NEWS & COMMENT

IN-DEPTH FEATURES

REGIONS

COMPANIES

SECTORS

NEW RE:SOURCE

APPAREL RESEARCH

ABOUT

FIXING PROBLEMS IN APPAREL SOURCING - A PRACTICAL GUIDE

By Margie Bross | 22 March 2019

In last month’s extract of When Things Go Wrong by Margie Bross, we focused on the fundamentals of managing communication around common problems in apparel sourcing and practical advice on how to deliver the bad news.

Now we focus on how to fix the problem and take it to a resolution. The key to managing problems in apparel sourcing, at any stage, is to be as honest and as accurate with your information as you can.

Think SMART. Are the solutions you’re proposing to the buyer specific, measurable, achievable, relevant and time-bound? Have you answered the who, what, when?

In any breakdown of the supply chain, relationships and reputation are at stake. Your job is to gather the facts, negotiate, and execute a successful plan in a way that minimises stakeholder and business disruption.

And here’s how…

1. Evaluate the impact

2. Deliver the bad news

3. Fix the problem

4. Learn from the experience


 

3. FIX THE PROBLEM

Now that a transparent, truthful and non-emotional working environment has been established, hold discussions with your team and your suppliers to provide options, negotiate a settlement and implement a plan that fixes the problem.

Options, Quantified: Time AND Money

What the stakeholders will most want to learn about any proposed solution is how long it is going to take, how much it is going to cost and who is going to pay for it. You will need to be very specific on the time and cost impacts of any solution you propose.

In your role as problem-solver you should provide a range of nuanced options. Don’t make assumptions about the stakeholders’ priorities. Solutions that require more time may cost less, and conversely faster solutions may be more expensive to implement. Only the stakeholders responsible can decide which makes more sense.

Unquantified proposals just waste time in volleying information back and forth. For example, vague statements such as “If we do X, delivery will be delayed” or “If we do Y, there will be additional costs” beg the question: How long, how much, who pays? While the emails accumulate, frustrations fester and production status deteriorates.

It’s also important to consider residual ramifications such as reputational harm and damaged relationships. These are more abstract and can’t be monetised, but their impact should not be underestimated or undermanaged.

Relationships are essential in apparel production and can be complex and multilayered. Even the most reliable supplier occasionally falters. A forward-thinking solution will acknowledge the value of the relationship despite the impact of the current problem. Conversely, suppliers need to understand that their response to a problem will colour their relationship with the brand going forward, for better or worse.

Both reputation and relationships need to be addressed thoughtfully and, if necessary, escalated to a level of leadership that has the authority to accept a short-term financial setback in favour of long-term strategy. What might be most expedient as a cost-oriented solution, however, may be less favourable to the long-term future of the business. If you sense that the person you’re working with, either the buyer or the seller, is missing the big picture, reach up the ladder.

Negotiation And Settlement: A Balancing Act

Negotiating settlements can be challenging for all parties. The very act of discussing compensation implies that mistakes have been made, that the supplier has been careless, or worse, dishonest. For many reasons – pride, embarrassment or aversion to conflict – suppliers may be reluctant to admit wrongdoing. Attention to cultural sensitivity will help move the negotiation forward.

Vendors expect fairness above all. Keep the “How can this happen?” outrage to a minimum and concentrate on the facts of the brand’s loss, especially if the terms of the proposed settlement are severe. Brands usually have policies regarding financial claims, but negotiation is always a balancing act between getting what you want and what you need. Compensation for a valid loss is easier to justify than procedural penalties applied as deterrents. In some situations, such as natural disasters, the supplier may suffer a compounded loss and may not be able to meet the buyer’s financial demands.

The sourcing team must evaluate both sides of the problem – the buyer’s and the seller’s. If it seems that the buyer’s request for compensation is excessive, the negotiator has an obligation to advocate on the seller’s behalf, especially if the vendor has a longtime relationship with the brand and a previously good performance record. It may be counterproductive to punish suppliers disproportionately if the brand would benefit overall by continuing the relationship.

Ideally, the sourcing manager handling the negotiation would have already forged a close relationship with the factory’s owner or manager who is empowered to close the deal. You don’t want to meet the top person for the first time across an acrimonious negotiation table.

Build confidence during good times, so that when things go wrong, as they inevitably will in any long-term relationship, both sides know and trust the person they are talking to.

Working through settlements can be a character-building experience which can strengthen a relationship. Both sides learn who their friends are, who will support them when they’re down and who can deal with adversity openly and fairly. At the other extreme, settlement negotiations can be so rancorous or the problem so egregious that the only path forward is to sever the relationship.

The Corrective Action Plan: Trust But Verify After the dust settles – emotions have cooled off, proposals examined and selected, settlements negotiated and confirmed – there’s still work to be done. Your task now is to verify that your proposed action plan actually happens how and when you said it would.

Even though the pressure may be alleviated and you may be distracted by an incoming tide of new problems, stay with the solution to its completion. Hold regular follow-up sessions with your team and monitor checklists. Provide the impacted stakeholders with regular updates. A relapse or deterioration can change your status from hero to zero, from problem-solver to problem-creator. Don’t let your attention wander until everything you promised has been accomplished.

Catch-up with us next month when we explore the fourth chapter of ‘When things go wrong’ and discuss how to learn from the bad experience; the final chapter of Part One: Fundamentals.

Contact us & Social media

Tel Intl
+44 1527 573 618

Fax
+44 (0)1527 577423

Social media

Facebook
Twitter

Contact us

Tel Intl
+44 1527 573 618

Fax
+44 (0)1527 577423

Address

Aroq House,

17A Harris Business Park,

Bromsgrove,

Worcs,

B60 4DJ, UK

Social media

Facebook
Twitter

© 2019 All content copyright just-style.com | Registered in England No: 4307068.