Export Merchandising and EXIM Documentation

END TERM ASSIGNMENT

(SESSION: 2020-2022)

(Topic: Step by step process of an apparel export order)

Under the guidance of: Submitted by:

Prof. Toni Sharma Abhishek Kumar
Harsh Yashaswee
Sneha Jain
Suruchi Kumari

DEPARTMENT OF FASHION MANAGEMENT STUDIES

 ACKNOWLEDGEMENT

First and foremost, we would like to express our deep and sincere gratitude to our Professor Toni Sharma,
for giving us the opportunity to do research and providing invaluable guidance throughout this research.
His dynamism, vision, sincerity and motivation have deeply inspired us. He has taught us the methodology
to carry out the research and to present the research works as clearly as possible. It was a great privilege
and honour to work and study under his guidance. We are extremely grateful for what he has offered us.
We would also like to thank him for his empathy, and great sense of humour.

We would like to thank NIFT Patna, for providing us the opportunity to work in such a respected
organization. By this we did lots of research and came to know about so many new things.

This assignment cannot be completed without the effort and cooperation from our family and friends have
made valuable suggestions on this assignment without them it could not possible.

Finally, our thanks go to all the people who have supported us to complete the research work directly or
indirectly.

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 CONTENT
S. No. TOPICS P. No.

1. Introduction 4
2. Understand the Apparel business process 4
3. The Buyer side of Apparel Supply Chain 5
4. The Supplier side of Apparel Supply Chain 6
5. The Manufacturer side of Apparel Supply Chain 7
6. Merchandising Department 8
7. Export Procedure 8
8. Export Documents 10
9. Execution Process 14
12. Conclusion 29
13. Bibliography 30

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 INTRODUCTION

Export in simple words means selling goods abroad or Export refers to outflow of goods and services and
inflow of foreign exchange. Each country has its own rules and regulations regarding the foreign trade. For
the fulfillment of all the rules and regulations of different countries an exporting company has to maintain
and fulfill different documentation requirements.

In order to complete an order for garment, many activities like communication between different
departments, the process of outsourcing raw material, payment process, quality control, packing and
shipment of goods etc. are undertaken.

Understand the Apparel Business Process

The textile and apparel supply chain accounts for a good share in terms of number of companies and people
employed. The apparel industry is divided into four main segments. At the top of the supply chain, there are
fibre (raw material) producers using either natural or synthetic materials. Raw fibre is spun, woven or
knitted into fabric by second segment. The third segment of the supply chain is the apparel manufacturer
which converts fabric into garment with many processes involved. The final segment is the retailers who are
responsible for making apparels available to consumers.

The “T” angle of the apparel supply chain shows how buyer, suppliers and garment manufacturer are linked
to each other. There are two sides of the “T” i.e. left and right. The left side is called the buyer to the
manufacturer and the right side is called the suppliers to manufacturer. The two horizontal sides are linked
to each other through the vertical side i.e. the buyer and suppliers are linked through apparel manufacturer.

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 The “T” angle illustrates how information flows from the buyer to the apparel manufacturer. The
information normally, sketches of the garment given by the buyer, are studied by the manufacturer and
accordingly list of raw materials required is made. The different swatch (standard for type of yarn, colour of
the yarn and piece of accessories) are sent to different suppliers for development. The supplier develops and
sends it to manufacturer and which is forwarded to buyer. Once approved by buyer, the orders are placed
with the suppliers with approved samples. When the raw materials are received as per the specifications
given to the supplier, in-house manufacturing starts with the production. The different process of
manufacturing results in the final garment product which is finally dispatched to the Buyer. The Buyer then
retails the same through stores to the ultimate consumers.

The “T” angle of the Apparel Supply Chain

The Buyer Side of the Apparel Supply Chain

The buyer side is normally involved with designing of the garment, production of samples, order collection,
apparel retail.

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 • Apparel Design

Designing of Apparel is either done in-house or contracted to design companies. The first step in designing
is the analysis of the consumer which the Company is targeting. The apparel design is influenced by various
parameters like other designer collection presented in the fashion cities of the world, fashion reviews from
earlier seasons, fashion magazine also plays an important input for the design efforts and most important is
the feedback gained from the sales of the similar products that were developed earlier.

Prototype garments are made for design approval which consumes considerable amount of time.

• Production of samples and order collection

The next step after the design in apparel supply chain is the production of the samples. Once the designs are
developed, decisions regarding the fabric like cotton or polyester and quantity etc are made. Based on fabric
and quantity decided, decisions related to country and manufacturers are made. Once decision is made,
developed designs are sent to different manufacturers and are asked to develop proto samples (the stage
brings design from paper to cloth for design appearance). Normally, during proto stage manufacturer figure
stands between 5 and 8. Once proto are developed, number of manufacturers is reduced to 2 to 3 depending
on the total quantity of the article and also on selected manufacturer production capacity or volumes. The
order quantities are placed to different manufacturers and manufacturer is asked to develop size-sets

(Alternate sizes of the garment are developed example S: Small, L: Large, XXL: Extra Extra Large). Once
size-set is approved, sale samples (samples developed for advertising and see the market response towards
the article) are made. Finally, with everything in place two identical pieces are developed one for the buyer
and other for the manufacturer called as sealer (sealer sample is identification or standard for production).
This sample is stamped by the buyers and the manufacturer can proceed with the production.

