Unit 29 Task 2

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UNIT 29 JACQUELINE FARROW

TASK 2 THE FASHION BUYER

DISTRIBUTION & Sourcing

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THE ROLE OF THE FASHION BUYER IS TO BE RESPONSIBLE FOR SOURCING ALL NEW PRODUCTS FOR THE BUSINESS.

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he buyer will analyse the success of existing goods to ensure that the new products that are bought are going to be competitive and successful. The buyer will decide which styles will be the most successful and plan them so that they create a range.

They will also have to negotiate prices and time restraints with suppliers so that they can ensure a sufficient profit margin on the products they sell. A buyer needs to have good creativity and commercial skills to be able to do their job to a high standard. They will needs to be able to anticipate future trends whilst judging the cost and sales potential of a product. Most buyers tend are based in a head office in a capital city however some retailers have head offices based in other areas. For example Matalan is based in Skelmersdale in the North West. A buyer has to be organised, as they have to work on many different seasons at once to plan ahead. They must also plan ahead as the role includes a lot of travel and so when they get back from travel commitments they must also catch up on paperwork. Research and analysis is important within the buyer role, as they need to have the evidence available to back up their financial decisions. Their decisions will be based on consumer demand, market trends, store policy and financial budgets. Research can be done in a variety of ways. For example the buyer could attend trade shows to understand what designers are selling and they could also use WGSN to predict future trends. Many buyers will go cool hunting in New York, Paris or Milan to seek out key upcoming trends and habits from around the globe.

The definition of a supply chain is a sequence of processes involved in the production and distribution of a product or service. A supply chain will include every person or business that is involved in the completion of a finished product to be sold to a consumer. The supply chain will start with the natural resources and raw materials that are then produced into textiles and sent to manufacturers for distribution to the retailers and finally to the end customer. The supply chain can also be looked at as a cycle as consumer demand can result in more orders from the retailer to the wholesaler and back through to the manufacturers to the producers and suppliers. All of these components of a supply chain are not necessarily all in the same place or even in the same country. For example the Apple Mac supply chain starts with sourcing in China, Europe, United States and other Asian Countries, the components are all sent to China for assembly with warehouses in California and distribution globally and online.

Supply chains will differ on the brand, product or the service that they are producing. For example Zara’s supply chain will be influenced by their high fashion content at reasonable prices and so their strategy will revolve around speed and getting their product to the customer as quickly as possible. At Dell Direct, their customer experience is key and this will be driven by their responsiveness through configure-‐to-‐order. Dell’s unique supply chain looks for ways to take out time and costs to pass the savings onto their consumers. To achieve this, Dell gathers large volumes of information through a direct-‐sales model and shares it with its internal sales departments and external suppliers. The close relationships allow Dell to understand what they must supply in real time and then meet the demand and giving the consumer what they want and not just hoping that the customer will buy the product. Apple’s value is through product innovation that makes them a lead competitor in the market. Without their efficiency through outsourcing their manufacturing and logistics it may be a different story. They outsource production around the world so that they can produce the best products by the best people at the cheapest and in the most flexible way possible. Steve Jobs had only decided 2 weeks before release of the iPhone 4 that he had wanted a glass screen and due to the flexibility and fast reactions from manufacturers this was made possible. Wal-‐Mart is known for everyday low pricing in the eyes of the consumer and their strategy revolves around cost efficiency.

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Buyer THE ROLE

FASHION OF THE

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DIFFERENT BRANDS USE DIFFERENT TYPES OF SUPPLY CHAINS DEPENDING ON THEIR BUSINESS AIM.

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Wal-‐Mart’s success is down to the lower cost for production due to sourcing, better control over inventory and selection in stores that ultimately results in lower prices for customers. Amazon is valuable for its wide range of products and availability; the operational strategy is very efficient with reliable ordering systems for consumers. Lead-‐time can affect the supply chain as longer lead times can be very expensive and so retailers want to reduce the amount of time it takes to deliver products to the market. Recent growth of Amazon has come from its Amazon Prime program that offers “free” two-‐day delivery to more than 27 million subscribers. Where products cannot be stored ahead of time in warehouses like Amazon lead-‐time is critical, as it will also form the customers’ perception of the business. For a made to measure service a lead-‐time that is excessive may force the customer to shop with a competitor or a lead-‐time that is too short may suggest to the customer that the value of the product is too low.

