SOURCING OF

FASHION
INDUSTRY
EXPORT MERCHANDISING
ASSIGNMENT II

Submitted To
MS. MUKHTY S.
Submitted By
CHAITALI DEBNATH
MFM, SEM-I
NIFT KANNUR
2022
What is Sourcing?
Sourcing is defined as the process of determining how and from where
manufactured goods or components will be procured. Sourcing is an
important part of the supply chain. It is directly related to and a crucial aspect
of the responsibility of fashion merchandiser.
"The main objective of sourcing is to getting the right product for the customer
at right place, right price and the right time."

Fabric and trims must be purchased from outside sources in garment export
houses. Arranging the most affordable supplier of raw materials,
manufactured goods, or production unit at the desired quality and service
level is exactly what sourcing entails. Lead times are vital when it is sourcing
and ordering the fabrics or trims for production.

A supplier can ask for two weeks lead time to nine months also depending on
the material required. Trims are all the materials other than the piece goods
that are required to make up a garment. As soon as the fabric is inhouse , the
thread sourcing will start because the shade of the thread must match with
the fabric as per buyer’s requirements.

Types of Sourcing
Local Manufacturer: Fabric or trims are manufactured locally, with local
infrastructure.
Traditional Export Manufacturer: Local fabric is exported to garment
manufacturing countries.
International Sourcing : Fabric is made locally, but raw i.e. yarn or fibre is
sourced from other country.
Global Sourcing: Fabrics are made with parts sourced from abroad as part of
global sourcing strategy.
Off- Shore Sourcing: Raw material is exported first i.e. yarn or fibre to
manufacture the fabric, then fabric is reimported to meet the demand.
Global Manufacturing: Fabric is totally manufactured in other country & then
sourced.
 Sourcing Process

Role of Merchandiser

The sourcing and merchandising has the same goal to meet i.e. to get right
fabric/trims at right place on right time and with right price. As the production
merchandiser is the key person in whole order processing hence sourcing is
the integral part of merchandising activities.
The role of merchandiser in sourcing can be described as:

In small export house merchandiser bares the responsibility of sourcing

In large export houses the Sourcing Merchandiser coordinates Fashion
merchandiser to source the fabric and trims.
Merchandiser is responsible for calculate fabric and trim consumption per
garment and coordinate it with manager of sourcing department.
The
buyer must provide the necessary approvals for the fabric, such as lab
dips, desk looms, print strike-offs, dye lots, and thread runs, in a timely
manner.
The artwork and trim card must receive the buyer's approval, which is the
merchandiser's obligation.
It is the merchandiser's duty to keep the appropriate buffer in the Time
and action calendar.
Off -Shore Sourcing V/S Domestic Sourcing

Off Shore sourcing is the practice of hiring a vendor to do the work offshore,
usually to lower costs and take advantage of the vendor's expertise,
economies of scale, and large and scalable labor pool.

Domestic sourcing is the activity of contracting for goods or services that are
delivered or manufactured within the buyer's home country borders.

In off shore sourcing, full package is always in larger amount because of the
cost of transportation & in between processing over the countries.

In Domestic sourcing, small quantity order, in between changing & visiting the
factory is possible.

In case of Off shore sourcing if fabric & trims get stock out in between the
manufacturing, reordering or supplying is not possible instantly. On the other
hand that is easier in Domestic sourcing. Maintaining quality or control over
quality is also tough in Off shore sourcing because you can't do anything after
the product is delivered. In domestic sourcing you can ask for the quality if it is
not meeting your standard.

When different type of machinery as per requirement & in better quality are
not available locally , then instead of Domestic sourcing, off shore sourcing is
the best option.

In domestic sourcing the delivery time & speed can be altered as per the
requirement , and the cost could be bargained sometimes.
In off shore sourcing the delivery time & speed couldn't be changed once
fixed & the delivery starts after 50% or sometimes 100% deposit depending on
the company.
Factors affecting sourcing of fabric and trims

Lead time:
Fabric and trim sourcing is very time consuming process which includes desk
loom and lab-dip approvals, trim and art work approval, FPT approval. The
fabric sourcing itself will take lead time of 30-60 days depending upon type of
fabric for yarn dyed fabric it takes approx.45 day, for piece dyed fabric it take
approx. 30 days and for fibre dyed fabric it takes approx.55-60 working days.
Merchandiser needs to decide the supplier of the fabric supplier on the basis of
type of fabric and time remains in hand to complete the export order. If fabric
sourced from other country, then time required for transportation needs to keep
in mind.
Trim sourcing is another important factor that needs to take care. For trims
generally it takes 30 days to get in-house. That is also depends upon type of
trims and from where trims are getting procured.

