Q-and-A

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Buy­ers & brands claim that they of­fer lot of sup­port to their ven­dors, be it raw ma­te­rial sourc­ing, train­ing, worker wel­fare ini­tia­tives or al­lied is­sues which gen­er­ate from time to time… How sup­port­ive are buy­ers in today’s chal­leng­ing time, con­sid­er­ing that they too are fac­ing many mar­ket pres­sures? Have you got any sup­port from buy­ers in re­cent months? What kind of sup­port do you ex­pect from buy­ers in today’s con­text?

Siva Sankar,

MD, Exel Sourc­ing Com­pany, Tirupur

Few buy­ers and brands do sup­port us by means of of­fer­ing sourc­ing so­lu­tions and some of the wel­fare ini­tia­tives. But still the chal­lenges we face are quite ex­ten­sive…, par­tic­u­larly in this post-GST era, when we are also sailing against the wind as we don’t have the draw­back fa­cil­i­ties as we used to have ear­lier. GST re­funds are not yet reg­u­larised. Hav­ing to shoul­der these in­ter­nal is­sues, we ex­pect lit­tle more sup­port from cus­tomers in un­der­stand­ing the sit­u­a­tion. But if we look from their per­spec­tive, they com­pare In­dian sup­pli­ers with other GSP coun­tries’ sup­pli­ers and are try­ing to get the prices agreed upon which are re­ally dif­fi­cult. Price com­par­i­son could be done if we have a level play­ing field. In this front we ex­pect more gen­uine­ness from cus­tomers in un­der­stand­ing the sup­plier’s dif­fi­cul­ties. More­over, we would be hap­pier if they give us a vis­i­bil­ity of their sourc­ing for next 6 months so that we can align our re­sources ac­cord­ingly. We have to take a tight bal­ance be­tween ‘Cost­ing, Com­pli­ance and Com­pet­i­tive­ness’. These 3Cs are very im­por­tant for both the sup­pli­ers and the buy­ers where both have to stretch their hands to get a win-win sit­u­a­tion.

Tridev Sadh, Di­rec­tor, VRT Ex­ports, Noida

I would say that the sce­nario is quite re­verse to your state­ment as buy­ers are not sup­port­ing while we (the sup­pli­ers) are sup­port­ing them a lot. For ex­am­ple, I can give three ex­am­ples: we have re­duced our MOQ, in­creased the credit time and eased the terms. We are any­how man­ag­ing all the ex­pen­di­ture of com­pli­ance and al­lied ser­vices while our mar­gins have re­duced and ex­port ben­e­fits are al­most nil now. Ear­lier we used to have nor­mal MOQ of 1,000 pieces which is now less than half, that is, 400 pieces. Ear­lier bou­tique buy­ers were hav­ing nor­mal or­der of 100 pieces which is now even of 20 pieces. Sim­i­larly, we had the sys­tem of 30 per cent ad­vance and rest on com­ple­tion of ship­ment. But now ad­vance is al­most nil and even in some cases, we re­ceive pay­ment af­ter 2 months of goods be­ing de­liv­ered.

I don’t see that there is any strong rea­son that buy­ers will sup­port us; they are also un­der pres­sure, so why they will change their way of work­ing or will of­fer any ease for us. They have many op­tions as a par­tic­u­lar ex­porter/ven­dor will not serve buy­ers with some ex­tra sup­port; there are many more ex­porters/ven­dors to sup­port them.

Aseem Kumar, Di­rec­tor, Fash­ion Images Over­seas, Jaipur

There is as such no sup­port, and I feel that mu­tual trust is los­ing which is not a good sign. God for­bid, but it is last sea­son when we have lit­tle bit of any kind of sup­port from buy­ers. Now they are ex­plor­ing other sourc­ing coun­tries; so next sea­son will be more dif­fi­cult for us. Many of the buy­ers have trust on us due to long-term re­la­tions and our good work­ing knowl­edge. But they do not have the same ex­pec­ta­tion from our Gov­ern­ment as of­fi­cial de­ci­sions, com­ing one af­ter the other, are go­ing against the ap­parel ex­porters. Buy­ers are not even giv­ing ad­vance as they have fear, lest some change in pol­icy or de­ci­sion oc­curs which will not be in the favour of ex­porters.

Pranav Ghe­lani, MD, Su­man­galam Ex­ports, Mum­bai

We agree that mar­ket pres­sures have in­creased sig­nif­i­cantly for re­tail­ers in Europe and US. Like­wise,

In­dian man­u­fac­tur­ers too have to bat­tle chal­lenges of in­creas­ing raw ma­te­rial prices, labour is­sues, com­pli­ance costs, re­duced in­cen­tives, and a stronger ru­pee. In such a sce­nario, we ex­pect the buy­ers to ap­pre­ci­ate the as­so­ci­a­tion that was built over a time, and treat long time ven­dors as their ‘part­ners’, in­stead of just ‘sup­pli­ers’. Un­for­tu­nately, we see that buy­ers and brands are un­der­min­ing the value of such re­la­tion­ships and tend to switch sup­pli­ers or the sourc­ing coun­try for few cents lesser in price. When yarn prices de­crease or the value of their cur­rency in­creases, they are quick to ask for price re­vi­sions. We ex­pect the buy­ers to value all the ef­forts put in by ven­dors to ship qual­ity prod­ucts in a

timely man­ner in the past and main­tain the or­der flow as best as pos­si­ble. If there is any price con­cern, they should hon­estly dis­cuss it so that a so­lu­tion can be found, in­stead of switch­ing sup­pli­ers.

