A report submitted towards the partial fulfillment of the requirements of the two years full-time Post Graduate Diploma in Management

Submitted by: Prashant Rampuria Post Graduate Diploma in Management (International Business) Roll No.: 2K81/IB/29 2008-2010

ASIA-PACIFIC INSTITUTE OF MANAGEMENT 3, Institutional Area, Jasola, New Delhi-110025


The purpose of industrial training is to acclimatize the students with the organization & the industry in which this organization exists. Summer training is a part of management study & is very important for each & every student. Management trainees are trained in such a way that after they come out, they can manage the matters of organization in a planned and systematic manner My project is aimed at understanding the basis of export procedure & documentation. It includes how an export order is processed & what all documents are required to complete the legalities of the export order. This training was a valuable experience in terms of understanding & learning & I believe that in future I will get fruitful results.



A project report seems to be an individual effort is in fact teamwork. Summer training at SPL Industries Ltd. was just like an opportunity to shake hand with the practical world of business. I am indebted to all those individuals who helped me in gaining knowledge & insight into various aspects of export procedure & documentation. The source of learning have been one too many & a complete list of individual references would become encyclopedic. I want to express my deepest gratitude to Mrs. Mona Malhotra, GM Marketing, SPL Industries Ltd, without whose help this summer internship in SPL Industries would not be possible. I am grateful to Mr. Jagmohan Chhibber, Export manager, SPLIL, for sharing his experience & knowledge & without whose help the project would not have got any shape. My deepest appreciation also extends to Dr. Tulika Chandra, Project guide, Faculty AIM, who critically reviewed my project report & provided suggestions. I would like to thank Dr. D. K. Banerjee, Director AIM, for his constant support & encouragement. Finally, I would express my gratitude towards Mr. Shailendra Tyagi, Sr. Manager, CCR AIM for facilitating my Summer Internship



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...27 5|Page ..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................9 Chapter 2 Methodology .......22 Figure 4: The PPC link with other departments ................................................7 Project Objectives ......................................31 Bibliography .........12 Chapter 3 Objective of the project .6 Chapter 1 Introduction .....................................Table of Contents Executive Summary ...............................................................................................................................................................................................................21 Figure 3: Garment Process Flow Chart ..............................................................16 Figure 2: Fabric Process Flow Chart ...............................................................................................................8 Scope of the study .....................................................................................................................7 Background of the problem task undertaken ..........14 To understand the apparel business process ........14 To understand the working of various departments ....................................................................21 To understand the role of merchandisers .............................................................................................................................7 Rationale of the study ....................................8 Introduction of the company ................................48 List of Illustrations Figure 1: The “T” angle of the Apparel Supply Chain ............................47 Annexure......................................................................................28 To understand the export procedure ........................................................................

This part includes introduction of the company. In the final objective a brief summary of all the export documents used at the SPLIL for legalizing an export order is given. Exploratory research is used for data collection as is best suited for this fulfilling the project objective. its plant location. Chapter 2 discusses the Methodology used for the data collection. The Buyer. They are the one who interacts with the clients & update the company with client’s requirement. Next objective gives a brief idea on the merchandisers & what role they play. Further the documents regarding pre & post shipment procedure are discussed. The three sides of the supply chain i. It begins with the introduction of the company i. Next objective discusses a view of different departments working in synchronization in order to process an export order. 6|Page . It is explained through the “T” angle apparel supply chain. capacity. the client base & some export figures giving idea of Exports at SPL Industries Ltd. The role of each department is discussed in context of export procedure & documentation & what contribution they make towards it.e.e. the Supplier & the Manufacturer. In the end Annexure are attached as supporting documents. Next chapter provides the detail on the objective: Apparel business process. company profile. are discussed. They act as a liaison between the company & the client.EXECUTIVE SUMMARY This project is aimed at understanding export procedure & documentation.

contributing towards processing of an export order. selecting a project on export procedure & documentation is an obvious & important decision. d) To study the Export Documentation in SPL industries ltd. c) To understand the role of Merchandisers in SPL industries ltd. i. exporting is complex and challenging activity in today’s dynamic world environment as it involves the performance of operations that determine existing and potential demand in a market. b) To understand the working of various departments of SPL industries ltd. Pre – Shipment procedure ii. Learning the step-by-step processes & procedures to be followed in an export contract is a crucial activity in export procedure.CHAPTER-1 Introduction 1.2) Project Objectives a) To understand the Apparel Business Processes. As we know. Post – Shipment procedure 7|Page . Project on Export house is uncommon & that on an Apparel Export House is rare. 1. So.1) Background of the problem task undertaken It is an opportunity to do the summer internship in SPL Industries Ltd which is a manufacturer & exporter of Knitted fabric and Knitted garments.

selecting this project is a judicious decision. The documentation procedure depends on the type of goods. Different departments work in synchronicity & various documents are prepared in the process. 1. many activities like communication between different departments. are undertaken.3) Rationale of the Study Export in simple words means selling goods abroad or Export refers to outflow of goods and services and inflow of foreign exchange. process of manufacturing. It 8|Page . the process of outsourcing raw material. Hence. packing and shipment of goods etc.4) Scope of the Study The aim of this project report is to unfold stepwise all complexities involved in the export business right from receiving an export order to final realization of export proceeds. This field has a great scope because today each company whether it is small or big wants to engage in foreign trade. Hence. In order to complete an order for Knitted garment. payment process. Each country has its own rules and regulations regarding the foreign trade. quality control. For the fulfillment of all the rules and regulations of different countries an exporting company has to maintain and fulfill different documentation requirements. a single mistake or lack of proper planning can lead to the rejection of the whole order or increase the cost.1. it is very important to study the export procedure and documents involved in it. So. Today’s world is the global village in which each country is trading with other countries in the form of export or import. type of industry and the country to which goods is to be exported.

