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FACING PROBLEMS IN APPAREL SOURCING - A PRACTICAL GUIDE

By Margie Bross | 28 January 2019

The apparel supply chain is made up of manufacturers, suppliers, retailers and consumers. And with thousands of people each having their own levels of service expectations, standards are inevitably going to slip, even with preventative measures in place.

Quality claims, delivery delays compliance violations to name but a few, are among the regular culprits. Not forgetting the most unforgiving of calamities such as natural disasters and civil unrest.

So the question is, in these events of unexpected upheaval, what can you do to minimise further disruption?

In this extract from 'When Things Go Wrong' by Margie Bross, we focus on the first chapter of how to face common problems in apparel sourcing and the practical advice on how to overcome them.

1. Evaluate the impact

2. Deliver the bad news

3. Fix the problem

4. Learn from the experience

1. EVALUATE THE IMPACT

When things go wrong, the different stakeholders will have different agendas, different perspectives and different priorities. For the sourcing team, the key to addressing and resolving production problems is understanding what is most important to the stakeholders.

Protect The Stakeholders’ Priorities: Respect What’s Important

The first step in the aftermath of a production problem of any nature or magnitude is to evaluate its impact on the five overarching priorities that the brand’s stakeholders will most want to protect:

  • The personal safety of employees and associates

  • The reputation of the brand name

  • The profitability of the business

  • The design integrity of the product

The relationships between the buyers and sellers Protect Your People: Safety First “Is everyone safe?” is the first question to ask. Concern for safety is an obvious response when faced with a natural disaster, civil unrest and certain compliance violations. The sourcing team’s most urgent task is to determine the status of everyone in the brand’s immediate contact circle and to verify that they are not at risk. Everyone means everyone – people employed by the brand, by the overseas offices and by the brand’s suppliers. People’s safety trumps everything else.

Protect Your Brand Name: Reputation Is Everything

Whether it is the name on the label or the name of the parent company, a business’s brand name is its most valuable asset. Manufacturing issues such as poor quality, late deliveries and ethical production violations can negatively impact the perception of the brand among retailers, consumers and the general public.

Lost reputation is abstract and unquantifiable, but subsequent lost sales can be a very real after-effect of publicised unethical or unsound production practices.

It is critical, therefore, when facing a production problem, to think beyond short-term goals such as monetary settlement or merchandise replacement and focus first on the impact on the brand name’s reputation.

Protect Your Product: Design Integrity

Design integrity goes hand in hand with reputation. A company that makes a substantial investment in brand identity will expect the product they receive to conform with their specifications on every level.

Quality issues are diverse, but when the merchant, designer, retailer or consumer says “That’s not what we wanted; that’s not what we ordered,” it means the supply chain failed to protect the brand’s design integrity.

Protect Your Business: Profit Is The Point

Production problems inevitably end up as financial problems. Buyers are not inclined to absorb losses due to quality or delivery issues, whatever their cause. They may be sympathetic to forces and events beyond anyone’s control, but at the same time, when they place an order, they expect to achieve their financial goals.

“Make me whole” is an industry maxim. Applied in the aftermath of a production problem, it means that the sourcing team will be responsible for negotiating a settlement that will protect the brand’s investment.

Protect Your Relationships: Fair’s Fair

The customer is always right – and in theory allowed to expect the sellers (suppliers and factories) to absorb any financial loss incurred by a production problem. Still, the element of fairness is essential to a long-term business relationship. Although the objective of negotiation is to recoup the brand’s monetary loss, the sourcing team also needs to weigh the impact on the supplier.

There’s no single right way to apportion financial responsibility between brands and suppliers. Delays or damage caused by natural disasters or civil unrest may well be no one’s fault. Late deliveries are often the result of a mismanaged approval process at odds with the agreed time and action calendar.

In negotiating settlements, be tough, but also be fair to all the stakeholders and keep your eye on the importance of maintaining relationships. If the resolution puts an unsustainable financial burden on a supplier, or if it results in bitterness and resentment, you may have won the battle, but lost the war.

Conversely, if the buyer – whether it’s the brand’s merchant, the retailer or the consumer – perceives that the supplier hasn’t taken appropriate responsibility for a production problem, then the impact may be a loss of confidence and reluctance to support the vendor going forward. Again, the battle may be won, but the war lost. The sourcing team, the fulcrum in the buyer/seller seesaw, must consider the problem’s impact on both sides and seek a balanced settlement.

Catch-up with us next month when we highlight the second chapter of ‘When things go wrong’ and discuss the best route to acknowledging the problem and eventually addressing and resolving.


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