Ankur Kakkar, Pro­pri­etor, Kaiser En­ter­prises, Delhi

Buy­ers are too sup­port­ive.

They are well aware about the In­dian sys­tem of work­ing and give de­liv­ery dates based on ven­dor’s info of 120 to 140 days from the date of or­der. Of­ten, they keep 2-3 week’s, mar­gin with them. In case of de­lays which are usual, they do not in­sist on air de­liv­er­ies, rather give ex­ten­sions to them which save sup­pli­ers. Ad­di­tion­ally, when it comes to sourc­ing, they of­ten help in sourc­ing trims from China or pur­chase them and send to ven­dors for ap­pli­ca­tion on the prod­uct.

Shivin­der Sharma, Di­rec­tor, Ac­tive Sports In­dus­tries/Kas­turi Lal and Sons, Meerut

It is a very big is­sue and has many as­pects, needs or ar­eas of ex­pected sup­port which may vary for dif­fer­ent man­u­fac­tur­ers and ex­porters. I must say that if pay­ment is sure and made on time, it is one of the ma­jor sup­ports. It is a very tough time to give credit af­ter de­mon­e­ti­za­tion and GST…

Due to de­lay in pay­ments, some­times it be­comes too dif­fi­cult as we can’t clear pay­ments for raw ma­te­ri­als, labour and other ex­penses.

The Gov­ern­ment should make it manda­tory to pay pay­ment of sup­plies in a spe­cific time or cre­ate some such sys­tem. This will ul­ti­mately be bet­ter for fu­ture busi­ness and en­sure growth of the in­dus­try.

Sarthi Sawh­ney, Di­rec­tor, Bright Star, Delhi

We must un­der­stand that ‘buy­ers’ are a very di­verse group of the ap­parel com­mu­nity, just like the sup­pli­ers, buy­ing agents and so on. Some buy­ers are help­ful to the point that the sup­port is not ‘sup­port’, but more of an ob­li­gated change to the or­ga­ni­za­tion’s sys­tems to bring in uni­for­mity with the buyer’s or­ga­ni­za­tion sys­tems as sup­pli­ers are eval­u­ated and re­viewed based on how much in­put is uti­lized. There are also mo­ments where their help proves costly to the com­pany and even onto them­selves; for ex­am­ple, nom­i­na­tion of such sup­pli­ers (fab­ric or trim­mings sup­pli­ers), cargo agents, etc. who are ex­pen­sive and be­come dif­fi­cult to work with. Buy­ers may be fac­ing dif­fi­cul­ties in their mar­kets but must re­al­ize that the an­swer to those dif­fi­cul­ties does not lie in claim­ing deb­its to their sup­pli­ers or pass­ing on ex­penses onto them. The buyer-sup­plier re­la­tion­ship must be re­mem­bered as a B2B one and not a B2C one, as it is of­ten mis­un­der­stood. Fur­ther help and sup­port to is­sues should not be in the form of PPTs and emails with man­u­als on how to work, but more af­ter meet­ing faceto-face and keep­ing an open mind about the re­al­i­ties present, and then de­vel­op­ing ideas and so­lu­tions to­gether to solve the prob­lems.

Yatish Mon­court, Di­rec­tor, Fran­cis Wacziarg, Noida

Yes, they are right, but the ex­tent of sup­port varies from buyer to buyer. Many of them have their own nom­i­nated raw ma­te­rial sup­pli­ers in­clud­ing la­bels & tags, be­cause of which, we save time in get­ting the ap­provals. Apart from this, we are, more or less, safe about their qual­ity as well. Some of our buy­ers like In­ter­sport, Um­bro, etc. ar­ranged for the train­ing pro­grammes on so­cial com­pli­ances, etc. in col­lab­o­ra­tion with 3rd-party train­ers. Apart from the buy­ers them­selves, the buy­ing houses like us, play a vi­tal role be­cause we know the pulse of our ven­dors. Most im­por­tant of all, the sup­port we re­ceived from our buy­ers in re­cent times is the price up­charge. It is not that many of the buy­ers are work­ing with hefty mar­gins, but they did it to fi­nan­cially sup­port their sup­pli­ers when the In­dian Gov­ern­ment re­duced the draw­back rates sub­stan­tially and work­ing cap­i­tal got blocked due to pol­icy changes.

Apart from the price up­charge, many of our buy­ers also ex­tended the de­liv­ery dates to man­age with pro­duc­tion dis­tur­bances, es­pe­cially with re­gard to the raw ma­te­rial, etc. We only need the best price. We know that some of the buy­ers are shift­ing the or­ders just for the sake of sav­ing few pen­nies. We ex­pect that the buy­ers should not go some­where else for this rea­son. Guar­an­teed reg­u­lar busi­ness helps us in ne­go­ti­at­ing bet­ter prices with the raw ma­te­rial sup­pli­ers and in ca­pac­ity plan­ning. Reg­u­lar and con­tin­u­ous work helps us in min­i­miz­ing the labour at­tri­tion, be­sides the skill level of the fac­tory can also be main­tained op­ti­mally. Sup­port in the form of speedy ap­provals with­out any un­due de­lay, is also very im­por­tant to main­tain the pro­duc­tion plan­ning and thereby to meet the de­liv­ery sched­ules.

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