• Apparel Retail

Apparel products are made available to consumers in a variety of retail outlets. Specialty stores offer a
limited range of apparel products and accessories specializing in a specific market segment. Apparel sales
also take place through wholesalers or mass merchandisers such as Wal-Mart, Kmart and Target. These
retailers offer a variety of hard and soft goods in addition to apparel.

The Supplier Side of the Apparel Supply Chain

The suppliers in the apparel manufacturing are quite diversified. It involves suppliers of different raw
materials such as fibre and yarn producers, fabric manufacturers and other raw-materials.

• Fibre and Yarn Production

Fibres are categorized into two groups: natural and man-made. Natural fibre includes plant fibres such as
cotton, linen, jute etc and animal fibre such as wool. Synthetic fibres include nylon, polyester, acrylic etc.
Synthetic fibre production usually requires significant capital and knowledge. Natural and synthetic fibres of
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 short lengths are converted into yarn by “spinners”, “throwsters” and “texturizers”. Different types of fibres
can also be blended together to produce yarn such as grindle etc. apparel sale is also shared by mail order
companies, e-tailors through internet, and factory outlets etc.

The Manufacturer Side of the Apparel Supply Chain

• Fabric production

This segment of supply chain transforms the yarn into fabric by different processes such as weaving,
knitting a non-woven process. In a weaving process, yarns are looped together lengthwise and width wise at
right angles. Grey Yarn may be woven by a simple procedure to produce grey fabric and which are then
dyed for a specific colour. Instead, dyed yarns may also be woven but not dyed. In knitting, yarn is
interloped by latched and spring needles i.e. two different loops are mingled together with needle
adjustment.

Once the approvals regarding the raw-material are made by the buyer, the manufacturer can proceed with
the production.

• Apparel Production

The process proceeds once the fabric is produced; it is either dyed or washed. The dyed (colored) yarn
fabric is washed and grey fabric is dyed into a specific color. After dyeing or washing, fabric is finished by
removing water in the tumbler and later pressed in stenter which also maintains width of the fabric. Now the
fabric is ready for garmentising i.e. it is ready to be cut and stitched into the garment. Garmentising starts
with the design of the garment to be made (usually on the paper called specs).

Patterns (usually made up of thicker and stronger paper) are made from the design which is then used to cut
the fabric (cutting usually happens in the form of layers). An efficient layout of the patterns on the layers of
fabric is crucial for reducing the wasted material.

CAD systems are used for pattern layout and are integrated together with cutting systems. In apparel
manufacturing, all the stages are labor intensive as they are not suitable for any kind of automation. In the
stitching section, garment is usually assembled using the progressive bundle system (PBS). In PBS, the
work is delivered to individual work stations from the cutting department in bundles. Sewing machine
operators then process or sew them in batches i.e. first few are operation are joining the different parts
together and then further amendments related to design are carried out. The supervisors direct and balance
the line activities and check the quality. This involves large work in progress (WIP) inventories and minimal
flexibility. For faster apparel production, use of unit production system which reduces the buffer sizes
between the operations or modular assembly systems and allows a small group of sewing operators to
assemble the entire garment.

• Finishing, Packaging and Dispatch of Apparel

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 Garments produced are labelled, packaged and usually shipped to a warehouse. The garments are then
shipped to the retailers’ warehouse. In an effort to reduce time from placement of the product order to the
consumer’s purchase of the apparel, several practices are gaining popularity. There is increased automation
and use of electronic processing in the warehouses of both manufacturers and retailers.

Merchandising Department

The department acts as a liaison between the buyer and manufacturing division. On one hand, the
department is responsible for notifying changes in the product to the PPC and also to make sure that article
is produced as per planning by the PPC and within dispatch time limits. On the other hand, it has to
continually update buyer with planning and production status. The department takes care of all
correspondence with buyer and is responsible for communicating it to PPC. The department also takes care
of necessary sampling such as proto, size set and final which is necessary prior to production.

EXPORT PROCEDURE
1) Pre-Shipment Procedure:

• On receiving the requisition & purchase order from merchant, documentation department issues an
invoice. Two invoices are prepared i.e. commercial invoice & custom invoice. Commercial invoice is
prepared for the buyer & Custom invoice is prepared for the Custom authorities of both the countries.

• Packing list is prepared which details the goods being shipped.

• GSP certificate is prepared if the consignment is exported to EU or countries mentioned in the GSP list.

• Buying house inspects the goods & issues an inspection certificate.

• Certificate of origin is also issued and attached, if required.

• Following documents are given to Customs for their reference:

 Custom Invoice

 Packing list

 IEC certificate

 Purchase Order or L/C, if required.

 Custom annexure

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 • On receipt of above documents, customs will issue clearance certificate.

• After custom clearance a set of documents with custom clearance receipt are sent along with the
consignment to the forwarder. Forwarder books the shipment & as per the size of the cartons calculates
CBM & decides which container to be used.

• Following documents are sent to buying house for their reference, as per buyer’s requirement:

 Invoice

 Packing List

 GSP (if exports to Europe)

 Certificate of Origin (if required)

 Wearing Apparel sheet

 A copy of FCR/ Airway Bill/ Bill of Lading

Buying house then intimates the buyer about the shipment & gives the details regarding it. Buying house
will send a set of these documents to the buyer.

