EXPORT PROCEDURE & DOCUMENTATION
NANCY KRAFTS PVT. LTD.
A report towards the partial fulfilment of the requirements of the two year full time
Post Graduate Diploma in Management
Submitted by: Vikas Chauhan
Post Graduate Diploma in Management
Roll No: 2k11a38
ASIA PACIFIC INSTITUTE OF MANAGEMENT
3&4, Institunal Area, Jasola,New Delhi-110025
The purpose of industrial training is to acclimatize the students with the organization &
the industry in which this organization exist. Summer training is the part of management
study & it’s very important for each and every student.
Management trainees are trained in such a way that after they come out they can
manage the matter of organization in a planned and systematic manner. My project is
aimed at understanding the basis of export procedure and documentation. It’s includes
how an export order is processed & what all documents are required to complete the
legalities of the export order.
The training was the valuable experience in terms of understanding & learning & I
believe that in future ,I will get fulfilled result.
A project report seems to be an individual effort is in fact teamwork. Summer training
at Nancy Krafts Pvt. ltd. was just like an opportunity to shake hands with the practical
world of business.
I indebted all the individual who helped me in gaining knowledge and insights into
various aspects of export procedure and documentation. The sources of learning have
been one to many and a complete list of individual references would become
I want to express my deepest gratitude to Mr. Narinder Pal Singh ( Pali Singh) Managing
Director and CEO , Nancy Krafts Pvt. Ltd., without whose help this summer internship
in Nancy Kraft Pvt. Ltd. would not be possible.
I am grateful to Mr. Jitin Pal Singh, Director , son of Mr Pali Singh and his wife Mrs.
Harleen Chatwal for sharing his experience and knowledge and without whose help
project would not have got any shape.
I am very grateful to Mrs. Harpreet Dhaliwal, senior merchandiser, Mrs. Joli,
merchandiser.. whose helped my a lot during my learning.
I want to express my deepest gratitude to Prof. Arindam Banerjee who guided me to
making my project.
I hereby declare that the project report entitled “EXPORT PROCEDURE &
DOCUMENTATION” is the produce of my sincere efforts. This Summer Project is
being submitted by me alone at Asia Pacific Institute of Management , New Delhi, for
the partial fulfillment of the course PGDM , and the report is not submitted to any other
educational institutions or for any other purpose whatsoever.
This is to certify that the project “EXPORT PRODECURE AND DOCUMENTATION”
is the bonafide work carried out by Mr. VIKAS CHAUHAN, student of PGDM
(GENERAL), Asia Pacific Institute of Management, Delhi, during the year 20011-13, in
partial fulfillment of the requirements for the award of the PGDM, and that the project
has not formed the basis for the award previously of any degree, diploma, associate
ship, fellowship or any other similar title.
Signature of the Guide:
(Prof. Arindam Banerjee)
Place: New Delhi
Table of contents:
1) Executive summary.................................................................................................
2) Introduction. Of the company..........................................................................
3) Background of the problem task undertaken...................................................
4) Project objective.................................................................................................
5) Rationale of the study........................................................................................
6) Scope of the study.............................................................................................
8) Brief about the project........................................................................................
9) Objective Description………………………………………………………….
10) Merchandising and Role of Merchandiser in Nancy Krafts Pvt. Ltd…………
11) Documents procedure of Nancy Krafts Pvt. Ltd………………………………
FINDINGS AND INFERENCE...............................................................................
Recommendation to the company.............................................................
List of illustration
Figure 1 The “T” angle of the apparel supply chain..........................................
Figure 2 Fabric process flow chart..................................................................
Figure 3 Garments process flow chart............................................................
Figure 4 The PPC link with other department................................................
• This project is aim at understanding export procedure and documentation. It
begins with the introduction of the company i.e. company profile. This part
include introduction of the company its plant location, client base and some more
information of Nancy krafts.
