Sourcing Raw Materials: Woven Fabrics

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Porter Five Forces Model Analysis
 Porter Five Forces Model Analysis

• Industry Rivalry:
• No direct competition among the units because of perfect
competition
• a large numbers of sellers available to fulfill the requirement of
large number of buyers
• the competition is only base on the prices offer by the
manufacturers
• it’s the trend of the market that if unit is delivering the order on
time and the buyers is satisfied then they don’t move to other
units
• Bangladesh is facing very tough competition with India, China
and Vietnam
 Porter Five Forces Model Analysis

• Bargaining Power of Buyers:

• Bargaining power of buyer is high
• Because of perfect competition buyers can easily switch to
other manufacturers
• Buyers going to be more choosier and have option for
negotiation with lower price or improve product features or
quality.
• Buyers know the complete process and cost so have more
bargaining powers.
 Porter Five Forces Model Analysis

• Bargaining Power of Suppliers:

• In the market large number of suppliers for the same items, so
more bargaining power.
• The raw material for the manufacturing is not unique so more
control on suppliers.
• Usually the manufacturers purchase high volume of raw
material so they have more bargaining power.
• Switching cost is not much high so suppliers always try to
hold the customers.
 Porter Five Forces Model Analysis

• Threat of New Entrants:

• Large numbers of buyers are available in the market so new
entrants have no effect on current business.
• Usually exporters or buying house are much loyal with their
existing manufacturers so for new entrants it’s not easy task to
create that locality. So existing manufacturers enjoys their
relations with exporters.
• Threats from Substitutes:
• In this business there is no substitute is available.
 Key success factors

• Skilled Labor
• Cheap Labor
• Suppliers
• ISO Certification
• Latest Machinery
• Qualified Management
• Implication of Information Technology
• Infrastructures
 Woven Fabric Types

Buckram Georgette
Cambric Kashmir Silk
Casement Khadi
Cheese Cloth Lawn
Chiffon Mulmul
Chintz Muslin
Corduroy Organdy
Crepe Poplin
Denim Sheeting
Drill Taffeta
Flannel Tissue
Gabardine Velvet
 Types of sourcing
Type fabric sourcing
Local manufacturer
Traditional export
International sourcing
Global sourcing
Off-shoring
Global manufacturing
Description
Fabric is manufactured locally, with local
infrastructure.
Local fabric is exported to garment
manufacturing countries.
Fabric is made locally, but raw i.e. yarn or
fibre is sourced from other country.
Fabrics are made with parts sourced from
abroad as part of global sourcing strategy.
Raw material is exported first i.e. yarn or
fibre, then fabric is reimported to meet
the demand
Fabric is manufactured in other country.
 Fabric Sourcing Procedure of East
West Garments Ltd. For export orders
• Research for fabric suppliers
• Send fabric specification
• Price negotiation and payment terms
• Lap-dip approval
• Raising fabric demand note
• Raise PO for bulk order
• Received fabric delivery
• Quality and quantity checking
• Fabric approval for bulk production
• Payment is sent to the fabric supplier
 Fabric Sourcing Department

Some important point that is followed by fabric sourcing

department:
• Before placing an order, the sourcing department analyses
all the vendors and selects the best one.
• Based on the lead times for procurement of fabrics, it is
decided whether it is feasible to complete the order on
time or not.
• According to PCD, 40% fabric should be in house.
• The average lead time for fabric to be in house is 30 – 60
days.
Process Flowchart of Fabric Store and Inspection Department

Buyer specifies fabric quality and Issue to cutting

specifications from location when
required and
update in system
Approval of quality through Lap dip, Strike
offs or Bit Loom

If fabric is
approved then
document it in
Order the fabric
system in correct Re-inspection for
location all re-processed
fabric as per
above process
Start receiving fabric in lots

Fabric uploaded from the container

Issue to cutting
Rejected fabric
from location
returned to
when required
supplier for re-
and update in
Fabric put on the receiving location process
system
and updates the system

If fabric is
Fabric moved to the inspection table
If fabric is rejected then
 Flowchart of the Trims & Accessory Store

Requirement sent by the merchandiser

is entered in Microsoft dynamics &
order is placed.

Material received from supplier

Physical receipt/document check/gate Taking out materials as mentioned on challans

entry checking quantity / Items as per challans and
packing

Physical Movement of the material to

QC from Gate and System updating

Physical check of the quality and Issue challans raised on request to order
quantity preparation for approval located unit / Individual requirement
Send for approval to merchant and for
lab test

Request for dispatch comes from various sources

Reject/Pass material located in
designated place  Production Merchant

 Production Unit

 Sampling

 Miscellaneous
 Factors affecting sourcing of fabric and trims:

• Lead time:
• Logistics:
– Time required for transportation
– 2. Infrastructure for logistics
– 3. Cost of logistics.
• Quality parameters:
 Sourcing costs:

• Labour wages
• Manufacturing cost
• Cost of logistics/transportation
• Incoterm negotiated(for international
sourcing)
• Minimum Order Quantity (MOQ):
 Types of supplier:
• Non-nominated supplier:
• Advantages
• 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.
 Types of supplier:
• Non-nominated supplier:
• Disadvantages
• 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.
 Ordering specifications-Fabrics
• Fabric design (desk-loom)
• Fabric swatch(if provided by buyer)
• Lab-dip/colour standard
• GSM (Gauge in case of knitted)
• Yarn count
• Cuttable fabric width
• EPI/PPI
• Fabric finish
• Requirements of dyes and finishing chemicals
• Unit of measurement i.e. meter/ yard for woven and KG for knitted
• Order quantity
• Shrinkage tolerance
• Fastness properties
 Fabrics: we Sourced
Specifications:
• Dark blue 10oz stretch
denim jeans fabric for
pants
• Composition 75% cotton
23% polyester 2%
spandex
• Yarn count 16*300d/40d
• Weight 10 oz
• Width 140 cm
• Technics Woven
 Fabrics: we Sourced
Specifications:
• Yarn Dyed Polyester
Cotton Stripes Shirt
Fabric
Component:
Poly/cotton 65/35
• Yarn counts: 45's
• Construction: plain
• Width:58/59"
• Weight: 100GSM
 Ordering specifications-Button
• Raw material i.e. wood, nylon etc.
• Colour (sample provided by buyer)
• Unit of measurement I.e. linge
• Order quantity
• Quality parameters
• Button strength
• Colour fastness
• Order quantity
Approximate Lead time requirement for domestic and overseas
sourcing

Article Domestic sourcing Overseas sourcing

Fabric (solid dyed) 30 days 45 days

Fabric (y/d dyed) 45-60 days 55-70 days

Fabric (fibre dyed) 75-90 days 90-120 days

Buttons 10-15 days 20-25 days

Zipper 7-10 days 10-15 days

Thread 7-15 days –

Label 7-15 days 20-25 days

Poly bag 7-10 days –

Cartons 7-10 days –

Any Questions???

Thank you for Listening