• Buyer collects the consignment from the destination port by showing the following documents:

 Invoice

 Packing List

 Bill of lading/ FCR/ Airway Bill

• On shipment of goods, exporter will send the documents to the importer’s bank.

2) Post-Shipment Procedure

• A foreign buyer will make the payment in two ways:

 TT (telegraphic transfer) i.e. Wire Transfer – (Advance payment, as per the clause – 50% advance &
remaining 50% on shipment)

 Letter of Credit

• If the payment terms are a confirmed L/C then the payment will be made by the foreign bank on
receiving the following documents:

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  Invoice

 Packing list

 B/L

 Any other required by the buyer or the country of import.

• The payment terms can be:

 At Sight

 Within 15 days from Bill of Lading or Airway Bill date.

 Within 30 days from Bill of Lading or Airway Bill date.

 Within 60 days from Bill of Lading or Airway Bill date.

 Within 90 days from Bill of Lading or Airway Bill date.

• After shipment, exporter sends the documents to the buyer’s bank for payment. As the buyer’s bank
receive the documents it will confirm with the buyer for release of payment. On confirmation, it will
make the payment in the foreign currency.

• The transaction will be Bank to Bank.

• The domestic branch will credit the exporter’s account, as against the respective purchase order or
invoice, in Indian rupees by converting the foreign currency as per the current bank rate.

• If the payment is through wire transfer, the payment will be made as per the terms agreed by the
exporter (Advance payment, as per the clause – 50% advance & remaining 50% on shipment).

Export Documents:
An export trade transaction distinguishes itself from a domestic trade transaction in more than one way. One
of the most significant variations between the two arises on account of the much more intensive
documentation work. The documents mentioned in the pre & post shipment procedure are discussed below:

1. Invoice: It is prepared by an exporter & sent to the importer for necessary acceptance. When the buyer is
ready to purchase the goods, he will request for an invoice. Invoice are of 3 types:

a. Commercial invoice: It is a document issued by the seller of goods to the buyer raising his claim for the
value of goods described therein, it indicates description of goods, quantity, value agreed per unit & total

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 value to be paid. Normally, the invoice is prepared first, & several other documents are then prepared by
deriving information from the invoice.

b. Consular invoice: It is certification by a consul or Government official covering an international

shipment of goods. It ensures that exporter’s trade papers are in order & the goods being shipped do not
violate any law or trade restrictions.

c. Customs invoice: It is an invoice made on specified format for the Custom officials to determine the
value etc. as prescribed by the authorities of the importing country. (See Annexure 5)

2. Packing list: It shows the details of goods contained in each parcel / shipment. Considerably more
detailed and informative than a standard domestic packing list, it itemizes the material in each individual
package and indicates the type of package, such as a box, crate, drum or carton. Both commercial stationers
and freight forwarders carry packing list forms. (See Annexure 6)

3. Certificate of Inspection: – It is a type of document describing the condition of goods and confirming
that they have been inspected. It is required by some purchasers and countries in order to attest to the
specifications of the goods shipped. This is usually performed by a third party and often obtained from
independent testing organizations.

4. Certificate of Origin: Importers in several countries require a certificate of origin without which
clearance to import is refused. The certificate of origin states that the goods exported are originally
manufactured in the country whose name is mentioned in the certificate. Certificate of origin is required
when:

• The goods produced in a particular country are subject to’ preferential tariff rates in the foreign market
at the time importation.

• The goods produced in a particular country are banned for import in the foreign market.

5. GSP: It is Generalized System of Preference. It certifies that the goods being exported have originated/
been manufactured in a particular country. It is mainly useful for taking advantage of preferential duty
concession, if available. It is applicable in countries forming European Union.

6. IEC Certificate: It is an Import-Export Code Certificate issued by DGFT, Ministry of Commerce,

Government of India. It is a 10 digit code number. No exports or imports will be effected without the IEC
code. It is mandatory for every exporter.

7. Wearing Apparel Sheet: It is like a check list which gives the detail regarding the content & design of
the garment packed.

8. Bill of Lading: The bill of lading is a document issued by the shipping company or its agent
acknowledging the receipt of goods on board the vessel, and undertaking to deliver the goods in the like
order and condition as received, to the consignee or his order, provided the freight and other charges as

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 specified in the bill have been duly paid. It is also a document of title to the goods and as such, is freely
transferable by endorsement and delivery.

9. Airway Bill: An airway bill, also called an air consignment note, is a receipt issued by an airline for the
carriage of goods. As each shipping company has its own bill of lading, so each airline has its own airway
bill. Airway Bill or Air Consignment Note is not treated as a document of title and is not issued in
negotiable form.

10. Mate's Receipt: Mate's receipt is a receipt issued by the Commanding Officer of the ship when the
cargo is loaded on the ship. The mate's receipt is a prima facie evidence that goods are loaded in the vessel.
The mate's receipt is first handed over to the Port Trust Authorities. After making payment of all port dues,
the exporter or his agent collects the mate's receipt from the Port Trust Authorities. The mate's receipt is
freely transferable. It must be handed over to the shipping company in order to get the bill of lading. Bill of
lading is prepared on the basis of the mate's receipt.

11. Shipping Bill: Shipping bill is the main customs document, required by the customs authorities for
granting permission for the shipment of goods. The cargo is moved inside the dock area only after the
shipping bill is duly stamped, i.e. certified by the customs. Shipping bill is normally prepared in five copies:

• Customs copy.

