What is Your Sourcing Strategy?

How many of you have a sourcing strategy?  How many of you have taken a long, hard look at your suppliers, your vendors, your manufacturers and asked yourself these questions:  “What will my supply chain look like in a year?”  “Can I expect to get the same margins I’m getting now with the same sourcing strategy?”  “How can I improve my delivery times and keep my costs low?” “How do I mitigate my risks?”  More questions spring to mind, but you get the idea. 

Think about your current supply chain.  Where are you getting most of your goods?  Is it all from one country?  Is it from one or two vendors at most?  Would your business survive if those vendors increased their prices by 1/3? 

Pick up any newspaper and take a good look at the business and news sections.  This week’s Wall Street Journal article titled “U. S. Retailers Turning Their Gaze Beyond China” sums up what many other articles are saying:  with rising labor costs in China, and with Chinese factory workers striking for higher wages, the days of inexpensive, quality products from China may be coming to an end.  So what are these retailers planning for their sourcing strategy?  Well, finding other, more affordable labor markets is key.  India, Cambodia, Vietnam and other Asian sources for one thing.  Africa is starting to develop a talented labor pool as well.  There is always Mexico, the Caribbean and Central America.  And, hey…what about the U. S.? 

I know, you don’t want to spread the work around too much.  You need to concentrate your products and keep your manufacturers working.  I agree.  However, if I were getting all of my product from China, I would start TODAY to find quality, reliable resources in other markets and build on those relationships.  Yes, I know…how do you find those quality, reliable resources?  Start with the Sourcing at MAGIC event.  Not planning on attending in August?  It might be too late if you think you can wait until February’s Sourcing at MAGIC event.  

Just like fashion, the world of sourcing is constantly changing and evolving.  Everyone is trying to play the same game.  Get the best quality goods for the lowest prices with the fastest turn times.  Being a leader in the apparel industry means finding those trends and responding quickly.  The same goes for your sourcing strategy.  Responding quickly is the key. 

Come see us at the Sourcing at MAGIC event.  FBI will be presenting seminars on a number of topics.  Can’t wait to see you there!

Jill Mazur is an independent apparel business and technology consultant working with Fashion Business, Incorporated.  Email:  jill@fashionbizinc.org

Let’s hope that what happens at MAGIC doesn’t just stay in Las Vegas. Let’s hope that the excitement, energy and dare I say it, enthusiasm I felt at last week’s MAGIC show is carried forward throughout the year. It was nice to see a lot of foot traffic, new faces, new brands and even orders being written. I know this isn’t a barometer for the economy, but it was encouraging none-the-less.

It’s a lot to see and do with all of the shows happening at the same time: POOLTradeshow, PROJECT, MAGIC, S. L. A. T. E., WWDMAGIC, STREET and more, it’s hard to keep track of everything and impossible to see everything unless you have a pair of rollerblades with you. I was excited to be a part of the SOURCING at MAGIC marketplace and seminars. FBI presented a number of seminars and panels on a variety of topics. Frances Harder and the FBI team presented seminars on “No Risk = No Sales: How to Plan, Merchandise and Brand your Product in a Global Market,” “Turning a Bad Economy Into a Profitable Business Opportunity” and “Retailing for Profit in a New Economy.” I’m not sure how Frances had any vocal chords left after four seminars, but she was still raring to go at the FBI cocktail event Wednesday night at the Hard Rock.

It’s exciting to be a part of these seminars. We met a lot of interesting people with great stories to tell and great products to bring to market. We even signed up a number of new members, excited to take advantage of a discounted FBI membership rate for the MAGIC seminars. I know how excited and eager people are when they have a great idea or design to develop and sell. The challenge becomes how to bring that product to market. MAGIC and all of the related tradeshows are a shining example of people and companies who were able to successfully launch their ideas and sell them to targeted consumers. FBI seminars, classes, consulting and training are all designed to support fashion businesses from inception to profitable multi-million dollar brands. I speak from personal experience when I say that it’s thrilling to see our members “fly the nest” and become the next great brand. It’s not without a lot of hard work and long hours, but by taking advantage of the FBI membership, our members benefit from our expertise, knowledge and know-how to help them navigate the pitfalls of this industry.