Zara has a very unique supply chain compared to other retailers as it is focused on fast fashion. It was launched in 1975 and now has almost 2000 stores in 77 countries. Zara’s success comes from making catwalk copies in house and sending them out to stores within three 3 weeks. This enables the consumer to buy new on trend items every few weeks before they hit other retail stores. Zara turns out over 30,000 new designs per year with lightening speed. To achieve this speed, Zara limits their outsourcing and makes most of their catwalk copies in-‐house to ensure that they have better quality control over the product. If Zara does outsource, they use poorer European countries rather than the developing world such as Bangladesh. The industry average for products to hit the shop floor is 6 months spreading across 4 seasons, but Zara now want you to buy for 104 seasons with new products arriving in stores twice a week. Even when items arrive to Zara stores they are ready to be hung straight on the shop floor. All items have price and security tags attached already and are pre-‐ironed to save the staff time in store to focus on the customer. Due to the fast cycle of Zara products, consumers tend to visit the store 6 times more than they would any other retailer. From previous experience, if I see an item in store that I like I tend to buy it straight away, as it is very unlikely that the same item will still be there 2

weeks later. Another unusual way that Zara works compared to other retailers is that it uses little or no advertising. Retailers will spend millions of pounds on advertising new products, but the Zara founder called the advertising “a pointless distraction”. Our supply chains are evolving and brands are now looking at ways to make the customer feel included in the chain and make them feel that they understand where their product has come from. This is known as the prosperity chain that evolves from existing supply chains already in place within the industry. As supply chains have grown larger and more people are included in between the artisan, manufacturer and the consumer and some people are even replaced by machinery decreasing product value. As more people are involved and production increases, the clothing will lose its original authenticity.

Supply

DIFFERENCES IN

Chains

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uthenticity and value is what the prosperity chain is trying to bring back to into the production line. The prosperity chain will allow the customer to trace back who has made their garment right back to the artisan and allow the customer to even promote that artisans work through social media. An experiment was put in place in Madras, India by speaking to the original artisan’s

who struggle to compete with machine made goods and putting their unique code onto each garment. Consumers were then able to use this unique QR code to trace their garment back to its source. The result of this experiment was excellent with artisans now feeling proud of their work and feeling inspired by the letters of thanks from the consumer who is now able to contact them and promote them.

Zara’s supply chain is very different to the emerging prosperity supply chain as they are focussing on different aims. Zara’s supply chain focuses on getting the product to the consumer in the shortest space of time and minimising lead-‐time. There is no emphasis on where the product is made or how as long as production cost and time is kept low. The consumer has no idea where their product has come from or how it has been made which lowers the value of the product and makes it easier to throw away and buy more Zara items. Its “fast fashion” approach does not give any credit to the manufacture of the product and the consumer will only see the store front of Zara, not the work that has gone into it. The prosperity chain differs entirely, adding more emphasis on the production of the garment and allowing consumers to interact with the people who have spent time to create their product. It adds a personal touch to the process and this gives the garment an added value as a real person can be related to the product and not just a mass production line of machinery. Many consumers these days worry about the working conditions of people who work in factories creating garments such as this and being able to put a face to their garment will add consumer confidence and encourage them to buy from the brand again. More people benefit from the prosperity chain than that of a fast fashion supply chain.

Different retailers may have different types of control over their supply chain and their sourcing options. A small boutique may decide to source their products from a wholesaler that will supply a range of products at a lower price so that the boutique can make a profit on what they sell. They may also decide to source products from a specific designer in which case they would have to contact that designer directly or attend trade shows. Depending on the type of boutique they may source from garage sales especially if it is a vintage store as you can find a lot of different unusual vintage style products at these sales. As a small boutique may have just one or two owners they will have the overall say over where they source their products and the supply chain can vary. As the products would be ready made, sourced locally and the quantities bought would be a lot smaller, it means that the lead-‐times are smaller. A department store such as Selfridges would source their products differently to a small boutique. The buyer would be required to stock the store with a large range of well-‐known brands and also Selfridges own brand products. The well–known brands would be ready made from other designers whereas their own brand products would be manufactured to Selfridge’s own specifications. They would have more control over the supply chain process for their own brand products, choosing where they would be manufactured and cost of production.

