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Apparel Industry Encounters with Truth
By :   Anjuli Gopalakrishna 
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Without deviating further, lets get back to our original point-How India will emerge as competitive in the new regime based on using indigenous fabrics?? In the light of above, the only way is that fabric manufacturers in India need to rise up to the need of the hour, and gear up to international market conditions. They will end up losing a lot of business if they are unable to offer competitive prices and equally good or better fabric quality than their Chinese brethren. They will need to stick to delivery commitments in a very professional manner.


Maybe the best way would be to take the middle path-an arrangement in b/w the nominated fabric sourcing and true FOB fabric sourcing. The idea is this, fabric suppliers should aggressively market their product to international labels, speed up the development turn around times, and if any of their fabrics are selected by buyers, then they get in touch with the garment maker and supply the fabric on FOB terms I/O going for nomination from buyer. This way all parties concerned will be happy. Garment maker is able to negotiate the fabric price on their own terms, fabric suppliers is assured of business, since already fabric quality has been selected by buyer, and buyer is happy too, as he gets the required quality of fabric and garment factory taking responsibility for timely delivery.


Speed is crucial!!


In the fast paced and highly competitive international retailing scenario, most European/ American buyers are on a look out for suppliers who can do quick turn around. Buyers want to take a read on the fashion trends and quickly supply the trendy/ hot selling merchandise, ride on the crest while it lasts and make their bucks. Nobody wants to make their purchases too much in advance and then run the risk of sitting with unsold merchandise, because in b/w the fashion trends changed!!


So the critical factor for most Indian suppliers to come out winners in the new global apparel trade is to respond to this need of 'quick response' and do it quickly, before its too late, and someone else moves the cheese!! Quite often a classic incident is heard in the garment circles, which is the best illustrator of the speed factor. Here goes. A certain American bra label sent out specific elastic to be sourced to two different suppliers. One guy was based in China, and the other guy based in Sri Lanka; here is the recount of buyer's experience verbatim ' it took Sri Lankan supplier two weeks to get back to us-only to tell us that they are still sourcing. It took them another two weeks to actually send their elastic quality for approval. During which time the other supplier in China, not only submitted the elastic for approval, got an approval, took the order and even shipped out the entire bra order!!!


Sounds a bit exaggerated, but nevertheless, illustrates a very imp point. Speed is crucial.


Speed in responding to price quotes/ fabric submits/ color approval submits-the entire gamut that goes at the prototype development stage. If you talk to a regular buying office worker, you will realize that our Indian suppliers are still far away from responding quickly. On an average a supplier takes minimum 5 days to revert on costing and that too after being chased for it. They still go through three-four rounds of hard negotiations before settling at agreeable prices! Now this is funny because, garment industry is not a microchip kind of manufacturing industry. What it takes to make a men's shirt will not vary too much from season to season, and year to year. Still factories will start out be quoting the highest possible prices, as if the buyers don't keep records of what they paid for similar styles last season. Expect to be haggled to death before coming down to reasonable prices!! This kind of mentality may have worked in the past, but not any longer. No one is willing to spend too much time on negotiations and the best bidder gets the deal in one shot.


This type of thinking holds true for Bangladesh factories as well. Coming to countries like Sri Lanka/ Bangladesh etc. So what's in store for them in the post-quota world? Many experts feel that they are in for trouble, primarily because of their dependence on imports for procuring raw materials. There is minimal or no indigenous supply of trims/ fabrics in these countries. This adds to the cost plus to the lead times that these countries have to offer. While Sri Lanka can offer better lead times, as compared to Bangladesh, their costs are still higher in terms of factory overheads/ labor cost.

 

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Published On Monday, June 29, 2009
 
 
 

 
 
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