This project would be helpful to fulfill many loopholes of manufacturing. H.537. polo shirts.717.285 pieces.5. 1. sweat shirts.gives a detail idea of how different departments in an Apparel export house work in synchronization so that an export order is processed. name changed to SPL Industries (SPLIL) in 1994    Company promoted by Mr.263.5) Introduction of the Company 1.000 square feet spread over 14 acres of prime land  It employs about 6000 people including contract labour The Company’s total turnover for the year ended March 31. 2009 was US $ 66. 9|Page .1907 from the sale of 20. Vijay Jindal A leading manufacturer & exporter of Knitted fabric and Knitted garments SPLIL designs.R. manufactures and sells a wide range of outer wear – T shirts. for top end customers in the international market  SPLIL has five factories in Faridabad covering 500. Gupta and Mr. processing and analyzing the export order as well as documentation. etc.1) About SPL Industries Ltd      Established in 1994 A leading Apparel Export House of India One of the largest vertically integrated Knitwear plants in India Reputed for excellent Product Development and Design capability Incorporated as Shivalik Prints Private Limited in 1991.

Garment manufacturing plant .” 1. Garment manufacturing plant . Faridabad-121006 (India) 5.5.2) DETAILS OF SPL INDUSTRIES LIMITED   IEC Code number: 0593027771 (See Annexure 1) AEPC Registration number: 101304 (See Annexure 2) 1. and customer satisfaction using the best technology. Sector-6.Plot No. Faridabad-121 006 (India) 4. Garment manufacturing plant . Mathura Road. 7 Sector-6. Sector-6.Plot No.3) LOCATION OF THE PLANTS The Company’s Plants are located at – 1.128.“The vision of the Company is to become a leading manufacturer and exporter of apparel by continuously excelling in quality. service. Sector-24.22. 15/1. 10 | P a g e . processes and people. and located within 10-12 km from each other. Faridabad All Locations are within 30 KM from New Delhi.Plot No. Fabric Dyeing and processing plant .5. Faridabad-121 006 (India) 3. Mile Stone.Plot No. Faridabad-121 006 (India). 2.Plot No. Garment manufacturing plant .21.

5. J.5. Customers          Countries          Gap Inc.000 Pcs per month 1.4) SPLIL Capacities SECTION Knitted Dyed Fabric Mercerizing Garment Washing & Dyeing Knitted Garments Sweaters CAPACITY 20 Tons per day 05 Tons per day 40.000 Pcs per day 750. Roebuck and Co.C.5) SPL Customers SPLIL’s high profile customers are not only happy but also satisfied which has earned them recognition and unflattering loyalty from prominent buyers worldwide.1. Haggar Clothing Co.000 Pcs month 100. Supreme International USA Canada Mexico UK Germany Spain Netherlands Middle East Japan 11 | P a g e . Penney Company Kohl’s Corporation Federated Department Store Phillips-Van Heusen Corporation Hartmarx Corporation Sears.

Hence Exploratory research design is the need of the hour. For external research Internet website & published books were consulted. Further there are few reasons which made me to use Exploratory Qualitative research:  It is not always desirable or possible to use fully structured or formal methods to obtain information from respondents. 12 | P a g e . Qualitative research through In-Depth Interviews has been adopted.  In Secondary data.  People may be unable & unwilling to answer certain questions or unable to give truthful answers.Chapter-2 Methodology Our primary objective of doing this project is to get the first hand knowledge of functioning of an export house. project research methodology is as follows:  In Primary data. For internal research Ready to use documents available with the organization were used. For interviews non–structured open-ended questions were used. rather we are learning the export procedure. Since we are not comparing two different entities on the basis of their financial results. Thus. both internal & external research was done.  People may be unable to provide accurate answer to question that tap their sub consciousness.

through contact with the employees. Persons having low knowledge in this field don’t go for such methodology.Limitations of the Methodology 1. Labour intensive data collection: it can be extremely time consuming. exposure to the norms & familiarity with their practices. 3. Data collection is the labour intensive process the researcher immerses himself or herself to build an understanding of the organization. 13 | P a g e . Conclusion & interpretation of qualitative research: they are primarily communicated in the form of case studies. 2. Need for training in qualitative research: There is a need of training in qualitative research methodology. Concern about the validity: the issue arises from the fact that qualitative research does not rely on tests for reliability & credibility that are external to data collection & analysis. 4. The case study is written after an extensive process of data collection through interviewing & participant observation.

there are fibre (raw material) producers using either natural or synthetic materials. Raw fibre is spun.4) To study the Export Documentation in SPL Industries Ltd a) Pre – Shipment procedure b) Post – Shipment procedure 2.1) To understand the Apparel Business Process 2. At the top of the supply chain. left and right. The apparel industry is divided into four main segments. 2. The third segment of the supply chain is the apparel manufacturer which converts fabric into garment with many processes involved. 14 | P a g e . There are two sides of the “T” i.1) To 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 final segment is the retailers who are responsible for making apparels available to consumers. The two horizontal sides are linked to each other through the vertical side i.e. the buyer and suppliers are linked through apparel manufacturer. contributing towards processing of an export order. The left side is called the buyer to the manufacturer and the right side is called the suppliers to manufacturer.CHAPTER-3 Objective of the project 2. The “T” angle of the apparel supply chain shows how buyer. woven or knitted into fabric by second segment.2) To understand the working of various departments of SPL Industries Ltd.e. suppliers and garment manufacturer are linked to each other.3) To understand the role of Merchandisers in SPL Industries Ltd 2.