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AUTHENTICITY & VALUE

Fast Fashion OR

The Guilt of Fast

ZARA’S PRODUCTION FACTORY WHERE CLOTHES ARE TAGGED BEFORE SHIPPING

Fashion

SOME OF THE DESIGNER BRANDS SOLD BY SELFRIDGES BOTH IN STORE AND ON THEIR WEBSITE

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multiple retailer such as River Island has more control over their supply chain, as all of their products are own brand. The buyer for River Island would be

required to travel abroad to Europe or Asia to source from cheaper manufacturers. This type of buyer would oversee the complete process of the product being developed including the delivery. The lead-‐time for River Island products would be higher than that of a small boutique due to the transportation time and because the products will be in larger quantities. Such large commercial retailers will buy in large quantities so that they can buy they items at a much lower cost. They would also have to continually search for new supply sources and not just continue with their proven suppliers. As you can see the buying role would differ greatly from a multiple retailer to a boutique. The larger the retailer means more extensive travel for the buyer whereas the buyer for the boutique would source closer to home as it would be less worthwhile for them to travel abroad. The buyer in the smaller boutique would also have a much smaller budget to manage than that of a larger retailer, but the larger retailer will likely have a team of buyers to manage smaller sections of the brand. A buyer who works for River Island will generally have to liaise with other teams within the business such as designers, merchandisers and suppliers on a daily basis. In a large company such as this there would be specific teams that would focus on smaller elements whereas in a smaller business the buyer may also take on the role of the merchandiser too.

When sourcing products locally there are advantages to the retailer such as being able to communicate faster and more efficiently. It is easier for the buyer to go and visit a manufacturer in the UK than having to pay money on flights to travel abroad and they do not have to worry about language barriers. Other benefits of sourcing from your home country are that the quality of clothing, manufacturing and labour standards is higher than in poorer countries. Products that are made in the UK have a label that states Handmade in Britain. This label gives the garment a higher product value to the consumer than of something that is from abroad as the consumer will feel more confident that it is of good quality and was made ethically. Products that use this label include the Cambridge Satchel Company and it is a highly sought item not just in the UK but also abroad due to its reputable manufacturing. Not only does the buyer not have to travel abroad, but the products will also have a shorter lead-‐time than those made abroad as they do not need to be transported to the UK. The disadvantage of manufacturing in your home company is that the costs are much higher than using poorer developing countries. This results in a smaller profit margin for the brand, but this may not have a large effect on profit if the brand has a lot of appeal and the products sell quickly.

Products that are sourced from overseas are much cheaper to manufacture and there is a wide range of manufacturers for brands to choose from. This is why overseas manufacturing has such a large appeal to retailers. There are many cons to manufacturing overseas though such as the lower standards and different types of manufacturing and lower labour standards for…

A Sourcing

RIVER ISLAND DESIGN TEAM

BRITISH HERITAGE IN USA

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…employees. In 2013 there was a factory collapse in Bangladesh that killed over 1100 workers with the factory making garments for many western retailers. Many retailers who were involved have paid compensation to the victims and their families but over a year later there are still retailers who have not paid. Retailer Benetton and the owners of Lee Cooper are some of the ones who have not donated to the tragedy as yet (www.cleanclothes.org/ranaplaza). This reflects on the reputation of the brand and ultimately whether the consumer will want to shop with them again in the future. Products will be perceived as lower quality due to the stigma surrounding manufacturing abroad. Clothing that is usually sourced from Bangladesh includes cotton and denim products as they use stonewashing and sandblasting processes on their It makes it more difficult for the buyers who have to travel abroad to visit the suppliers too as there may be language barriers. The additional costs in travelling abroad can be expensive as long haul flights are not cheap but are necessary to maintain relationships with the suppliers. One buyer may have to maintain a relationship with a few different suppliers in different countries and so it can be very difficult. It also costs more to ship the products over from overseas as you have to pay for customs and import costs. The shipping also adds lead-‐time to the whole process which for brand such as Zara that rely on speed may not be appropriate for their unique selling point. Items that need to be sourced could range from fabric and trimmings to labels, tickets and packaging. Labels must be sourced as each product under the Trade Descriptions Act in the UK states that the garment must have an identification of where the products are manufactured. It is a legal requirement and is usually the last stage of the production process. I am currently wearing an item of clothing from ASOS that was made in Turkey. It is a plain and simple long sleeve grey top that is made from 70% polyester, 20% cotton and 5% viscose. I decided to research the brand and find out where they source their materials. ASOS have a lot of information on their website

regarding ethical trading and sustainability. From the website I could see that not only do they source their products from Turkey, but also China, Eastern Europe, India and the UK. ASOS do not own any of the factories that they manufacture in but they work towards ensuring that the manufacturers offer safe working conditions for the employees. The brand has a new sourcing team, which includes the ethical trade team in the centre of it. They restructured this area of the business as they aim to put ethical trade at the very heart of supply chain sourcing decisions.