• Next Chapter discuss the methodology used for the data collection. Exploratory
research is used for data collection as it best suited for this fulfilling the project
• Next chapter provides the detail on the objective, apparel business process. It’s
explained through the T angle apparel supply chain. Some slides of supply chain
i.e. buyer, supplier and the manufacturer are discussed.
• Next objective discusses a view of different department working in
synchronization in order to process an export order. The role of each department
is discussed in context of export procedure and documentation and what
contribution they make towards it.
• Next objective gives a brief idea on the merchandiser and what role they play.
They are the one who interact with the clients and update the company with
client’s requirements.They act as a liaison between company and the client.
• In the final objective a brief summary of all the export documents used at Nancy
Kraft Pvt Ltd. for legalizing an export order is given. Further the documents
regarding pre and post shipment procedure are discussed.
Introduction of the company
• Established in 1973
• A leading apparel export house in India.
• Reputed for excellent product development and design capacity.
• Narinder Pal Singh (Pali Singh) is the founder and CEO of the company.
• A leading manufacturer and exporter specialized in ladies and children
• Nancy Krafts Pvt.Ltd. manufacture and sell a wide range of highly
fashionable garments for top end customer in international market.
• the employs around 500 people.
• Nancy Krafts Pvt.Ltd. is located in C-11 Uttam Uagar East, New Delhi, India,
• Tunic , Kaftan , Shorts , Romper, Pants, Skirts etc. are manufactures in Nancy
• The company’s total turnover for the year ended 31 march 2011 was around
LOCATION OF THE PLANTS
The Company’s Plants are located at –
1. Fabric Dyeing and processing plant – C-11 East Uttam nagar new delhi-
2. Garment manufacturing plant - C-11 East Uttam nagar new delhi-110059 (India)
3. printing plant - Plot -C-12 East Uttam nagar new delhi-110059 (India)
4. Finishing plant - C-24 East Uttam nagar new delhi-110059 (india)
5. Embroidery plant C-28 East Uttam nagar new delhi-110059 (india)
NANCY KRAFT Capacities
Dyed Fabric 10.5 Tons per day
Mercerizing 2.5 Tons per day
Garment Washing & Dyeing
5000 Pcs per day
7000 Mts per day
8000 mts per day
More brief about Nancy Krafts Pvt.Ltd.
Ably led from the front by Mr.pali Singh ,son of Mr. Durlabh Singh, a retired army
officer, Nancy krafts has registered phenomenal growth over the last few years. That is
largely because of his pro-active thinking and vision driven approach. Mr Pali Singh, a
strict disciplinarian, is also the founder and the CEO of the company. His wife Balwinder
Pal Kaur (kitty), has been the source of his strength and she shares his vision for his
company. His son, Jitin Pal Singh has recently joined him to catapult the company
towards success with his fresh and innovative ideas. From the very beginning, the
development of in-house infrastructure, skills and competence has been the prime
concern of the company and the focus of his attention, and that is the reason why Nancy
Krafts has not only managed to consolidate its position worldwide but also stay at the
forefront of the Indian garments export industry.
The professionals who perform & deliver
The middle management of the company consists of highly professional designers,
merchandisers and experienced personnel. The well defined hierarchy of the company
ensure smooth day-to-day operations. In Mr. Pali Singh, they have a live wire and
dynamic professional who not only encourage them to perform and deliver but also bring
out the best in them. His long innings in the international garment business has given him
a tremendous insight and experience.
Redefining the dynamics of garment export
Since its inception in the year 1973, Nancy Krafts has been actively involved in the
manufacturing and export of high fashion quality garments for ladies and children to a
diverse range of discerning & quality conscious clients all over the world. Today, it
enjoys an enviable as well a formidable reputation in the fiercely competitive
international garment industry.
1*Moving in tune with changing technology.
The production line has the latest machines from the world known names like Juki,
Eastman, Barudan, Pegasus, Suprema, Tukatech etc. A notable addition is highly
sophisticated computerised embroidery machines in its embroidery section. In order to
cut down production load time, Nancy Krafts has installed the latest Tukatech
CAD/CAM System for accurate pattern making. The sampling section is co-ordinate by
its designers and foreign associates who are invited every month to design garments in
line with fashion forecasts.
