two.
● For Processing, Mercury Process has been chosen for its quality and timely supply and
also, they have machines according to the quantity of the garments.
● Next for printing, we have chosen Texim Printing for their best quality in printing.
● For woven fabric we have chosen TCM textiles because of their good quality in woven
fabrics.
● For trims, Madura Coats have been chosen for supply of thread because of their Quality.
Star Polymers for the Printed bags because of their quality, delivery on time and
advanced technology machineries.
● Size stickers from Gayatri stickers are sourced because they always have available stock
with them.
● For Carton Boxes, Krishna Packages have been chosen because of their quality and
pricing.
● Finally, the Heat Transfer Label, UPC sticker and Carton Marking is done inhouse at
DGM Textiles.

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 EXIM DOCUMENTS REQUIRED FOR THE ORDER

Export documents are used for taxes and quality control inspection certification as well as
providing information about the goods and its destination port. Every cargo is accompanied by
a number of documentations. These forms must be filled out completely and accurately.
Incorrect paperwork may result in items not being delivered to the importer. The right papers
will be received after some time, when we have to pay storage fees in the interim. More
importantly, the importer will be hesitant to buy from the same supplier again. Inorder to avoid
all these risk factors, proper export documentation is required.

Shipping Bill / Bill of Export:

The shipping bill is an important document that the Customs Service Centre issues once the
exporter requests for it. This law makes it easier for an exporter to obtain customs clearance,
load products, and collect duty refunds. After collecting payments from clients, the exporter
should send a copy or original of the shipping bill to the bank.

The figure shows the format of Bill of Export

Image source: https://www.club4ca.com/formats/custom/shipping-bill-for-export-of-duty-free-goods-ex-bond-pdf-format/

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Bill of Lading:
A bill of lading is a legal document that a shipper receives from a carrier that specifies the kind,
amount, and destination of the goods being transported. When the carrier delivers the items to
a designated location, it also functions as a shipping receipt. Regardless of the mode of
transportation, this document must accompany the delivered goods and be signed by an
authorised representative from the carrier, shipper and receiver.

Importance of Bill of Lading:

The significance of a bill of lading stems from the fact that it is a legally binding
document that gives the carrier and shipper all of the information they need to complete
a cargo correctly. This means that it may be used in court if necessary, and that all
parties concerned will go to considerable lengths to assure the document's correctness.
It is, in essence, irrefutable confirmation of shipping. A bill of lading also provides for
the separation of tasks, which is an important element of a company's internal control
system for preventing theft.

The figure shows the format of Bill of Lading

Image Source: https://www.investopedia.com/terms/b/billoflading.asp

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Packing List:
In international trade, a packing list is a document. It offers information about the cargo to the
exporter, international freight forwarder, and final consignee, such as how it's packed, the
dimensions and weight of each package, and the markings and numbers on the outside of the
boxes.

Importance of Packing list:

It provides a count of how much merchandise is being sent. It proves that the inland
Bill of Lading was issued. It specified the data needed for the Certificate of Origin. It
supplies much of the information required by the Automated Export System's
Electronic Export Information section. In the event that items are judged hazardous or
dangerous, it acts as documentation of a Material Safety Data Sheet. It's used to make
a reservation with an international airline and get an international bill of lading. It assists
the Customs broker in putting the specified items into their country's import database
since it provides crucial information. It acts as a reference for the receiver/purchaser
while counting the items they have received.

The figure shows the format of Packing list

Image Source: https://in.pinterest.com/pin/859483910109532002/

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Certificate of Origin:
A certificate of origin is a document that states where a product or commodity was made. The
Certificate of Origin provides information on the goods, its intended destination, and the
exporting country. The Certificate of Origin is an essential form since it may assist in evaluating
whether particular products are allowed for import or whether they are subject to tariffs. It is
required by numerous treaty agreements for cross-border trade.

Importance of Certificate of Origin:

The primary reason for obtaining a Certificate of Origin is to clear customs. If the items
being exported/imported do not have a CO, the Customs officer in charge of inspecting
them will not let them leave the warehouse. The Customs officer uses the Certificate of
Origin to assess the duties that must be paid and to determine if the items being
exported/imported are lawful.

The figure shows the format of Certificate of Origin

Image source: https://templatelab.com/certificate-of-origin/

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Letter of Credit:
A Letter of Credit (LC) is a document that assures the seller that the buyer will pay the seller.
It is given by a bank and assures that the seller is paid on time and in full. If the buyer is unable
to make such a payment, the bank pays the entire or remaining balance on the buyer's behalf.

Importance of Letter of Credit:

Letters of credit are a dependable payment mechanism in international trade because of
variables such as distance, differing regulations in each country, and the lack of physical
interaction during international trade. Letters of credit used in international transactions
are governed by the ‘International Chamber of Commerce Uniform Customs and
Practice for Documentary Credits.'

The figure shows the format of Letter of Credit

Image source: https://www.templateroller.com/template/488542/irrevocable-letter-credit-form-city-overland-park-kansas.html

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 CONCLUSION

In this assignment we learned how export documentation plays a vital role in international
marketing since it allows for a seamless movement of products and money across national
borders. The importance of documenting in any process cannot be overstated; a lack of
paperwork may not only appear to be minor, but may also be judged inconsequential. Without
adequate documentation, it is hard to develop a treatment path. Also widely recognised is how
a manufacturing business creates all of these papers and how they must be presented. Apart
from that, this assignment records the numerous papers necessary for shipment as well as their
relevance for future reference.

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 REFERENCES

● https://www.investopedia.com/terms/b/billoflading.asp

● https://cleartax.in/s/certificate-of-origin

● https://www.freightright.com/kb/packing-list

● https://cleartax.in/s/letters-of-credit

● https://www.grainmart.in/news/shipping-bill-importance-and-uses/

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