The supplier develops and sends it to manufacturer and which is forwarded to buyer. The information normally. colour of the yarn and piece of accessories) are sent to different suppliers for development.The “T” angle illustrates how information flows from the buyer to the apparel manufacturer. sketches of the garment given by the buyer. in-house manufacturing starts with the production. are studied by the manufacturer and accordingly list of raw materials required is made. The Buyer then retails the same through stores to the ultimate consumers. Once approved by buyer. The different swatch (standard for type of yarn. the orders are placed with the suppliers with approved samples. When the raw materials are received as per the specifications given to the supplier. 15 | P a g e . The different process of manufacturing results in the final garment product which is finally dispatched to the Buyer.

1) Description of the Buyer Side of the Apparel Supply Chain The buyer side is normally involved with designing of the garment. production of samples. 16 | P a g e . apparel retail.Figure 1: The “T” angle of the Apparel Supply Chain 2. order collection.1.

during proto stage manufacturer figure stands between 5 and 8. Once size-set is approved. Prototype garments are made for design approval which consumes considerable amount of time. decisions regarding the fabric like cotton or polyester and quantity etc are made. 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. Apparel Design Designing of Apparel is either done in-house or contracted to design companies. 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. 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). fashion reviews from earlier seasons. 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. Once decision is made. Based on fabric and quantity decided. Normally. Once proto are developed. sale samples (samples developed for 17 | P a g e . L: Large.  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 related to country and manufacturers are made. The first step in designing is the analysis of the consumer which the Company is targeting. XXL: Extra Extra Large). The apparel design is influenced by various parameters like other designer collection presented in the fashion cities of the world.

Maxx buy excess stock of designer.label and branded apparel from retailers and are able to offer lower prices but with incomplete assortments. Departmental stores like Macy’s. The apparel sale is also shared by mail order companies. Synthetic 18 | P a g e . Apparel sales also take place through wholesalers or mass merchandisers such as Wal-Mart. such as Marshall’s and T.2) Description of the Supplier Side of the Apparel Supply Chain The suppliers in the apparel manufacturing are quite diversified. Off-price stores. Specialty stores offer a limited range of apparel products and accessories specialising in a specific market segment. and factory outlets etc. fabric manufacturers and other raw-materials. jute etc and animal fibre such as wool.1. These retailers offer a variety of hard and soft goods in addition to apparel. Nordstrom offer a large number of national brands in both hard and soft goods categories. e-tailers through internet. Natural fibre includes plant fibres such as cotton. Kmart and Target. This sample is stamped by the buyers and the manufacturer can proceed with the production. 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). It involves suppliers of different raw materials such as fibre and yarn producers.  Fibre and Yarn Production Fibres are categorised into two groups: natural and man-made.J.  Apparel Retail Apparel products are made available to consumers in a variety of retail outlets.advertising and see the market response towards the article) are made. 2. linen. Finally.

it is ready to be cut and stitched into the garment. Once the approvals regarding the raw-material are made by the buyer. “throwsters” and “texturizers”.e. dyed yarns may also be woven but not dyed. The dyed (coloured) yarn fabric is washed and grey fabric is dyed into a specific colour. Different types of fibres can also be blended together to produce yarn such as grindle etc.  Apparel Production The process proceeds once the fabric is produced. yarns are looped together lengthwise and width wise at right angles. two different loops are mingled together with needle adjustment. the manufacturer can proceed with the production. 2. knitting a non-woven process. Garmentising starts with the design of the garment to be made (usually on the paper called specs). fabric is finished by removing water in the tumbler and later pressed in stenter which also maintains width of the fabric. yarn is interloped by latched and spring needles i. Natural and synthetic fibres of short lengths are converted into yarn by “spinners”. Synthetic fibre production usually requires significant capital and knowledge. polyester.1. After dyeing or washing. In a weaving process. Now the fabric is ready for garmentising i.fibres include nylon. acrylic etc. Patterns (usually made up of thicker and stronger paper) are made from the design 19 | P a g e . In knitting.e. it is either dyed or washed. Grey Yarn may be woven by a simple procedure to produce grey fabric and which are then dyed for a specific colour. Instead.3) Description of 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.