• Drawback copy.

• Export promotion copy.

• Port trust copy.

• Exporter's copy.

12. Letter of Credit: This method of payment has become the most popular form in recent times; it is more
secured as company to other methods of payment (other than advance payment).

A letter of credit can be defined as “an undertaking by importer’s bank stating that payment will be made to
the exporter if the required documents are presented to the bank within the variety of the L/C”.

Contents of a Letter Of Credit

A letter of credit is an important instrument in realizing the payment against exports. So, needless to
mention that the letter of credit when established by the importer must contain all necessary details which
should take care of the interest of Importer as well as Exporter. Let us see shat a letter of credit should
contain in the interest of the exporter.

This is only an illustrative list.

• Name and address of the bank establishing the letter of credit

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 • letter of credit number and date

• The letter of credit is irrevocable

• Date of expiry and place of expiry

• Value of the credit

• Product details to be shipped

• Port of loading and discharge

• Mode of transport

• Final date of shipment

• Details of goods to be exported like description of the product, quantity, unit rate, terms of shipment like
CIF, FOB etc.

• Type of packing

• Documents to be submitted to the bank upon shipment

• Tolerance level for both quantity and value

• If L/C is restricted for negotiation

• Reimbursement clause

Steps in an Import Transaction with Letter of Credit

• The importer includes a purchase contract for the buying of certain goods.

• The importer requests this bank to open a LC in favor of his supplier.

• The importer’s bank opens the LC as per the application.

• The opening bank will forward the original LC to the advising bank.

• The advising bank, after satisfying itself about the authenticity of the credit, forwards the same to the
exporter.

• The exporter scrutinizes the LC to ensure that it confirms to the terms of contract.

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 • In case any terms are not as agreed, the importer will be asked to make the required amendments to the
LC.

• In case the LC is as required, the exporter proceeds to make arrangements for the goods.

• The exporter will effect the shipment of goods.

• After the shipment is effected, the exporter will prepare export documents, including Bills of Exchange.

• The exporter’s bank (negotiation bank) verifies all the documents with the LC.

• If the documents are in the conformity with the terms of LC and all other conditions are satisfied, the
bank will negotiates the bill.

• The exporter receives the payment in his bank account.

• The LC Opening bank (Importer’s Bank) receives the bill and documents from the exporter’s bank.

• The importer’s bank checks the documents and informs the importer. The importer then accepts/pays the
bill (This would depend on the terms, Delivery against Acceptance or Delivery against Payment). On
acceptance/ payment, the importer gets the shipping documents covering the goods purchased by him.

• The LC issuing bank reimburses the negotiating bank, the amount, if the documents are found in order.

InCoTerms of Apparel Export Business:

To facilitate commerce around the world, the International Chamber of Commerce (ICC) publishes a set of
Incoterms, officially known as international commercial terms. Globally recognized, Incoterms prevent
confusion in foreign trade contracts by clarifying the obligations of buyers and sellers. Parties involved in
domestic and international trade commonly use them as a kind of shorthand to help understand one another
and the exact terms of their business arrangements. Some Incoterms apply to any means of transportation;
others apply strictly to transportation across water.

• FOB – Free on Board

• CFR – Cost and Freight

• C&F – Clearing and Forwarding

• CIF – Cost Insurance and Freight

• CM – Cost of Manufacturing

• CMT – Cost of Manufacturing and Trim

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 • FCL – Full Container Load.

• L/C – Letter of Credit

• LCL – Less Container Load.

• DAT – Delivery and Terminal.

• DAP – Delivery and Port.

• CFS – Container Freight Station.

• FOA – Free on Air

• DDU – Delivery Duty Unpaid.

• POD – Port of Discharge.

• POD – Proof of Delivery.

• POL – Port of Landing.

• POL – Port of Loading.

• ETA – Estimate Time of Arrival.

• ETD – Estimate Time of Departure.

• GSP – Generalized System of Preferences

• MAWB – Master Air Way Bill.

• HAWB – House Air Way Bill.

• FFU – Forty Fit Equivalent

• TFU – Twenty Fit Equivalent

• PC – Pont Cash.

• CO – Country of Origin

• GOH – Garments on Hanger.

• FPC – Flat Pack Container.

• CPT – Carriage Paid to.

• CY – Container Yard.
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 • CBM – Cubic Metter.

• NVOCC – Non Vassal Operating Common Carrier.

• DDP – Delivery Duty Paid.

EXECUTION PROCESS:

Execution process of garment export order is one of the principal parts of the merchandiser’s day-to-day
activity. Once the merchandiser received the order details from the buyer or customer. He will perform the
work from sampling to line development / product development process along with other departments of the
apparel industry like designing, sampling, etc. After order confirmation, the next job for the merchandiser is
to execute the order in the bulk format, means, perform the product development process for the total order
quantity with stipulated time frame. During this process, he has to undergo various technical issues and
problems regarding the production.

Steps of garments order execution are described as follows:

1. Having an Export Order:

Processing of an export order starts with the receipt of an export order. An export order, simply stated,
means 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. Generally an export order
may take the form of proforma invoice or purchase order or letter of credit.

2. Examination and Confirmation of Order:

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 Having received an export order, the exporter should examine it with reference to the terms and conditions
of the contract. In fact, this is the most crucial stage as all subsequent actions and reactions depend on the
terms and conditions of the export order.