ASOS say “We believe there is a clear link between ethical trade and long-‐term commercial success, not just for us but also for our suppliers”. ASOS has a section on their website called “The Green Room” where all o f the products satisfy areas sustainable fashion. Points that ASOS use to make sure that it satisfies their sustainable fashion principles include, addressing climate change, removing waste and advancing animal welfare. They also have principles that involve the people, which include building communities, developing fair trade, alleviating poverty and preserving craftsmanship and artisanal skills. One of the workshops that ASOS involves itself with very closely is SOKO. SOKO is a clothing workshop in Kenya and it provides fair and safe

RANA PLAZA FACTORY COLLAPSE BANGLADESH

Rana Plaza “After last year’s disaster people blamed

factory owners, builders, or the government – but isn’t the real culprit

our demand for cheap clothing?”

JASON BURKE – THE GUARDIAN

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…employment and training for some of the country’s poorest communities. In SOKO, employees are given hot meals, refreshments and healthcare cover. The workshop also includes a crèche, kitchen and washing facilities that is beneficial for those in the poorest communities who struggle to work with young children. These small changes in the industry will hopefully point other retailers to do the same thing and invest in their supply chains and manufacturers

Supply chains have developed over time and are now faster than ever. Just 30 years ago it took retailers 30 days to get garments from the manufacturers to the shop floor. This has decreased dramatically down to 30 hours and manufacturers are now able to get clothes to the shop floor within just 30 hours. As I mentioned earlier the supply chain can be looked at as a supply cycle as the retailer reacts to the demand of the consumer. The whole process is customer centric and reacts to their demand, so if the customer wants a product that is not available in with one retailer then they will go somewhere else. The supply chain relies on a quick responses and so good communication is essential. The lead-‐time that I have spoken about in this article refers to the amount of time from the placement of an order to the delivery in the supply chain. The lead-‐time is made up of 3 sections, the pre-‐processing time, the processing time and the post processing time. The pre-‐processing lead-‐time relates to the time that is needed for planning, research, sampling, fabric buying and negotiation. The processing lead-‐time relates to the time required to manufacture the garments. The pre-‐processing lead time relates to the time needed for dispatch, transportation, customs and the delivery of the garments to the website. Depending on the fabrics needed to complete a garment such as trims the lead-‐time may be increased.

SOURCING MAP FROM DRAPERS ONLINE

A new method of distribution that has emerged is called cross docking. This is a logistics method that attempts to reduce costs in transportation and storage and also reduce the total lead-‐time. Cross docking breaks down received items on the loading dock and immediately matches them with the outgoing shipment requirements. Usually items would be stored in warehouse locations and then orders would be picked up at a later date. Wal-‐Mart first began using cross docking in the retail sector in the late 1980s. Cross docking does have its disadvantages though as all the additional handling from vehicles and containers could lead to added damage to the products. For cross docking to be effective, an adequate transport fleet will need to be put in place also which could lead to additional costs. Wal-‐Mart combats the added cost by having a fleet of company-‐owned trucks.

_______________________________________________________________________________________________ he British brand Jaeger has been established since 1884 and prides itself on heritage with high quality products. They source fabrics for some of their products from Italy, as they have many

suppliers that produce high-‐quality fabrics. The fabrics are more

expensive but will reflect the quality of the brand that is their unique selling point. The fabrics make Jaegers products stand out from competitors’ products and so it is worthwhile for them. Jaeger also manufacture many fabrics within the UK but using Italian fabrics which will reduce lead times for products as they do not have to ship them over from Italy. Some of the products that they use include camel hair, alpaca and merino wool and have been worn by Marilyn Monroe and Kate Moss. In a recent Drapers article regarding the stresses that multichannel and international are placing on supply chains, the product development manager for Jaeger explained “To protect our product and its quality we need full visibility of all of our manufacturing sites. The problem is when it comes to subcontractors. It is very important to retain visibility of our full supply chain and to minimise the risk of any damage done to the brand or to our product by subcontractors who are not making to our standards”. As a result Jaeger has reduced the number of suppliers it works with by about 30% to reduce risk and to make quality control easier to manage. Sourcing varies for different high street retailers, as the logistics director for Arcadia believes that it is about having flexibility and that near sourcing works well but it hits your profit margin and so many businesses will source from the Far East as they are driving prices down. For basic items major retailers are likely to go there. The flexibility is needed to react to the market demand; he says “on the whole it’s about keeping our cloth uncut until the last possible point”.