Packaging and Dispatch of Apparel Garments produced are labelled. Sewing machine operators then process or sew them in batches i.which is then used to cut the fabric (cutting usually happens in the form of layers). In PBS. In apparel manufacturing. CAD systems are used for pattern layout and are integrated together with cutting systems. garment is usually assembled using the progressive bundle system (PBS). An efficient layout of the patterns on the layers of fabric is crucial for reducing the wasted material. 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.e. all the stages are labour intensive as they are not suitable for any kind of automation. The garments are then shipped to the retailers’ warehouse. This involves large work in progress (WIP) inventories and minimal flexibility. packaged and usually shipped to a warehouse. 20 | P a g e . the work is delivered to individual work stations from the cutting department in bundles. first few are operation are joining the different parts together and then further amendments related to design are carried out. In the stitching section. The supervisors direct and balance the line activities and check the quality. For faster apparel production.  Finishing. There is increased automation and use of electronic processing in the warehouses of both manufacturers and retailers. 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.

2.2) To understand the working of various departments of SPL Industries Ltd contributing towards processing of an export order.

2.2.1) Manufacturing Process and Production Figure 2: Fabric Process Flow Chart

Testing of Yarns Count, knit ability, wash ability, spirality, strength, shade (if yarn dyed) KNITTING – Trial of 1st lot of fabric in Dyeing.

100% fabric Quality check

Yarn Inhouse

Bulk Knitting

Batch Preparation

Knit Set Approval

Recipe formulation (automatic color kitchen)



Dyeing Process

100 % Fabric Quality Checking

Shade Color Fastness Approval

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Figure 3: Garment Process Flow Chart

Fabric Audit Batch wise – Physical Parameters, Trims Matching


Automatic Fabric Layering Batch Wise


Issue to Stitching

CAD marker - As per approved garment

100% Panel Inspection

100% Needle Detection

100% Garment Checking






Final Audit

100% Garment Checking

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The above two diagrams show detailed picture of SPLIL’s Apparel Manufacturing and Supply Chain. The manufacturer supply chain starts when yarn is in-house and ends when garment is produced and is ready for dispatch. The entire process is divided into two segments i.e. the process and the production. The process involves yarn inspection, knitting, dyeing or washing and finishing. In the process, the yarn is converted to fabric then it is either dyed or washed and finally finished. The production involves fabric cutting, stitching, and garment being finished and finally dispatched. 2.2.2) SPL: Departments Functions and Operations Company mainly deals in two segments of the apparel supply chain i.e. one manufacturing of fabric and other manufacturing of garment. These two segments are two different processes but are very much linked in the supply chain. The Company has different departments each having specified functions and responsibilities. Description of each department will follow in respect to how they occur in supply chain:  Yarn Department

Yarn (thread) is one of the most important raw-materials for the garment manufacturing. Company purchases yarn from other spinning mills across the country and also sometimes from other countries such as China and Italy. Yarn department is responsible for placing order of yarn to the mills. Their responsibility is to make sure yarn is ordered from right supplier, delivered in right time with desired quality and maintain stock listing of yarn. Yarn department is also responsible for checking the quality i.e. strength, colour and quantity of the yarn delivered. The decision regarding

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 Washing and Dyeing Department The department is responsible for two different stages in garment manufacturing. department is responsible for colouration of fabric and for dyed (coloured) fabric.  Knitting Department Knitting department is responsible for producing knitted fabric i. Knitting department receives orders from PPC stating article or style number and quantity of fabric required. quality and strength is decided by PPC i. two types of machines are normally used i. fabric from yarn. PPC places the order one month in advance. department is responsible for washing.  Finishing Department The department is responsible for finishing of the fabric with a proper procedure so that it is ready for garment production. circular knitting machine and flat knitting machine.the yarn quantity. The department makes the production plan for the dyeing and the washing machine based on order from the PPC and also sends request to knitting department for the dispatch of the fabric. planning and control department. production. For grey (not coloured) fabric. The knitting department makes the production planning for all knitting machines based on request from PPC and also calculates and orders required yarn from the yarn department.e. The department receives order from the PPC stating article and quantity required. For fabric production. The process of dyeing is time consuming and as different colour checks are required. Whether the fabric is dyed or washed. it follows the same process in the finishing department. Once the fabric is washed or 24 | P a g e .e.e. Planning is usually done for every week. Planning is done on weekly basis.

Once fabric is cut different parts of the same garment are bundled together. proper set of tools such as CAD and others are used in the process. The process takes place in the assembly line system. PPC decides on the 25 | P a g e . it needs to be tumbled in tumbler (sort of big washing machine) responsible for removing water and maintain the fabric width and shrinkage. This also works on weekly basis. The finishing departments receive orders from PPC again stating the article or style number and the quantity. This department is mainly responsible for cutting and avoiding wastage.dyed. Assembly line method is used for large production. The department makes production plan for all cutting stations based on article or style requested. The department sends the fabric to the mentioned cutting section. The PPC by using CAD and other tools issues article average with a draft or diagram of how different patterns should be placed on to the layer. The cutting department based on their experience and expertise either accepts the proposed average or sometimes gives a better average by few percent. The assembly line system is the set of many different stitching machines each for a specific purpose.  Cutting Department The department is responsible for cutting of the fabric into different parts of the garment. To ensure minimum wastage.  Stitching Department The department is responsible for stitching different parts of garment together. After which fabric is dried in a Stenter (dryer) and packed in layer and is ready for garment production. These machines are arranged in an orderly fashion depending on how different parts of garment should be attached.