2*Nancy Krafts workforce is the pillar of its strength.
An organization that believes in the capabilities of its people and looks after their
aspirations and is bound to succeed. At Nancy Krafts, its people are its prime motivators.
Their dedication and skills have helped it grow and prosper. The 500 strong workforce is
looked after well by the management . it is committed to stand by them through, thick
and thin. It is because of the unflinching dedication of its people that the company has
come this far. The company believes in rewarding its people when they walk that extra
mile to deliver the goods. And that too on time. The management of Nancy krafts has
taken initiative to provide airy, well-lit and air cooled working environment.
3*Concern for quality can be a catalyst for growth.
Quality is an integral and vital part of any manufacturing process today. More so in
garments because we tend to make a style and personality statement through them.
Quality is a tangible aspect of garments today. Therefore, maintaining it in garments is
vital. At Nancy Krafts, quality is what our garments are all about. Over the years, we
have evolved our fool-proof QC system at all.
4*Compatibility through self reliance.
Trained man-power, latest machinery, airy and well lit work environment and an efficient
work culture together constitute a process called-Compatibility through self reliance. This
process, at Nancy Krafts, has given it a head start over others in facing the challenges of
the future and expand its operations all over the world. This process is a must for every
company that seeks to stay ahead of the others. Moreover, the management of the
company has chalked out a well defined strategy and blue print for the future. It has
identified the markets to be tapped and more infrastructures that would need to be
deployed. Meanwhile, more technological up gradation is just round the corner.
5*Quantity without compromising quality.
It is often difficult to strike the right balance between quality and quantity. But for those
who have a reputation to keep, it is not much of a dilemma. At Nancy Krafts... quality
comes first and foremost. Over the years, it has enhanced its production capacity as well
as the quality of its goods. Besides the existing production capacity of the company, it’s
newly commissioned state-of-the –art unit produces more than 5000 garments per day.
The production process of this unit is governed by stringent quality control measures.
6*Nancy Krafts is shrinking the globe.
Today, Nancy Krafts is one large and growing family. Its clientele that patronises its
garments is spread across the world. The company is exporting its garments to Europe,
North America, South America, Australia ,brazil and some of African and Spanish
speaking country. Its clientele has now become a large family that shares good values of
business and the right way of conducting it. For many years now. It has been ably
supported by the State Bank of India. Its relations with its Bank have helped it expand
and grow. But then a dynamic company like Nancy Krafts is hardly the one to sit on its
laurels. It plans to grow more and shrink the globe even further.
7* Nancy Krafts Customers.
Nancy Krafts high profile customer are not only happy but also satisfied which has
earned them recognition and unflattering loyalty from prominent buyer worldwide.
el corte ingles Spain
forever 21 USA
Pink Apple USA
Blue Port Brazil
foschini South Africa
Background about the problem task undertaken
It’s an opportunity to do the summer internship in Nancy Krafts Pvt. Ltd. which is
manufacturer & exporter of knitted fabric and knitted garments. Project on export house
is uncommon and that on an Apparel Export House is rare.
As we know , Exporting is complex and challenging activity in today’s dynamic worlds
environment as it involves the performance or operation that determine existing and
potential demand in a market. Learning the step-by-step process and procedure to be
followed in an export contract is a critical activity in export procedure.
So selecting a project on export procedure and documentation is an obvious and
a. To understand the garments business processes.
b. To understand the working of various department of Nancy krafts Pvt. Ltd.
contributing towards processing of an export order.
c.To understand the role of merchandisers in Nancy Krafts Pvt.Ltd.
d.To study of export documentation in Nancy Krafts Pvt.Ltd.