The examination of an export order, therefore, includes items like product description, terms of payment,
terms of shipment, inspection and insurance requirement, documents realizing payment and the last date of
negotiation of documents with the bank. Having being satisfied with these, the export order is confirmed by
the exporter.

Lead time/Space Availability:

Lead time is time difference between buyer order confirmation date, date and delivery date. Within the time,
garments must be delivery.

Costing:
Costing means the way of calculating the cost of production of garments. Costing is done considering-

 Fabric price
 Accessories price &
 Cost of Making

 Purchase Order (P.O):

A buyer generated document that authorizes a purchase transaction. It includes description of
product, quantities, prices, discounts, payment terms, date of shipment etc.

 Guarantee of payment: Telegraphic Transfer (T.T): It is cash payment. Now it is not use. L/C
(Master) provided by buyer: L/C or Letter of Credit is a document which prepared by buyer to the
manufacturer.

 T & A Calendar Making:

T & A or “Time and Action” calendar is made by the manufacturer to complete the production
within a specific period of time.

 Fabric & Accessories Booking:

After making of T & A calendar, fabric & accessories booking is necessary.
Without fabric, all materials used in garments are called “Accessories” or “Trimmings”.

 Back to Back L/C:

Back to Back L/C is issued on the strength of master L/C. It is issued by the export’s bank to the
supplier to produce raw materials. It has 70-80% financial value of Master L/C.

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  Sampling:
The process of collecting or making sample is called “Sampling”.

Types of Garments Sample

a) Proto Sample:

Features: These samples are made by the manufacturer by available fabric and accessories.
These samples are made before or after order confirmation.
Purpose:
By These samples buyer checks whether or not the factory can make the garments.

b) Fit Sample:

Features: These samples are made by the manufacturer by available fabric and accessories.
These samples are made after order confirmation.
Purpose:
By These samples buyer checks the fitness or measurement of the garments.

c) Pre-Production (P.P) Sample:

Features: These samples are made by the manufacturer by actual fabric and accessories.
These samples are made after order confirmation.
Purpose:
Buyer will do bulk production following P.P sample.

d) Size Set Sample:

Features: These samples are made in all sizes. These samples are sent to the buyer. These
samples are made in the production floor.
Purpose:
These samples are made only for PP meeting or internal purpose.

e) Production Sample:

Features: These samples are collected from the production floor while bulk production is
running. These are sent to the buyer.
Purpose:
By these samples buyer compares Production Sample with the P.P Sample.

f) Garments Test Sample:

Features: These samples are collected from the production floor while bulk production is
running. These are sent to the testing house.

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 Purpose:
By These samples Testing House tests different aspects of the garments and sends “test
report” to the buyer and factory.

g) Shipment Samples:

Features: These samples are not so mandatory. These are sent to the buyer after the shipment
of the products.
Purpose:
By These samples buyer compares the Production Sample with the Shipment Sample.

 Fabric & Accessories in House:

Here confirms all fabrics and accessories in their hand.

 Inspection of the inventory & Report Making:

Check the quality & quantity of fabrics and accessories in house. After checking a report is made
with the test data.

 Pre-Production (P.P) Meeting:

This meeting is held just before going to the bulk production. This meeting is conducted by
following persons-
• Buying House QC
• Factory QC
• Buying House Merchandiser
• Factory Merchandiser
• Cutting Master
• Pattern Master
• Production Manager
• Sample man

3. Manufacturing or Procuring Goods:

The Reserve Bank of India (RBI), under the export credit (interest subsidy) scheme, extends pre-shipment
credit to exporter to finance working capital needs for purchase of raw materials, processing them and
converting them into finished goods for the purpose of exports. The exporter approaches the bank on the
basis of laid down procedures for the pre-shipment credit. Having received credit, the exporter starts to
manufacture / procure and pack the goods for shipment overseas.

4. Garment Production Process

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 Garment production is an organized activity consisting of sequential processes such as laying, marking,
cutting, stitching, checking, finishing, pressing and packaging. Garment production is an organized activity
consisting of sequential processes such as laying, marking, cutting, stitching, checking, finishing, pressing
and packaging. This is a process of converting raw materials into finished products. It will be difficult to
maintain the industry if production is not, up to the mark if the preproduction phase of preparation of
material is not properly carried out.
Garment manufacturing involves many processing steps, beginning with the idea or design concept and
ending with a finished product. Apparel manufacturing process involves Product Design, Fabric Selection
and Inspection, Patternmaking, Grading, Marking, Spreading, Cutting, Bundling, Sewing, Pressing or
Folding, Finishing and Detailing, Dyeing and Washing, QC etc.

Manufacturing steps

1. Receiving Fabrics:

Garment factories receive fabric from overseas textile manufacturers in large bolts with cardboard or
plastic center tubes or in piles or bags. The fabric typically arrives in steel commercial shipping
containers and is unloaded with a forklift. Garment factories often have a warehouse or dedicated area to
store fabric between arrival and manufacturing.

2. Fabric Relaxing

Garment manufacturers perform the relaxing process either manually or mechanically. Manual fabric
relaxing typically entails loading the bolt of fabric on a spinner and manually feeding the material
through a piece of equipment that relieves tension in the fabric as it is pulled through. Mechanical fabric
relaxing performs this same process in an automated manner.