Once all cartons are packed and labelled. The PPC sends production plan to different departments on weekly basis and daily for any amendments. As the garment is already finished. The planning is done weekly. packed and dispatched. PPC being in the centre of all departments also controls their functionality. stitching test etc. The stitching process is the most time consuming and labour intensive process in the entire garment production. The top management is in continuous contact with PPC. The PPC department gives the details of the PO to be finished. After which it is steam pressed.article or style to be produced with quantity. 26 | P a g e . With order quantity and dispatch date. it requires a series of quality checks. packed into garment bags and finally. The PPC keeps check on different departments by requesting planning and production reports for each day. all the departments. The garment goes through the quality checks like colour test. put into the cartons. it does the planning for product cycle. external quality check takes place and goods are shipped.  Finishing and Packaging Department This is final stage before the garment is ready to be shipped. PPC only receives orders from the Management. time line in accordance with each article.e.  Production Planning and Control (PPC) Department The department is responsible for making plans for the entire organization i. washing test. labelled. The stitching department makes necessary production planning i.e.

Figure 4: The PPC link with other departments TOP MANAGEMENT Yarn Department Knitting Department Finishing. Packing & Dispatch Production Planning & Control Stitching Department Dyeing & Washing Department Merchandising Department Cutting Department Finance & Accounting Department 27 | P a g e .

SPLIL employs a team of designers who design and develop the products as per the requirements of the customers. The design team regularly interacts with the customers which helps it to keep pace with 28 | P a g e . The department also takes care of necessary sampling such as proto. 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 Company’s ability to keep abreast of the dynamic fashion trends enables it to showcase its capabilities and understanding the buyers’ requirements. These fairs determine the latest trends in yarn / fabric and colours for the following season. tracking the changing fashion trends across different geographies for various end customers is critical for success.2) Marketing  Design Designing is an integral part of the marketing process. On one hand.3. size set and final which is necessary prior to production. (Plan Outline for Order Completion – See Annexure 3) 2.3) To understand the role of Merchandisers in SPL industries ltd. Being an export oriented apparel manufacturer. 2. The Company has a well equipped design studio.2. EXPOFIL and PREMIERE VISION. 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.3. They regularly visit International fairs like PITTI FILATI.1) Merchandising Department The department acts as a liaison between the buyer and manufacturing division. On the other hand.

the Company presents to them the entire product range. the Company has opened a Product Development and Sales office at US.     Spring Summer Fall/Autumn Holiday/Winter 2. Besides. The Apparel trade has four basic seasons. The Company’s experienced marketing team has been able to devise different strategies to suit the needs of both existing & new buyers. For the new buyers. trade fair meetings Walk-in customers. based on the understanding of their product range and brand identity / customer identity. The Company receives orders from customers by:    Growth in business from existing customers New customers developed through cold calls. the Company’s prime focus is to expand the product base and enhance volumes. 29 | P a g e . For the existing buyers. the Company strives to be a preferred partner to the buyers. By leveraging the long standing relationships with the buyers. This gives them a good idea of areas of the Company’s expertise and capabilities.their expectations.3) Merchandising The Company’s marketing team endeavours to enhance its share of the business with existing customers as well as expand the customer base.3.

Quality and ability to deliver the required products on time and competitive pricing enables to enhance share with customers. Modifications are also suggested on apparel design or engineering. with both the Company and buyer working together to meet a common objective.Sometimes the buyers come to SPLIL with their thoughts on designs. The price setting process thus becomes a collaborative effort with Company’s customers instead of just a negotiation process. finalizes the design. The merchandising teams are to service the requirements of different customers. The costing exercise is done concurrently at this stage. or fabric to try and bring the cost to the buyer within their required range. SPLIL’s designers along with the sampling department provide the client with prototypes. Based on this. SPLIL’s manufacturing scale and efficiency and global sourcing ability enables SPLIL to compete with international vendors effectively. where competition has already been open without any quota related barriers. likely suppliers and costs. accessories as well as the conversion efforts. the costing sheet is prepared. In case where they come to SPLIL with a predetermined design requirement. where they offer their suggestion on modifications. company can work out an 30 | P a g e . On receipt of the enquiry. or to reduce costs while retaining the existing design. Once the buyer finalizes a particular style it is translated into samples as quickly as possible because the entire season’s business depends on timely delivery of samples. which undergo various alterations till the client. Therefore. whenever a prospective buyer places his requirement with the company. they also try to add value by suggesting modifications to enhance functionalities or appeal. the merchandiser coordinates with PPC to get an estimate of the raw material consumption. This is proven by the growth of the Company in non-quota categories.

2. documentation department issues an invoice.1) Pre-Shipment Procedure  On receiving the requisition & purchase order from merchant. 2. commercial invoice & custom invoice. along with design. It is essential that a person engaged in international trade be aware of the various procedures involved. GSP certificate is prepared if the consignment is exported to EU or countries mentioned in the GSP list. Two invoices are prepared i. if required.optimal price-quality combination for him through permutation and combination of quality & source of raw materials.    Buying house inspects the goods & issues an inspection certificate. Following documents are given to Customs for their reference:  Custom Invoice  Packing list  IEC certificate  Purchase Order or L/C.   Packing list is prepared which details the goods being shipped.e. 31 | P a g e . Failure to comply with documentary requirement may lead to financial loss.4) To understand the Export Procedure in SPL Industries Ltd. Commercial invoice is prepared for the buyer & Custom invoice is prepared for the Custom authorities of both the countries. Certificate of origin is also issued and attached. if required. The business of exports is heavily document-oriented & one must get acquainted with the entire procedure.4.

customs will issue clearance certificate. Custom annexure   On receipt of above documents.  Buyer collects the consignment from the destination port by showing the following documents: o Invoice o Packing List o Bill of lading/ FCR/ Airway Bill  On shipment of goods. 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. After custom clearance a set of documents with custom clearance receipt are sent along with the consignment to the forwarder.  Following documents are sent to buying house for their reference. exporter will send the documents to the importer’s bank. 32 | P a g e . Forwarder books the shipment & as per the size of the cartons calculates CBM & decides which container to be used. Buying house will send a set of these documents to the buyer.