Rationale of the study
Exporting in simple words means selling goods abroad or export refers to out flow of
goods and service and inflow of foreign exchange. Each country has its own rule and
regulations regarding the foreign trade. For the fulfilment of all the rules and regulations
of different countries and exporting company has to maintain and fulfilled different
documentation requirements. The documentation procedure depends on the type of
goods, process of manufacturing, type of industry and the country to which goods is to be
exported. In order to complete an order of making garments, many activities like
communication between different departments, the process of outsourcing raw material ,
payment process, quality control, packing and shipment of goods etc. are undertaken.
Different department work in synchronicity and various documents are prepared in the
process. Hence, a single mistake or lack of proper planning can be lead to the rejection of
the whole order or increase the cost.
Today’s world is a global village in which each country is trading with other countries in
form of export & import. This field has a great scope because today each company
whether it’s small or big wants to engage in foreign trade.
So, it is very important to study the export procedure and documents involved in it.
1.4) Scope of the study
The aim of this project is to unfold stepwise all complexities involved in the export
business right from receiving and export order to final realization of export proceeds. It
gives a detail idea of how different departments in an apparel export house work in
synchronization so that export order is processed.
The project would be helpful to fulfil many loopholes of manufacturing processing and
analyzing the export order as well as documentation.
Our primary objective of doing this project is to get the first hand knowledge of
functioning of export house. Since we are not comparing two different entities on the
basis of their financial results, rather we are learning the export procedure. Hence
exploratory research design is need of the hour.
*Further there are few reasons which made me to use Exploratory Qualitative
research. It’s not always desirable or possible to use fully structured or formal method to
obtain information from respondent.
* People may be unable and unwilling to answer certain questions or unable to give
*People may be unable to provide accurate answer to question that tap their sub
Thus, project research methodology is as followed.
*In primary data, Qualitative research through in-debt interview has been adopted. For
interviews non structured open-ended questions were used.
*In secondary data, both internal and external research was done for internal research
ready to use documents available with the organization were used. For external research
internet net website was consulted.
Limitations of the methodology:
1. Concern about the validity: the issue arises from the fact that qualitative research
does not rely on tests for reliability or credibility that are external to data collection and
2. Labour intensive data collection: It can be extremely time consuming. Data
collection is this labour intensive process the researcher immerses himself or herself to
build an understanding of the organization, through contract with the employees,
exposure to the norms and familiarity with their practices.
3. Conclusion and interpretation of qualitative research: They are primarily
communicated in a form of case study. The case study is written after an extensive
process of data collection through interviewing and participant observation.
4.Need for training in qualitative research: There is a need of training in qualitative
research methodology. Person have low knowledge in this field don’t go for such
BRIEF ABOUT THE PROJECT:-
The term export is derived from the conceptual meaning as to ship the goods and services
out of the port of a country. The seller of such goods and services is referred to as an
"exporter" who is based in the country of export whereas the overseas based buyer is
referred to as an "importer". In International Trade, "exports" refers to selling goods and
services produced in home country to other markets.
Any good or commodity, transported from one country to another country in a legitimate
fashion, typically for use in trade. Export goods or services are provided to foreign
consumers by domestic producers.
Export of commercial quantities of goods normally requires involvement of the customs
authorities in both the country of export and the country of import. The advent of small
trades over the internet such as through Amazon and e-Bay have largely bypassed the
involvement of Customs in many countries because of the low individual values of these
Nonetheless, these small exports are still subject to legal restrictions applied by the
country of export. An export's counterpart is an import.
In national accounts "exports" consist of transactions in goods and services (sales, barter,
gifts or grants) from residents to non-residents. The exact definition of exports includes
and excludes specific "borderline" cases. A general delimitation of exports in national
accounts is given below:
• An export of a good occurs when there is a change of ownership from a resident
to a non-resident; this does not necessarily imply that the good in question
physically crosses the frontier. However, in specific cases national accounts
impute changes of ownership even though in legal terms no change of ownership
takes place (e.g. cross border financial leasing, cross border deliveries between
affiliates of the same enterprise, goods crossing the border for significant
processing to order or repair). Also smuggled goods must be included in the
• Export services consist of all services rendered by residents to non-residents. In
national accounts any direct purchases by non-residents in the economic territory
of a country are recorded as exports of services; therefore all expenditure by
• Tourists in the economic territory of a country are considered as part of the
exports of services of that country. Also international flows of illegal services
must be included.