Logistics:
Logistics is one of the main factors which affects the fabric sourcing
drastically. There are several aspects those are 1. Time required for
transportation 2. Infrastructure for logistics 3. Cost of logistics. Merchandiser
needs to keep in mind these factors while placing the order for fabric or trims.
The time required for transportation is very important to achieve the accurate
lead time of fabric/trims procurement. Absence of adequate infrastructure will
lead to delay in fabric procurement. Cost of logistics will directly affect the cost
of garment; hence merchandiser should be well aware about these aspects of
logistics and then place the order for fabric and trims.

Quality parameters:
The demand for high-quality low-cost fabric/trims coupled with the need to
reduce costs to increase operating profits is driving more companies to
outsource manufacturing overseas. Though sourcing is an effective way to do
business but sometimes fabric and trims supplier cannot meet the quality
parameters, which will lead to trouble for apparel merchandiser to execute the
export order.
Sourcing costs:
The sourcing decisions are taken mainly on the basis of cost manufacturing.
But now a days garment exporters makes strategic bonding with fabric and
trims vendors. The buyers also makes bonding with fabric and trims
vendors, these are called nominated vendor. The sourcing cost depends
upon following factors
Labor wages
Manufacturing cost
Cost of logistics/transportation
Incoterm negotiated(for international sourcing)
When comparing the costs of manufacturing a fabric and trims offshore or
domestically, manufacturers must include all the hidden costs of added
processes and steps that go hand in hand with offshore production. The
cost of sourcing is optimized when fabric and garment manufacturing units
are under one roof or closer to each other. The freight chargers are
increased when there delay in manufacturing and material need to send
with air freight.

Minimum Order Quantity (MOQ):

This is the important factor that affects the sourcing. For sourcing of fabric
and trims there is always a MOQ for which directly affects the cost. Every
supplier requires a certain MOQ to produce the fabric and trim
economically; otherwise the cost of running the production is higher if
production is below MOQ. If garment exporter places the order of raw
material below MOQ then generally cost will be more for that. Hence
throughout the supply chain MOQ is maintained the in order to achieve the
appropriate cost of production.
Types of supplier:
In garment industry suppliers are appointed by export house or by buyer, for
the production of fabric and trims. As there are limitations of manufacturing of
fabric and trims for garment export houses, though some export houses has
in-house fabric production, it has become increasingly common in garment
industry to source the fabric and trim from others rather than employing a
large production capacity themselves. The main advantage of sourcing the
fabric and trim is the transfer of risk and enables the garment exporter to
concentrate on only garment production. However, another concerns have
been expressed about the prevalence of supplier because of a perception that
the exporter has less control over the skills and training of suppliers employees
and so there may be a negative impact on quality and health and safety on
site. There are two types of suppliers namely
Nominated supplier
Non nominated supplier
For both type of supplier lead time generally remains same irrespective of
MOQ, order quantity, quality parameters of the raw material. Transit lead time
will change with the location of the supplier i.e. domestic and overseas
supplier.

Nominated supplier:
Nominating the supplier is a common practice in garment industry, a
procedure that was initiated by buyers to achieve better control over their
supply chain, is now a very common practice followed in the garment export
industry and has many aspects to it. These days a buyer nominates suppliers
mainly for products like accessories, fabrics, packaging material and logistics
to gain better control over their supply chain, get consistent quality and on
time deliveries. The most important factor is the standardization of the
product as, by nominating suppliers, buyers intended to get raw materials
which is having consistent quality and with no defects or flaws. The second
important reason for nomination is on time deliveries as buyers were getting
delayed orders and most of the times agents/manufacturers blamed suppliers
of trims, accessories or fabrics for the delays.
Advantages of nominated supplier:
Time saving for garment manufacturer because they only have to deal
with one company to provide basic raw material.
Quality assurance of the raw materials is consistent and taken care by
buyer
Nominated supplier can be involved in product development since they
are already having good experience in this field.

Along with these advantages there are certain disadvantages for nomination
of suppliers.
Nominated Suppliers may become overconfident about their product
quality.
There may be a Monopoly of supplier in the market
Nomination may leads to unethical practices like corruption by agents
and traders
Loss of price competitiveness as suppliers sometimes overcharge

Non-nominated supplier:

Non nominated suppliers are the garment manufactures source of raw

material. Sometime buyers provide the specification of the raw materials and
ask garment manufacturer to source the same their own suppliers. Non
nominated supplier has their own advantages and dis advantages.
As they have challenge to sustain in business, hence non nominated supplier
try their best to follow the instructions given by buyer or garment
manufacturer
The cost is competitive to market, which makes them advantageous
Garment exporter may get chance to explore with the innovative
products offer by non-nominated supplier.
The disadvantages of these suppliers are
There may be flaws in quality of the raw material due to communication
gap between buyer and supplier.
To get involved these suppliers in product development process is difficult
task.
It will be difficult for buyer to control the social compliance and ethical
business practice norms on these suppliers effectively.