Sourcing planning for retail chains or brands based in India.
Sourcing is an art of experience negotiations with excel sheet can make purchase plans viable.
SOURCING CONSULTANCY METHODS CAN SAVE YOUR 25%
Positive mindset and long-term goal benefits shall be thought before reading this report, I hope you will not discuss with anyone else in the industry. Honesty and trust among whole team only can make it happen. Vendors are our team if you make them like that, please never treat vendor as party sitting across table. Try to make them part of it. We can find results within month, but too keep on safer side I call it long term.
Assume buying or sourcing or purchase of any metal engineering part or software or even shirt can be quoted 5 by one factory and another can quote it for 15.Here quality is same but depends on situation of seller, legal matters, availability of raw material and payment terms of buyer. So as consultant I tried to get catalyst and get you deals for 8, am I correct in negotiations?
Sourcing planning for retail chains or brands based in India. Following firstly present changes in your purchase and buying system.
Private label making is system where store have their own brand and gets merchandise made on their own design terms and fabrics. Here we consider private label manufacturing in this sourcing planning which carries mix of buying finished items without label, but common to all brands, Like buying solid men’s white shirt or ladies top or blouse in single color, it is buying like school uniform without school label.
Product costing and fashion sales forecasting are very unstable terms. We need to have very accurate calculations and experience. Fabric prices vary from state to state, making charges vary from factory to factory.
Fashion sales vary from city to city and even district to district. So this process we have too discuss a lot with presence of mind, sometimes it is like playing a gamble which style in fashion sells on particular month. I have seen white shirt sold in winters and balck shirt sold in summers because that particular shop or town have opposite fashion taste than rest of the world.
Product costing in this system is open to all vendors and sales staff, means fabric cost plus CMTP, plus delivery Charges take 5% add up in costing for stores buying for financial cost interest, warehousing cost and banking charges.
Warehousing cost can cut down if we accomplish this plan and gets delivery to store shelf’s directly. Here we need to have stores sales forecasting very accurate which comes with experience and market trends.
Vendor selections-This very important and strategic, we have to have very good reputation in terms of product development and quality assurance terms with vendor.
As I have 15 years of costing, negotiations and product development experience, hope to give best of my knowledge. Nevertheless, here, I need very good support on payment terms, as payment terms can lower prices sometimes by 15% of prevailing cost of any garment.
Contract buying on monthly basis-
This very cost effective in short and both long-term basis.
If we have small vendors to deliver products on CMTP basis.
Means cut to make, tailoring and packing basis, than we can reduce cost by 7% to cost given to vendor, but here we need to invest on fabric .Some contract factories can work on this if we offer them confirmed monthly order quantity
Pre planning systems and calculations are as follows.
1-Here we need to have reporting to only director of company who gives final go along with its present accounts department.
2-Decisions shall be taken among sales team me and director of purchase. We need to have inputs of fashion designers and forecasters in our buying only on season basis which is only 4 to 5 meeting in years who shall be reporting to me and paid my my only.
Assume buying or sourcing or purchase of any metal engineering part or software or even shirt can be quoted 5 by one factory and another can quote it for 15.Here quality is same but depends on situation of seller, legal matters, availability of raw material and payment terms of buyer. So as consultant I tried to get catalyst and get you deals for 8, am I correct in negotiations?
Sourcing planning for retail chains or brands based in India. Following firstly present changes in your purchase and buying system.
3-Presales fashion forecasting shall be done where we have monthly quantity forecasting of items we need to sell. Minimum guarantee sales plans in particular store shall be added. Here we need to have professional garment sales store manager who can give input on his sales plan monthly. Here my forecasting with inputs from market and designers gives wattage on sales. So here I am trying to fashion forecast with sales team, market forces and readily available designs in the market, these can be delivered on short notices from factories and wholesalers.
4 Appointing sourcing network on wholesalers and small factories those can do small quantity delivers in short notices. Having contract buying from factories, where insuring factories buying on monthly or weekly basis.
One—scraping following departments those concerned your purchase and sourcing. Which save 3% on administration cost, 10% salaries and including cost of communications and travel timing? We need only one fashion coordinator and one quality controller to be paid; their salary shall be half paid from my monthly charges.
Second Warehousing shall be minimized at your end; here we will formulate sales quantity and timing season wise and getting all deliveries directly to store from factories. Asking factories to keep some stock on our forecasting and we will insure factories full one year buying. It is like buying on contract rather than buying on consignment basis.
Three—Consignment basis buying can be done for high value seasonal buying items like wedding dresses, wedding suits and high values designer clothing, this can give safe side to our capital and inventory on salving.
I have made some flow chart those can be amended as per company to brand basis those can be updated on daily basis. This gives better MIS SUPPORT
Flow Chart One—Vendor chart item wise having priced, item, quantity, delivers dates and monthly requirement column. Shall be discussed only with buying director and me.
Flow chart second--chart shall be discussed and updated by director, me, sales staff, accounts and store inventory. Store inventory chart shall be different from this chart.
Flow-chart three for delivery, quantity and quality control. Shall be discussed with sales staff, me and fashion coordinator.
Flow chart four shall be having final delivery details, sales details with dates on daily basis, payments done, vendor’s performance, garment’s sales and quality performance. This is very important chart and shall be discussed only with director purchase, me and fashion coordinator.
Fashion coordinator -----Here I created a post of a person with low IQ but computer perceptive and honest. Person who shall not take decision, it is strategic to have less qualified person, just to have trade secret intact. However, this person shall coordinate all of us so should be communicative and daring to call anyone 100 times a day.
All inputs of these flow chart are business trade secrets and shall be made and amended at your place and I shall not be discussing with any one else.
Here we need one fresh fashion coordinator, who is communicative and computer savvy, who can collect all dates from concerned people and keep updating it and distributing among concerned people.
Finally updating shall be confirmed with me. Here follow charts shall be discussed and updated by director, me, sales staff, accounts and store inventory. Store inventory chart shall be different from this chart
This fashion coordinator person shall be loyal to brand owner and me and shall not discus these charts with any one else.
This post in small and only clerical but honesty is must. Because this person shall be setting in brand’s office having no decision power but gets indirect power from sales, company director and me. Person shall be coordinating all of us as we shall be traveling a lot and giving orders on emails and phone.
Presently some brands are doing this system in India, with inputs made by them and following MIS, but this system never presented to anyone else.
As I keep this system to be practiced along with me and than followed by companies, but follow up and coordination is key words here, which only be achievable when we think like me in positive directions and teamwork.
This particular planning is tried and tested with retail chains buying systems of foreign retails chains.
Nevertheless, we need to have some co-ordinations among sourcing company, brand, and store, as this concept is new to Indian buying patterns. Easy flow chart system that be practiced within week and within one Q, brand can make it compatible. Here this method is so easy that I followed it for foreign client within week and some of these clients done even need me.
Please donor discus this plan with anyone else.
MY WORKING TERMS
Here my payments depends upon how many hours I need to put to implement this plan, normally I charge starting joining rs 50000 advance, if you have already buying for 2 years and have some vendors base, sales forecasting of year with you. In addition, rest on 10% of buying amount. Here traveling cost is yours, although I incur and manage 50% of travel cost with payments of my other bills. Two staff’s salary shall be compensated 50% with me.
I plan to work only with one garment retail chain store for coming year, so plan fast as I have decide early.
Normally monthly buying comes around of rs 20lac of particular small store.