National accountants often need to make adjustments to the basic trade data in order
to comply with national accounts concepts; the concepts for basic trade statistics often
differ in terms of definition and coverage from the requirements in the national accounts:
• Data on international trade in goods are mostly obtained through declarations to
custom services. If a country applies the general trade system, all goods entering
or leaving the country are recorded. If the special trade system (e.g. extra-EU
trade statistics) is applied goods which are received into customs warehouses are
not recorded in external trade statistics unless they subsequently go into free
circulation in the country of receipt.
• A special case is the intra-EU trade statistics. Since goods move freely between
the member states of the EU without customs controls, statistics on trade in goods
between the member states must be obtained through surveys. To reduce the
statistical burden on the respondents small scale traders are excluded from the
• Statistical recording of trade in services is based on declarations by banks to their
central banks or by surveys of the main operators. In a globalized economy where
services can be rendered via electronic means (e.g. internet) the related
international flows of services are difficult to identify.
• Basic statistics on international trade normally do not record smuggled goods or
international flows of illegal services. A small fraction of the smuggled goods and
illegal services may nevertheless be included in official trade statistics through
dummy shipments or dummy declarations that serve to conceal the illegal nature
of the activities.
Our project was all about knowing export procedure, various documents involve in
export procedure and various governmental and non-governmental authorities involve in
export procedure. Our project also contained the process of manufacturing readymade
garments, i.e. from fabric cutting to packaging. Manufacturing garments involves
receiving the order of a garment till its shipment to end customer
To understand the apparel business process.
The textile and apparel supply chain accounts for a good share in terms of number of
companies and people employed. The apparel industry divided in to three main segments.
At the top of supply chain there are fibre (raw material) producers using natural or
synthetic material. Second segment of supply chain is the apparel manufacturing in
which fabric convert into garments with many process involved. The final segment is
the retailer who is responsible for making apparels available to consumers. The “T” angle
of apparel supply show how buyer, supplier and garments manufacturer are linked to
each other. There are two sides of the “T” i.e. left and right. The left side called the buyer
to the manufacturer and the right side is called the supplier to manufacturer. The two
horizontal are linked to each other through the vertical side i.e. the buyer and supplier are
link through apparel manufacturer.
The “T” angle demonstrates how information flows from buyer to apparel manufacture.
The information normally, sketches of the garments given by the buyer, are studied by
the manufacturer and according list of raw material required is made. The different
watch(standard for type of yarn, colour of the yarn and piece of accessories) are sent to
different supplier for development. The supplier developed and sends it to manufacturer
and which is forwarded to buyer. Once approved by buyer, the orders are placed with the
suppliers with approved samples. When the raw materials are received as per the
specifications given to the supplier, in house manufacturing starts with the production.
The different process of manufacturing results in the final garment product which is
finally dispatched to the buyer. The buyer then retails the same through stores to the
Figure 1: The “T” angle of Apparel Supply Chain.
Apparel Development of raw
Samples and Yarn
Fabric The Finishing
Production Manufacturer Packaging
Dyeing and Washing Cutting and Stitching
Description of the Buyer Side of the Apparel Supply Chain.
The buyer side is normally involved with designing of garments, production of samples,
order collection, apparel retail.
Designing of Apparel is either done in-house or contracted to design companies. The first
step in designing is the analysis of the consumer which the Company is targeting. The
apparel design is influenced by various parameters like other designer collection
presented in the fashion cities of the world, fashion reviews from earlier seasons, fashion
magazine also plays an important input for the design efforts and most important is the
feedback gained from the sales of the similar products that were developed earlier.
Prototype garments are made for design approval which consumes considerable amount
Production of samples and order collection
The next step after the design in apparel supply chain is the production of the samples.