3. Spreading, Form Layout, and Cutting

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 After the fabric has been relaxed, it is transferred to the spreading and cutting area of the garment
manufacturing facility. The fabric is first to cut into uniform plies and then spread either manually or
using a computer-controlled system in preparation for the cutting process. The fabric is spread to:

 Allow operators to identify fabric defects;

 Control the tension and slack of the fabric during cutting; and
 Ensure each ply is accurately aligned on top of the others.

The number of plies in each spread is dependent on the fabric type, spreading method, cutting
equipment, and size of the garment order.

4. Laying
Laying of paper pattern helps one to plan the placement of the pattern pieces in a tentative manner.

 Lay large pieces first and then fit in the smaller ones
 It is very economical in laying the pattern and cutting. Even a small amount of material saved
in a single layer will help to bring about a large saving of money as hundreds of layers of
fabric will be laid and cut simultaneously.
 When laying, the length of the garment should be parallel to the selvedge of the material. Be
sure the pattern is placed in the correct grain. Fabrics drape and fall better on the lengthwise
grain and also last longer.
 Parts that have to be placed on the fold should be exactly on the edge of the fold.
 All laying should be done on the wrong side of the material.
 When laying the paper pattern, consider the design of the fabric. Care should be taken to see
that the design runs in the same direction throughout the garment. All checks and strips
should match the seams both lengthwise and across.60

5. Marking
This can be a manual or a computerized technique

 The marker planner uses full-size patterns and arranges them in an economical manner on
marker paper.
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  This is a specially printed paper having symbols on it which enable the marker planner to
visually control the positioning of components according to specified grain lines.
 Markers produced on paper are fixed to fabric with pins, staples or on an adhesive paper
which is heat sealed to the top layer of the fabric.
 Marker planning provides details of the spreads. In the cutting room, the fabric is laid
manually or a spreading machine is used to arrange fabric inlays 100 (layers) and markers for
the production, any in orders planned. Here planning is done also for fusible, linings, trims,
pocketing etc.
 The supervisors of marker planner plan and allocates the cut orders to various operations to
be carried out in the cutting room.

6. Cutting
This is the major operation of the cutting room when they spread and cut into garments. Of all the
operations in the cutting room, this is the most decisive, because once the fabric has been cut, very little
can be done to rectify serious defects.

 A first planning consideration is whether the totals arrived at in the cutting room are the same
as those required to maintain full production in the sewing room and subsequently the
planned delivery schedule. Any cloth problems created in the cutting room can affect the
output in the sewing room. Assuming all components of fabric, design, and trims are
acceptable and correctly planned and cut, the next stage is to extend the cutting room
programme to the sewing room.
 All cutting operations are carried out by straight knife cutting machines.

7. Embroidery and Screen Printing

Embroidery and screen printing are two processes that occur only if directly specified by the customer;
therefore, these processes are commonly subcontracted to off-site facilities. Embroidery is performed
using automated equipment, often with many machines concurrently embroidering the same pattern on
multiple garments. Each production line may include between 10 and 20 embroidery stations. Customers
may request embroidery to put logos or other embellishments on garments.

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 Screen printing is the process of applying paint-based graphics to fabric using presses and textile dryers.
Specifically, screen printing involves sweeping a rubber blade across a porous screen, transferring ink
through a stencil and onto the fabric. The screen printed pieces of fabric are then dried to set the ink.
This process may have varying levels of automation or may largely be completed at manually operated
stations. Like embroidery, screen printing is wholly determined by the customer and may be requested
to put logos or other graphics on garments or to print brand and size information in place of affixing
tags.

8. Sewing
Stitching or sewing is done after the cut pieces are bundled according to size, colour and quantities
determined by the sewing room.

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. For example, the first
operator may sew the collar to the body of the garment and the next operator may sew a sleeve to the
body. Quality assurance is performed at the end of the sewing line to ensure that the garment has been
properly assembled and that no manufacturing defects exist. When needed, the garment will be
reworked or mended at designated sewing stations. This labor-intensive process progressively
transforms pieces of fabric into designer garments.

 The central process in the manufacture of clothing is the joining together of components.
 Stitching is done as per the specification is given by the buyer.
 High power single needle or computerized sewing machines are used to complete the sewing
operation. Fusing machines for fusing collar components, button, and buttonhole, sewing
machines for sewing button and buttonholes are specifically employed.

9. Checking
It is realistic to assume that however well checking or quality control procedures operate within a
factory there will always be a certain percentage of garments rejected for some reason or other. The best
way to carry out quality checks is by

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  Establishing a standard as a criterion for measuring quality achievement.
 Production results can be measured and compared to the planned quality standard.
 Corrective measures to be carried out if there are any deviations in the plans.

Ideally, any system should detect possible deviations before they occur through forecasting. Work
produced with minus defects will produce quality products, enhance economy and productivity.

10. Spot Cleaning and Laundry

In addition to identifying manufacturing defects, employees tasked with performing quality assurance
are also looking for cosmetic flaws, stains, or other spots on the garment that may have occurred during
the cutting and sewing processes. Spots are often marked with a sticker and taken to a spot-cleaning area
where the garment is cleaned using steam, hot water, or chemical stain removers.

Some customers request that a garment be fully laundered after it is sewn and assembled; therefore,
garment factories often have on-site laundry or have subcontract agreements with off-site laundry
operations. Commercial laundry facilities are equipped with at least three types of machines: washers,
spinners, and dryers. Some facilities also have the capability to perform special treatments, such as
stone- or acid-washing.