 Within 60 days from Bill of Lading or Airway Bill date.  Within 30 days from Bill of Lading or Airway Bill date. As the buyer’s bank receive the documents it will confirm with the buyer for release of payment.4. On confirmation. it will make the payment in the foreign currency. 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:  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.  After shipment. Wire Transfer – (Advance payment.2. exporter sends the documents to the buyer’s bank for payment.2) Post-Shipment Procedure  A foreign buyer will make the payment in two ways:  TT ( telegraphic transfer) i. The transaction will be Bank to Bank.e.  Within 90 days from Bill of Lading or Airway Bill date. 33 | P a g e .

(See Annexure 4) b. One of the most significant variations between the two arises on account of the much more intensive documentation work. quantity. value agreed per unit & total value to be paid. as against the respective purchase order or invoice. the payment will be made as per the terms agreed by the exporter (Advance payment.  If the payment is through wire transfer. Invoice: It is prepared by an exporter & sent to the importer for necessary acceptance. in Indian rupees by converting the foreign currency as per the current bank rate. Invoice are of 3 types: a. he will request for an invoice. Normally. The domestic branch will credit the exporter’s account. The documents mentioned in the pre & post shipment procedure are discussed below: 1. 34 | P a g e . it indicates description of goods. Consular invoice: It is certification by a consul or Government official covering an international shipment of goods. When the buyer is ready to purchase the goods. & several other documents are then prepared by deriving information from the invoice. 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.3) Export Documents: An export trade transaction distinguishes itself from a domestic trade transaction in more than one way. It ensures that exporter’s trade papers are in order & the goods being shipped do not violate any law or trade restrictions. the invoice is prepared first. as per the clause – 50% advance & remaining 50% on shipment).4. 2.

(See Annexure 6) 3. GSP: It is Generalized System of Preference. It is required by some purchasers and countries in order to attest to the specifications of the goods shipped. Customs invoice: It is an invoice made on specified format for the Custom officials to determine the value etc. The certificate of origin states that the goods exported are originally manufactured in the country whose name is mentioned in the certificate. it itemizes the material in each individual package and indicates the type of package. Certificate of origin is required when: . Certificate of Inspection: – It is a type of document describing the condition of goods and confirming that they have been inspected. Considerably more detailed and informative than a standard domestic packing list. Certificate of Origin: Importers in several countries require a certificate of origin without which clearance to import is refused. This is usually performed by a third party and often obtained from independent testing organizations. 5.  The goods produced in a particular country are banned for import in the foreign market. (See Annexure 5) 2. Packing list: It shows the details of goods contained in each parcel / shipment. It is mainly 35 | P a g e . (See Annexure 7) 4. crate.c. It certifies that the goods being exported have originated/ been manufactured in a particular country.(See Annexure 8)  The goods produced in a particular country are subject to’ preferential tariff rates in the foreign market at the time importation. Both commercial stationers and freight forwarders carry packing list forms. such as a box. drum or carton. as prescribed by the authorities of the importing country.

10. is freely transferable by endorsement and delivery. (See Annexure 9) 6. After making payment of all port dues. IEC Certificate: It is an Import-Export Code Certificate issued by DGFT. is a receipt issued by an airline for the carriage of goods. provided the freight and other charges as specified in the bill have been duly paid. Ministry of Commerce. if available. and undertaking to deliver the goods in the like order and condition as received. (See Annexure 1) 7. so each airline has its own airway bill. The mate's receipt is first handed over to the Port Trust Authorities. Wearing Apparel Sheet: It is like a check list which gives the detail regarding the content & design of the garment packed. It is also a document of title to the goods and as such. It is applicable in countries forming European Union. No exports or imports will be effected without the IEC code. also called an air consignment note. to the consignee or his order. The mate's receipt is a prima facie evidence that goods are loaded in the vessel. 9. 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. (See Annexure 10) 8. Airway Bill: An airway bill.useful for taking advantage of preferential duty concession. It is mandatory for every exporter. 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. As each shipping company has its own bill of lading. the exporter or his 36 | P a g e . Government of India. It is a 10 digit code number. Airway Bill or Air Consignment Note is not treated as a document of title and is not issued in negotiable form.

Letter of Credit: This method of payment has become the most popular form in recent times. Drawback copy. required by the customs authorities for granting permission for the shipment of goods. It must be handed over to the shipping company in order to get the bill of lading.e. 12. Bill of lading is prepared on the basis of the mate's receipt. Port trust copy. it is more secured as company to other methods of payment (other than advance payment). Shipping bill is normally prepared in five copies: (See Annexure 12)      Customs copy. Shipping Bill: Shipping bill is the main customs document. certified by the customs. The cargo is moved inside the dock area only after the shipping bill is duly stamped. 37 | P a g e . i. Export promotion copy. Exporter's copy. (See Annexure 11) 11.agent collects the mate's receipt from the Port Trust Authorities. (See Annexure 13) 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”. The mate's receipt is freely transferable.