Once the designs are developed, decisions regarding the fabric like cotton or polyester
and quantity etc are made. Based on fabric and quantity decided, decisions related to
country and manufacturers are made. Once decision is made, developed designs are sent
to different manufacturers and are asked to develop proto samples (the stage brings
design from paper to cloth for design appearance). Normally, during proto stage
manufacturer figure stands between 5 and 8. Once proto are developed, number of
manufacturers is reduced to 2 to 3 depending on the total quantity of the article and also
on selected manufacturer production capacity or volumes. The order quantities are placed
to different manufacturers and manufacturer is asked to develop size-sets (alternate sizes
of the garment are developed example XS: Extra small, S: Small, M: medium , L: Large,
XXL: Extra Extra Large). Once size-set is approved, sale samples (samples developed for
advertising and see the market response towards the article) are made. Finally, with
everything in place two identical pieces are developed one for the buyer and other for the
manufacturer called as sealer (sealer sample is identification or standard for production).
This sample is stamped by the buyers and the manufacturer can proceed with the
Apparel products are made available to consumers in a variety of retail outlets. Specialty
stores offer a limited range of apparel products and accessories specializing in a specific
market segment. Apparel sales also take place through wholesalers or mass
merchandisers such as Wal-Mart, Kmart and Target. These retailers offer a variety of
hard and soft goods in addition to apparel. Departmental stores like Macy’s, Nordstrom
offer a large number of national brands in both hard and soft goods categories. Off-price
stores, such as Marshall’s and T.J.Maxx buy excess stock of designer- label and branded
apparel from retailers and are able to offer lower prices but with incomplete assortments.
The apparel sale is also shared by mail order companies, e-tailers through internet, and
factory outlets etc.
2.1.2) Description of the Supplier Side of the Apparel Supply Chain
The suppliers in the apparel manufacturing are quite diversified. It involves suppliers of
different raw materials such as fibre and yarn producers, fabric manufacturers and other
Fabric and Yarn Production
Fabric are categorized into two groups: natural and man-made. Natural fabric includes
plant fabric such as cotton, linen, jute etc and animal fabric such as wool. Synthetic fabric
includes nylon, polyester, acrylic etc. Synthetic fabric production usually requires
significant capital and knowledge. Natural and synthetic fabrics of short lengths are
converted into yarn by “spinners”, “thrusters” and “texturizers”. Different types of fabrics
can also be blended together to produce yarn such as grindle etc.
2.1.3)Description of the Manufacturer Side of the Apparel Supply
This segment of supply chain transforms the yarn into fabric by different processes such
as weaving, knitting a non-woven process. In a weaving process, yarns are looped
together lengthwise and width wise at right angles. Grey Yarn may be woven by a simple
procedure to produce grey fabric and which are then dyed for a specific colour. Instead,
dyed yarns may also be woven but not dyed. In knitting, yarn is interloped by latched and
spring needles i.e. two different loops are mingled together with needle adjustment.
Once the approvals regarding the raw-material are made by the buyer, the manufacturer
can proceed with the production.
The process proceeds once the fabric is produced; it is either dyed or washed. The dyed
(coloured) yarn fabric is washed and grey fabric is dyed into a specific colour. After
dyeing or washing, fabric is finished by removing water in the tumbler and later pressed
in stenter which also maintains width of the fabric. Now the fabric is ready for
garmentising i.e. it is ready to be cut and stitched into the garment. Garmentising starts
with the design of the garment to be made (usually on the paper called specs). Patterns
(usually made up of thicker and stronger paper) are made from the design which is then
used to cut the fabric (cutting usually happens in the form of layers). An efficient layout
of the patterns on the layers of fabric is crucial for reducing the wasted material.