Laundering is done by highly sophisticated washing machines if any articles are soiled during the
manufacturing process. However, this step is required only if the garments are soiled.

11. Fusing and Pressing

Fusing and pressing are two processes which have the greatest influence on the finished look of a
garment. Fusing creates the foundation and pressing put the final seal of quality on the garment.

After a garment is fully sewn and assembled, it is transferred to the ironing section of the facility for
final pressing. Each ironing station consists of an iron and an ironing platform. The irons are similar
looking to residential models but have steam supplied by an on-site boiler. Workers control the steam
with foot pedals and the steam is delivered via overhead hoses directly to the iron. In most facilities, the
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 ironing platforms are equipped with a ventilation system that draws steam through the ironing table and
exhausts it outside the factory.

The basic components of pressing are:

 Steam and heat are necessary to relax the fabric and make it pliable enough to be molded by
manipulation.
 Pressure: when the cloth has been relaxed by steam, the pressure is applied which sets the fibers
into their new positions.
 Drying: After the application of steam and pressure, the component or garment must be dried
and cooled so that cloth can revert to its normal condition. This is done by a vacuum action
which removes surplus water from the fabric and at the same time cools it. For some pressure
operations hot air or infrared heating is used instead of vacuum for drying;

Machinery used for pressing and finishing are

 Hand irons with a vacuum press table

 Scissors press
 Carousel machines
 Steam dolly

12. Packaging

In the last steps of making a product retail-ready, garments are folded, tagged, sized, and packaged
according to customer specifications. Also, garments may be placed in protective plastic bags, either
manually or using an automated system, 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.

Most garments are packed in plastic bags, either at the end of production or when they enter the finished
goods store. Products like shirts and underwears are usually bagged and boxed directly after final
inspection and enter the stores in prepacked form. For these and similar types of products, many
automatic machines are used.

Other hanging garments such as Jackets, dresses & skirts are usually bagged by manual machines, semi-
automatic machines, and fully automatic machines. Some of these automatic machines bag, seal, and
transport in trolly; some 500 garments per hour.

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 When the boxed or hanging garment has to be transported in bulk the garment or boxes are packed into
cartons which can be sealed by adhesive paper or plastic Manual and automatic machines are available
for both.

5. Clearance from Central Excise:

As soon as goods have been manufactured/ procured, the process for obtaining clearance from central excise
duty starts. The Central Excise and Sale Act of India and the related rules provide the refund of excise duty
paid. There are two alternative schemes whereby 100 per cent rebate on duty is given to export products on
the submission of the proof of shipment.

The first scheme is to make payment of the excise duty at the time of removing the export consignment
from the factory and file a claim for rebate of duty after exportation of goods. The second scheme is to
remove goods from factory/warehouse without payment but under an appropriate bond with the excise
authorities. The exporter needs to apply on a form known as AR4 or AR4A to the Central Excise Range
Superintendent for obtaining excise clearance.

Form A is filed when goods are to be cleared after examination by the excise inspector. In all other cases,
form AR4A is filed.

6. Pre-Shipment Inspection:
There are number of-goods whose export requires quality certification as per the Government of India’s
notification. Consequently, the Indian custom authorities will require the submission of an inspection
certificate issued by the competent and designated authority before permitting the shipment of goods takes
place.

Inspection of export goods may be conducted under:

 Consignment-wise Inspection
 In-process Quality Control, and
 Self-Certification.

The Inspection Certificate is issued in triplicate. The original copy is for the customs verification. The
second copy of the certificate is sent to the importer and the third copy remains with the exporter for his
reference purpose.

Final Inspection:
Final inspection is conducted by the –

Buyer
Buyer Q.C
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 Trader Q.C
Self-Inspection: Conducted by the factory Q.C.
Third Party Inspection: Conducted by the testing houses.

7. Appointment of Clearing and Forwarding Agents:

On completion of the process of obtaining the Inspection Certificate from the custom agencies, the exporter
appoints clearing and forwarding agents who perform a number of functions on behalf of the exporter.

The main functions performed by these agents include packing, marking and labeling of consignment,
arrangement for transport to the port arrangement for shipment overseas, customs clearance of cargo,
procurement of transport and other documents.

In order to facilitate the exporter in discharging his duties, the following documents are submitted to
the agent:
 Commercial invoice in 8-10 copies
 Customs Declaration Form in triplicate
 Packing list
 Letter of Credit (original)
 Inspection Certificate (original)
 G.R. Form (in original and duplicate)
 AR4/ AR4A (in original and duplicate)
 GP-l/GP-2 (original)
 Railway Receipt/Lorry Way Bill, as the case may be

8. Goods to Port of Shipment:

After the excise clearance and pre-shipment inspection formalities are completed, the goods to be exported
are packed, marked and labeled. Proper marking, labeling and packing help quick and safe transportation of
goods. The export department takes steps to reserve space on the ship through which goods are to be sent to
the importer.

The shipping space can be reserved either through the clearing and forwarding agent or freight broker who
works on behalf of the shipping company or directly from the shipping company. Once the space is
reserved, the shipping company issues a document known as Shipping Order. This order serves as a proof of
space reservation.