This is only an illustrative list.Contents of a Letter Of Credit A letter of credit is an important instrument in realizing the payment against exports. Let us see shat a letter of credit should contain in the interest of the exporter. FOB etc. quantity.      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 38 | P a g e . So. unit rate. terms of shipment like CIF.           Name and address of the bank establishing the letter of credit 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. 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.

the bank will negotiates the bill. the importer will be asked to make the required amendments to the LC. ↓ The advising bank. ↓ The exporter’s bank (negotiation bank) verifies all the documents with the LC. forwards the same to the exporter. Delivery against Acceptance or Delivery against Payment). ↓ In case the LC is as required. ↓ The exporter scrutinizes the LC to ensure that it confirms to the terms of contract. ↓ The opening bank will forward the original LC to the advising bank. ↓ The importer’s bank opens the LC as per the application. 39 | P a g e . The importer then accepts/pays the bill (This would depend on the terms. ↓ The importer’s bank checks the documents and informs the importer.Steps in an Import Transaction with Letter of Credit The importer includes a purchase contract for the buying of certain goods. the amount. the exporter will prepare export documents. including Bills of Exchange. ↓ The LC issuing bank reimburses the negotiating bank. ↓ The exporter will effect the shipment of goods. ↓ In case any terms are not as agreed. ↓ If the documents are in the conformity with the terms of LC and all other conditions are satisfied. ↓ The exporter receives the payment in his bank account. after satisfying itself about the authenticity of the credit. ↓ After the shipment is effected. the exporter proceeds to make arrangements for the goods. On acceptance/ payment. ↓ The importer requests this bank to open a LC in favor of his supplier. ↓ The LC Opening bank (Importer’s Bank) receives the bill and documents from the exporter’s bank. if the documents are found in order. the importer gets the shipping documents covering the goods purchased by him.

EXW applies to goods available only at the seller’s premises. It defines the trade contract responsibilities and liabilities between buyer and seller. the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree. The scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods.4. More Clarification on Incoterms EXW (At the named place) Ex Works: Ex means from. Works means factory. The purpose of Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. CFR & CIF. mill or warehouse. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Thus. Incoterms deal with the number of identified obligations imposed on the parties and the distribution of risk between the parties. Once they have agreed on a commercial terms like FOB. France.4) Terms of Shipments – Incoterms The INCOTERMS (International Commercial Terms) is a universally recognized set of definition of international trade terms. It is invaluable and a cost-saving tool. they can sell and buy at FOB without discussing who will be responsible for the freight. such as FOB. which are the seller’s premises. cargo insurance and other costs and risks. Buyer is responsible for loading the goods on truck or container at the seller’s premises and for the 40 | P a g e .2. developed by the International Chamber of Commerce (ICC) in Paris.

or a named railroad station or a named cargo terminal or into the custody of the carrier. Buyer is responsible for the main carriage/freight. many importers and exporters still use the term FOB in the air shipment. which is usually the sellers premises. FCA (At the named point of departure) Free Carrier: The delivery of goods on truck. it is not uncommon that the seller loads the goods on truck or container at the seller’s premises without charging loading fee. and the export-trader resells on other trade terms to the foreign buyers. Buyer is responsible for the loading fee. for example FAS New York 41 | P a g e . Some manufacturers may use the term Ex Factory. The point (depot) at origin may or may not be a customs clearance centre. FAS (At the named port of origin) Free Alongside Ship: Goods are placed in the dock shed or at the side of the ship. within reach of its loading equipment so that they can be loaded aboard the ship. indicate the port of origin(loading)after the acronym FAS. In practice. The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer). which means the same as Ex Works. technically speaking. rail car or container at the specified point (depot) of departure. goods placed in the custody of an air carrier are considered as delivery on board the plane. In practice. cargo insurance.subsequent costs and risks. main carriage/freight. and other costs and risks In the export quotation. on the dock or lighter. In the air shipment. at seller’s expense. at seller’s expense. cargo insurance and other costs and risks.

FOB Origin means the buyer is responsible for the freight and other costs and risks. However. the term FOB is used for ocean freight only. Many buyers and sellers in Canada and the USA dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB destination. Under the rules of the INCOTERMS 1990. which are not part of the INCOTERMS (International Commercial Terms).and FAS Bremen. depending on the agreement between the buyer and seller. avoid using the shipping terms FOB Origin and FOB Destination. the term FOB has other applications. In the export quotation. in practice. In international trade. In North America. for example FOB Vancouver and FOB Shanghai. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyer’s premises which may include the import custom clearance and payment of import customs duties and taxes at the buyer’s country. many importers and exporters still use the term FOB in the air freight. 42 | P a g e . Buyer is responsible for the main carriage/freight. indicate the port of origin (loading) after the acronym FOB. The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels. cargo insurance and other costs and risks. FOB (At the named port of origin) Free on Board: The delivery of goods on the board the vessel at the named port of origin (Loading) at seller’s expense.