CAD systems are used for pattern lay out and are integrated together with cutting
systems. In apparel manufacturing, all the stages are labour intensive as they are not
suitable for any kind of automation. In the stitching section, garment is usually assembled
using the progressive bundle system (PBS). In PBS, the work is delivered to individual
work stations from the cutting department in bundles. Sewing machine operators then
process or sew them in batches i.e. first few are operation are joining the different parts
together and then further amendments related to design are carried out. The supervisors
direct and balance the line activities and check the quality. This involves large work in
progress (WIP) inventories and minimal flexibility. For faster apparel production, use of
unit production system which reduces the buffer sizes between the operations or modular
assembly systems and allows a small group of sewing operators to assemble the entire
Finishing, Packaging and Dispatch of Apparel
Garments produced are labelled, packaged and usually shipped to a warehouse. The
garments are then shipped to the retailers’ warehouse. In an effort to reduce time from
placement of the product order to the consumer’s purchase of the apparel, several
practices are gaining popularity. There is increased automation and use of electronic
processing in the warehouses of both manufacturers and retailers.
To understand the working of various departments of NANCY KRAFTS PVT LTD
contributing towards processing of an export order.
Manufacturing Process and Production ( Garment Process Flow Chart)
Fabric Audit Batch wise – Physical Parameters, Trims Matching
The above two diagrams show detailed picture of NANCY KRAFTS PVT LTD Apparel
Manufacturing and Supply Chain. The manufacturer supply chain starts when yarn is in-
house and ends when garment is produced and is ready for dispatch. The entire process is
divided into two segments i.e. the process and the production. The process involves yarn
inspection, dyeing or washing and finishing. In the process, the yarn is converted to fabric
then it is either dyed or washed and finally finished. The production involves fabric cutting,
stitching, and garment being finished and finally dispatched.
2.2.2) NANCY KRAFTS PVT LTD: Departments Functions and Operations
Company mainly deals in two segments of the apparel supply chain i.e. one
manufacturing of fabric and other manufacturing of garment. These two segments are
two different processes but are very much linked in the supply chain. The Company has
different departments each having specified functions and responsibilities. Description of
each department will follow in respect to how they occur in supply chain:
Yarn (thread) is one of the most important raw-materials for the garment manufacturing.
Company purchases yarn from other spinning mills across the country and also
sometimes from other countries such as China and Italy. Yarn department is responsible
for placing order of yarn to the mills. Their responsibility is to make sure yarn is ordered
from right supplier, delivered in right time with desired quality and maintain stock listing
of yarn. Yarn department is also responsible for checking the quality i.e. strength, colour
and quantity of the yarn delivered. The decision regarding the yarn quantity, quality and
strength is decided by PPC i.e. production, planning and control department. PPC places
the order one month in advance.
Washing and Dyeing Department
The department is responsible for two different stages in garment manufacturing. For
grey (not coloured) fabric, department is responsible for colouration of fabric and for
dyed (coloured) fabric, department is responsible for washing. The process of dyeing is
time consuming and as different colour checks are required. The department receives
order from the PPC stating article and quantity required. The department makes the
production plan for the dyeing and the washing machine based on order from the PPC
and also sends request to knitting department for the dispatch of the fabric. Planning is
done on weekly basis.
This department is responsible for printing different designs of print and different type of
prints i.e. permanent print or ordinary print. Ditsy print and khadi print is also used for
The department is responsible for finishing of the fabric with a proper procedure so that it
is ready for garment production. Whether the fabric is dyed or washed, it follows the
same process in the finishing department. Once the fabric is washed or dyed, it needs to
be tumbled in tumbler (sort of big washing machine) responsible for removing water and
maintain the fabric width and shrinkage. After which fabric is dried in a Stenter (dryer)
and packed in layer and is ready for garment production. The finishing departments
receive orders from PPC again stating the article or style number and the quantity.
The department sends the fabric to the mentioned cutting section.
The department is responsible for cutting of the fabric into different parts of the garment.
This department is mainly responsible for cutting and avoiding wastage. To ensure
minimum wastage, proper set of tools such as CAD and others are used in the process.
The PPC by using CAD and other tools issues article average with a draft or diagram of
how different patterns should be placed on to the layer. The cutting department based on
their experience and expertise either accepts the proposed average or sometimes gives a
better average by few percent. The department makes production plan for all cutting
stations based on article or style requested. This also works on weekly basis. Once fabric
is cut different parts of the same garment are bundled together.