If goods are sent through a road carrier to the port, no specific formality is involved. In case, the goods are
sent by rail to the port of shipment, allotment of wagon needs to be obtained from the Railway Board.

The following documents are submitted to the booking railway yard/station:

 Forwarding Note (A Railway Document)
 Shipping Order
 Wagon Registration Fee Receipt
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 Once wagons have been allotted, goods are loaded, for which railways will issue Railway Receipt (RR).
Then, this receipt and other documents are sent to the clearing and forwarding agent at the port town. At the
same time, the production/export department takes insurance policy in duplicate for risk coverage (internal
as well as overseas) for the goods to be exported.

9. Port Formalities and Customs Clearance:

Having received the documents from the export department, the clearing and forwarding agent takes
delivery of the cargo from the railway station or the road transport company and stores it in the warehouse.
He also obtains customs clearance and permission from the port authorities to bring the cargo into the
shipment shed.

The custom department grants permission for export at the office of the customs and physical verification of
goods in the shipment shed. The clearance for export is given on the Shipping Bill.

The clearing and forwarding agent is required to submit the following documents with the Customs
House for obtaining customs clearance and permission:
 Shipping Bill
 Contract Form
 Letter of Credit, if applicable
 Commercial Invoice
 GR Form
 Inspection Certificate
 AR4/AR4A Form
 Packing List, if needed

After receiving documents from the export department, the clearing and forwarding agent presents the Port
Trust Document to the Shed Superintendent of the port. He obtains carting order bringing the cargo to the
transit shed for physical examination by the Dock Appraiser.

The Dock Appraiser is presented the following documents to facilitate him in physical examination of
export goods:
 Shipping Bill
 Commercial Invoice
 Packing List
 AR4/ AR4A Form and Gate Pass
 GR Form (duplicate)
 Inspection Certificate (original)

The Dock Appraiser, after making examination, makes ‘Let Export’ endorsement on the duplicate copy of
the Shipping Bill and hands over it to the Forwarding Agent. All these documents are presented to the
Preventive Officer who puts an endorsement ‘Let Ship’ on the duplicate copy of the Shipping Bill. The
preventive officer supervises the loading of cargo on board the vessel.

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 After the goods are loaded on board the vessel, the captain of the ship issues a receipt known as ‘Mate’s
Receipt’ to the Shed Superintendent of the port concern. The forwarding, agent after paying port charges,
takes the delivery of the ‘Mate Receipt’. He submits to Shipping Company and requests it to issue the Bill
of Lading.

10. Dispatch of Documents by Forwarding Agent to the Exporter:

After obtaining the Bill of Lading from the Shipping Company, the clearing and forwarding agent
dispatches all the documents to his / her exporter.

These documents include:

 Commercial Invoice (attested by the customs)
 Export Promotion Copy
 Drawback Copy
 Clean on Board Bill of Lading
 Letter of Credit
 AR4/ AR4A and Gate Pass
 GR Form (in duplicate)

11. Certificate of Origin:
On receipt of above documents from the forwarding agent, the exporter now applies to the Chamber of
Commerce for a Certificate of Origin and obtains it. If the goods are exported to countries offering GSP
concessions, the exporter needs to procure the GSP Certificate of Origin from the concerned authority like
Export Inspection Agency.

12. Dispatch of Shipment Advice to the Importer:

At last, the exporter sends ‘Shipment Advice’ to the importer intimating the date of shipment of the
consignment by a named vessel and its expected time of arrival at the destination port of the importer.

The following documents are also sent to the importer to facilitate him for taking delivery of the’
consignment:
 Bill of Lading (non-negotiable copy)
 Commercial Invoice
 Packing List
 Customs Invoice

13. Submission of Documents to Bank:

At the end of the process, the exporter presents the following documents to his bank for realization of his
amount due to the importer:
 Commercial Invoice’
 Certificate of Origin
 Packing List
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  Letter of Credit
 Marine Insurance Policy
 GR Form
 Bill of Lading
 Bill of Exchange
 Bank Certification
 Commercial Invoice

14. Claiming Export Incentives:

On completion of the processing of an export order at the three levels of shipment i.e., pre-shipment,
shipment and post-shipment, the exporter claims for export incentives admissible to him / her.

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 CONCLUSION:

This document is to know the process involved in an apparel firm and to study about the various departmental
functions which coordinates to complete the export cycle. The export Procedure of the firm has been seen
clearly and other related aspect has been known. From the analysis it is found that the performance of the
company is satisfactory, but the company is facing problem regarding excess of documents which causes delay
in transportation. Therefore necessary steps should be taken to limit the number of documents so that the
company can make distribution at right for the company and it helps the company to have competitive
advantage over its competitors.

Some important steps and documents in export transaction are preliminary enquiries and offer, confirmation of
order, export license, finance, procurement of goods, shipping space, packing and marking, quality control and
pre-shipment inspection, excise clearance, customs formalities, exchange control formalities, insurance,
shipping goods, negotiation of documents and export incentives.

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 BIBLIOGRAPHY:

• https://textilelearner.net/step-by-step-execution-of-garment-export-order/
• https://cleartax.in/s/export-procedure
• https://www.cogoport.com/blogs/export-process-from-india
• https://www.slideshare.net/kkydavv/exim-41688265?qid=644faa5b-de7d-44ae-9ff3-
d8dd353dce3a&v=&b=&from_search=7
• https://www.investopedia.com/terms/i/incoterms.asp

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