Retailers must also consider sustainability within their supply chain as many materials may be wasted in the production methods. To work around this, Topshop teamed up with the eco fashion brand “Reclaim to Wear” to create a new collection made entirely from any discarded materials in the warehouse. The materials that were used included surplus stock and production off-‐cuts to create on trend items to be sold in stores. Their aim is to solve the problem of textile waste and to encourage more sustainability within the fashion industry and other brands. The creative director of Reclaim to Wear stated, “This is the first step towards the creation of zero waste design collections. I trust that the Topshop team’s commitment to new sustainable solutions will

lead to the reconsidering of consumption versus disposal throughout the while fashion industry supply chain”. After doing some research on businessgreen.com I also found that twelve of the UK’s biggest retailers including Next and Topshop have pledged to slash the carbon, water and waste impact of their

clothes by 15% by the end of the decade. The efforts from these retailers could have a considerable effect on the entire industry’s supply chain, as it will ultimately reduce carbon emissions and fast

T JAEGER WEBSITE BOASTS UK HERITAGE

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from the clothing production process though it also starts from the raw materials at the beginning of the supply chain and the people who would harvest them such as the cotton farmers. Around 90% of the world’s 100 million cotton farmers live in developing countries where their livelihoods are affected by changes in the market and climate issues. International efforts for sustainable cotton production are now improving to protect the environment and improve the lives of the farmers and their families. Cotton Connect is a new company that helps to deliver business benefits to retailers in the UK and also helps to create more sustainable cotton supply chains. They work closely with businesses to develop and build cotton strategies and assess your current cotton footprint. They will then map out your cotton supply chain and look for more sustainable cotton options. Their plans will be tailored to your own business strategy so that it fits in with your current supply chain model. Overall this helps to make the supply chain more socially, environmentally and economically stable.

The food supply chain differs slightly from the retail supply chain as the raw materials start from livestock and on a farm and end up in supermarkets or butchers. The food supply chain is also globalised just like retail with more consumers opting for locally grown organic goods. This type of food chain is subject to more risks and can become more complex due to food standard regulations. They must also consider the cost of rising oil prices, political instability and natural disasters on the raw materials when considering transportation around the world. According to wrap.org.uk, the UK has created 6.5 million tonnes worth of food waste. 1.6 million tonnes from grocery retail and wholesale with 4.9 million tonnes of waste coming from the manufacturing.

When moving food internationally they must follow the regulations for labelling, packaging and food safety.

An effective supply chain overall needs to consider a quick turnover of products so that they can get the raw materials produced and into the store as soon as possible for customers to buy. Lots of stock must be available in the store at all times so

that staff members can replenish the shop floor. In the case of Zara, clothing is steamed before it hits the store to save the staff valuable time. Transport from manufacturer to stores or warehouses must be smooth and efficient with all legal requirements in place for those products that need it. To maintain fast deliveries and production speed, communication in all areas of the supply chain must be effective. One main factor that has stood out as being important within an effective supply chain is flexibility and the ability to react to changing markets and trends. Omni-‐channel retailing in the evolution of

multi-‐channel retailing. The retailer is now meeting the

consumer’s demands by

executing specialised supply

chain strategy software. It is different to multi-‐channel retailing as omni-‐channel integrates multichannel such as bricks and mortar, Internet and mobile into one seamless experience for the consumer. For example if the consumer checked an item on his desktop computer, they could then purchase it later in their saved items on a mobile to then pick up in the customers chosen location. ASOS is a good example of omni-‐channel, as from personal experience if I view items on my desktop I will then see them on my mobile device in “saved items”. If I then choose to purchase the items I can choose to have them delivered to my house or to my nearest click and collect location.

Unit 29 Task 2

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Transcript of Unit 29 Task 2