However. Insurance and Freight: The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller’s expense. In the export quotation. Under the rules of the INCOTERMS 1990. CIF (At named port of destination) Cost. Buyer assumes the cargo insurance. for example CIF Pusan and CIF Singapore. 43 | P a g e . indicate the port of destination (discharge) after the acronym CPT. The term CFR was formerly written as C&F. and other costs and risks. for example CPT Los Angeles and CPT Osaka. import custom clearance. Many importers and exporters worldwide still use the term C&F. many importers and exporters still use the term CIF in the air freight. CPT (At the named place of destination) Carriage Paid To: The delivery of goods to the named port of destination (discharge) at the seller’s expenses. Buyer is responsible for the import customs clearance and other costs and risks. in practice. the term CIFI is used for ocean freight only. payment of custom duties and taxes. indicate the port of destination (discharge) after the acronym CIF.CFR (At the named port of destination) Cost and Freight: The delivery of goods to the named port of destination (discharge) at the seller’s expenses. In the export quotation. Buyer is responsible for the cargo insurance and other costs and risks.

Buyer assumes the cargo insurance and other costs and risks. payment of custom duties and taxes. Seller is responsible for the importer customs clearance. Buyer assumes the importer customs clearance. and other costs and risks. payment of customs duties and taxes. Buyer assumes the unloading free. payment of customs duties and taxes. import customs clearance. and other costs and risks.CIP (At the named place of destination) Carriage and Insurance Paid To: The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller’s expense. DEQ (At the named port of destination Delivered Ex Quay: The delivery of goods to the Quay (the port) at the destination on the buyers expense. DES (At named port of destination) Delivered Ex Ship: The delivery of goods on board the vessel at the named port of destination (discharge) at sellers expense. payment of customs duties and taxes. at the buyers end. cargo insurance. Buyer is responsible for the import custom clearance. 44 | P a g e . and other costs and risks. DAF (At the names point at frontier) Delivered at Frontier: The delivery of goods at the specified point at the frontier on seller’s expense.

and the delivery of goods to the final point of destination.  Under the “F”-TERM (FCA.DDU (At the named point of destination) Delivered Duty Unpaid: The delivery of goods and the cargo insurance to the final point of destination. “E”-term. FAS. “C”-term & “D”-term: Incoterms 2000.  Under the “E”-TERM (EXW). 45 | P a g e . payment of customs duties and taxes. the seller is called upon to deliver the goods to a carrier appointed by the buyer. “F”-term. like its immediate predecessor. and payment of custom duties. the seller has to contract for carriage. CIF. groups the term in four categories denoted by the first letter in the threeletter abbreviation. which are often the project site or buyers premises at sellers expense. which is often the project site or buyers premise. The seller may opt not to insure the goods at his/her own risks. DDP (At the named point of destination) Delivered Duty Paid: The seller is responsible for most of the expenses which include the cargo insurance. but without assuming the risk of loss or damage to the goods or additional cost due to events occurring after shipment or discharge. and taxes at the buyers end. CPT. Buyer assumes the import customs clearance.  Under the “C”-TERM (CFR. It is the only one of that category. &FOB). import custom clearance. & CIP). the seller only makes the goods available to the buyer at the seller’s own premises. The seller may opt not to insure the goods at his/her own risk.

This layout helps the user to compare the party’s respective obligations under each Incoterms. Examples are Delivery. DDU & DDP). and Division of costs. All terms list the seller’s and buyer’s obligations. 46 | P a g e . DEQ. The respective obligations of both parties have been grouped under up to 10 headings where each heading on the seller’s side “mirrors” the equivalent position of the buyer. Under the “D”-TERM (DAF. the seller has to bear all costs and risks needed to bring the goods to the place of destination. Transfer of risks. DES.

 Malhotra. Chapter – 2. An Applied Orientation.gov. Naresh K.sebi. Pearson Prentice Hall. Part II. Justin & Aserkar. 2009. K. 2nd Edition. 2005. 2008-09. Marketing Research.Bibliography Reference Site http://www.pdf as retrieved on May 21. V. 2009 Reference book  Puri. pp. pp. Export Import Management. 2009 http://www. 71-340.in/dp/splfinal..htm as retrieved on June 10. JBA Publishers.. Fourth Edition. 47 | P a g e . Exporters’ Guidelines. A Basic Book on How to Export as per Govt. Rajiv. 17-29.spllimited.com/index. Policy & Procedures.  Paul. 2nd Edition. Oxford University Press.

Jagmohan Chhibber Export Manager.Annexure Interview Questions Mr. SPL Industries Ltd        How an export order is processed? What role the different departments play for the completion of the export order? What role does merchandising department play in an Apparel export house? What are the different documents prepared & used for the export? How important are these documents? What are the incoterms? How are they important? What is a Letter of credit? What is its significance? 48 | P a g e .

Annexure 1 49 | P a g e .

Annexure 2 50 | P a g e .

Annexure 3 51 | P a g e .

Annexure 4 52 | P a g e .

Annexure 5 53 | P a g e .

Annexure 6 54 | P a g e .

Annexure 7 55 | P a g e .

Annexure 8 56 | P a g e .

Annexure 9 57 | P a g e .

Annexure 10 58 | P a g e .

Annexure 11 59 | P a g e .

Annexure 12 60 | P a g e .

Annexure 13 61 | P a g e .

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