I’m looking forward to MAGIC in August, 2010. I hope to see more FBI members showing their lines and doing great business. I know if they take advantage of their memberships, they’ll be well on their way.

Jill Mazur is an independent apparel business and technology consultant working with Fashion Business, Incorporated. Email: jill@fashionbizinc.org

I had lunch with a friend recently. I mentioned FBI was presenting a number of seminars on Sourcing at MAGIC, February 16 – 18, 2010. When she asked me what sourcing was, I had to think long and hard about how to describe sourcing in general. It seems easy enough to describe: the supply of resources as required by a business process. I’m sure that’s not what she wanted to hear, so I thought about it for a while. She is a screenwriter with no experience in any sort of manufacturing or service industry. I realized, however, that sourcing can be applied to almost any business process. In her case I related it to her wedding, I asked her to think of her wedding planning as sourcing. Think of the logistics, planning, purchasing, deliveries, setup, payments and tastings as sourcing.

Unless you’re doing everything yourself, including sewing your own dress, baking your own cake, growing your own flowers and playing all of the instruments in the band, you’re sourcing. Many brides hire a wedding planner – let’s call that the agent. The agent’s job is to facilitate the sourcing process. They smooth out the bumps, they help ensure shipments are on time, they deal with customs and suppliers and manufacturers to make sure everyone has what they need to get the merchandise manufactured and delivered on time. In the case of a bride, however, late shipments, extensions, customs holdups and shortages aren’t acceptable at all, so the wedding planner has his or her hands full just as much as an agent. Throughout the wedding planning or sourcing process there are a number of vendors supplying goods and services. A bride might have a caterer supplying food, a photographer, a DJ or band, florist, clergyperson, venue and more. A manufacturer might have fabric or trim suppliers, cutting and sewing services, shippers or freight forwarders and more. Retailers can be as demanding as a bride, so keep in mind your retailers requirements throughout the sourcing process.

That’s not the half of it, however. You don’t just start sourcing, just like you don’t just start planning a wedding. First, you need to think of your budget. How much do you have to spend to bring your products to market or to get yourself and your spouse-to-be to “I do?” Second, what should the end result look like? Third, what is the timeframe to get to the deliverable? How long do you have to plan this? In the wedding world, it may be months or years, in the retail world weeks are better than months and rarely can anyone get away with years. Fourth, how do you find a reliable, high quality agent or wedding planner that fits your requirements - budget, personality, location, contacts, etc.? Do you work off of recommendations, advertising, Angie’s List? How do you know that the person you entrust with your business will provide the services you need? Fifth, how do you begin to execute your plan? Where do you find your suppliers? How do you know the designs and fabric swatches you sent months ago will be delivered to your specifications and quantities? Can you get TOP samples? A bride can’t. But she can have her gown custom altered and chances are good, you can’t do that with your production run. Sixth, what about logistics? What are you doing to track your purchase orders, customs clearing, quota numbers and containers? Let’s hope you have a good system in place to provide visibility to all of that information. If the bride is savvy, she’s tracking her information in an organizer or spreadsheet. Last, but not least, how are you tracking your finances? Letters of credit? Payments to your agent or vendors? Due dates and payment terms? Hopefully the bride is tracking her deposits and payments by check or credit card.

By the time I finished explaining the sourcing process with my bridal analogy, my friend actually understood sourcing better than many of my clients. Then I hit her with “Hopefully, this is the only wedding you’ll ever have to plan. Apparel manufacturers source year round for millions of products to be delivered to thousands of retailers. It’s like planning hundreds of wedding a year, without the cake tasting or big parties at the end.” And, if you do it right, make your deliveries and even make your margins, you’ll keep on doing it year after year.

Jill Mazur is an independent apparel business and technology consultant working with Fashion Business, Incorporated. Email: jill@fashionbizinc.org