Senior Vice President - Head of Global Supply Esprit
Like most brands, Esprit is watching Myanmar and Ethiopia closely
Germany based fashion brand Esprit has a number of tips to offer when it comes to sourcing. In an interview with Fibre2Fashion.com, Luis Gonzaga, Senior Vice President – Head of Global Supply at Esprit details out the sourcing activities in the company and other related information.
What are the top five points that a vendor or manufacturer must keep in mind to ensure that he is eligible to become the sourcing vendor for a brand?
To become eligible, a supplier should cover the following aspects: Full compliance with all social requirements; High level of quality measured in two different aspects; AQL (Average Quality Level) – manufacture quality level; RSL (Restrictive Substances List) – control of restricted substances; Participate in the key sustainability initiatives at Esprit; Ensure all the commercial requirements same as an adequate value for money and capacity levels; Approach with a fashion input.
Most of the aspects listed above are made part of ‘Esprit Minimum Requirements’. Esprit has strict and solid requirements which represent standards of our social compliance, quality and sustainability areas, ensuring full compliance and sometimes going beyond the legal requirements.
Going beyond givens like quality, what are the three critical attributes that a consignment must not falter on?
Beyond quality, vendors must meet our expectations regarding sustainability and social compliance. To clearly define these expectations, Esprit participates in organisations like Zero Discharge, Better Cotton Initiative, Responsible Down Standard, Canopy. These groups, as well as some others in which Esprit is active, cover both legal requirements and requirements that Esprit would seek to fulfil beyond legal minimums. In addition to legal requirements, which include RSLs of all markets where we sell products including REACH standards, we also have our own quality standards. The Esprit Material Quality Requirements, which include different criteria like colour fastness to washing, light, pilling, twisting and shrinkage. Esprit standards also prohibit things like the use of angora wool (live, plucked down) and sand blasting of denim.
To ensure high standards, Esprit co-operates with certified and selected laboratories to guarantee that our requirements are consistently met. Esprit seeks to assure that making our products meet local law and international (ILO) standards. We embed our work in this area within the context of a number of multi-stakeholder organisations, including the BSCI, ILO Better Work and the Bangladesh Accord on Building and Fire Safety. To guarantee on-time performance, Esprit works in close contact with vendors, supported by vigorous capacity planning, to avoid production glitches that could cause delays. Meeting such a wide range of criteria requires working closely with partners on an on-going basis. The relationships that support this work do not just happen – we work hard to build them.
What are the top five points – from factory floor to final packaging and dispatch – that a vendor must not falter on?
Visibility, security - social compliance or sustainability, technical capabilities, quality - AQL or RSL, commitment – on-time performance
We from Esprit always need to know where our productions are going to take place, to make sure that the circumstances at the point of fabrication come along to our requirements. We’re especially concerned that suppliers pay attention to security aspects (relating to employees and facility), observe all legal requirements and follow our sustainability norms to protect the environment. Technical aspects must also be considered, meaning that the quality of yarn or fabric coming from the mill has to correspond to confirmed prototype, and that the technical execution and production must be the same as the confirmed prototype. Quality and testing standards need to meet Esprit’s expectations. All garments must pass quality inspection and legally required laboratory tests, as well as our brand standards (for example: colour fastness, pilling, forbidden substances, measurements, etc) and finishing processes like washing, ironing and hang tags or labelling requirements, etc. Another essential factor is the commitment of suppliers to fulfil all agreements and assure on time performance regarding production and delivery as required in the purchase order.
What is the ideal lead time that you look for in a minimum of 1000 pieces?
The production lead depends on many factors – same as the product class and specifications – like the order volume, availability of materials or capacity slot in the point of fabrication. The supplier structure has a huge influence on production lead times, as well. Whether the factory is vertical, the vendor size and other factors matter a great deal. Other key considerations are season garment specifications, and the availability of fabrics, all of which could extend the lead time as well. Considering all of these aspects, we can determine under assumption of simple requirements not extraordinary complex manufacture or finishing techniques and availability of materials and production capacity:
- Circular Knit - Short leadtime – easy to supply in short leadtime – 30 to 40 days
- Flat Knit - Long leadtime – easy to supply in short leadtime – 50 to 60 days
- Denim - Long leadtime – easy difficulty to supply in short leadtime – 50 to 60 days
- Woven - Long leadtime – mid difficulty to supply in short leadtime – 50 to 60 days
What is the ideal payment terms and cycle that you look at when deciding on a vendor?
Whether we talk about two parties, ideal should fit for two of them. Obviously suppliers will require availability of financial resources at lowest difficulty, the sooner the better. L/C at sight would be, most probable, the preferable payment terms for them. The buying part will require, most of all, security in the payment process and minimise the impact for company cash flow. TT/90 days after delivery, is most probably the right one in this case. We consider that the vendor base is key in this regards. To work in an environment of trust and confidence, we found Open Account as the right compromise in the parties, for every time it is possible.