The department is responsible for stitching different parts of garment together. The
process takes place in the assembly line system. The assembly line system is the set of
many different stitching machines each for a specific purpose. These machines are
arranged in an orderly fashion depending on how different parts of garment should be
attached. Assembly line method is used for large production. PPC decides on the article
or style to be produced with quantity. The stitching department makes necessary
production planning i.e. time line in accordance with each article. The stitching process is
the most time consuming and labour intensive process in the entire garment production.
The planning is done weekly.
Finishing and Packaging Department
This is final stage before the garment is ready to be shipped. As the garment is already
finished, it requires a series of quality checks. The garment goes through the quality
checks like colour test, washing test, stitching test etc. After which it is steam pressed,
labeled, packed into garment bags and finally, put into the cartons. Once all cartons are
packed and labeled, external quality check takes place and goods are shipped. The PPC
department gives the details of the PO to be finished, packed and dispatched.
Production Planning and Control (PPC) Department
The department is responsible for making plans for the entire organization i.e. all the
departments. PPC being in the centre of all departments also controls their functionality.
The PPC sends production plan to different departments on weekly basis and daily for
any amendments. The PPC keeps check on different departments by requesting planning
and production reports for each day. PPC only receives orders from the Management.
With order quantity and dispatch date, it does the planning for product cycle. The top
management is in continuous contact with PPC.
To understand the role of Merchandisers in NANCY KRAFTS PVT
2.3.1) Merchandising Department
The department acts as a liaison between the buyer and manufacturing division. On one
hand, the department is responsible for notifying changes in the product to the PPC and
also to make sure that article is produced as per planning by the PPC and within dispatch
time limits. On the other hand, it has to continually update buyer with planning and
production status. The department takes care of all correspondence with buyer and is
responsible for communicating it to PPC. The department also takes care of necessary
sampling such as proto, size set and final which is necessary prior to production.
Designing is an integral part of the marketing process. The Company’s ability to keep
abreast of the dynamic fashion trends enables it to showcase its capabilities and
understanding the buyers’ requirements. Being an export oriented apparel manufacturer,
tracking the changing fashion trends across different geographies for various end
customers is critical for success. The Company has a well equipped design studio.
NANCY KRAFTS employs a team of designers who design and develop the products as
per the requirements of the customers. They regularly visit International fairs like PITTI
FILATI, EXPOFIL and PREMIERE VISION. These fairs determine the latest trends in
yarn / fabric and colours for the following season. The design team regularly interacts
with the customers which helps it to keep pace with their expectations. Besides, the
Company has opened a Product Development and Sales office at US.
The Apparel trade has four basic seasons;
The Company’s marketing team endeavors to enhance its share of the business with
existing customers as well as expand the customer base. The Company receives orders
from customers by:
Growth in business from existing customers
New customers developed through cold calls, trade fair meetings
The Company’s experienced marketing team has been able to devise different strategies
to suit the needs of both existing & new buyers. For the existing buyers, the Company’s
prime focus is to expand the product base and enhance volumes. By leveraging the long
standing relationships with the buyers, the Company strives to be a preferred partner to
the buyers. For the new buyers, based on the understanding of their product range and
brand identity / customer identity, the Company presents to them the entire product
range. This gives them a good idea of areas of the Company’s expertise and capabilities.
Sometimes the buyers come to NANCY KRAFTS with their thoughts on designs, where
they offer their suggestion on modifications. In case where they come to NANCY
KRAFTS with a predetermined design requirement, they also try to add value by
suggesting modifications to enhance functionalities or appeal, or to reduce costs while
retaining the existing design. NANCY KRAFTS designers along with the sampling
department provide the client with prototypes, which undergo various alterations till the
client, finalizes the design. Once the buyer finalizes a particular style it is translated into
samples as quickly as possible because the entire season’s business depends on timely
delivery of samples. The costing exercise is done concurrently at this stage. NANCY
KRAFTS manufacturing scale and efficiency and global sourcing ability enables
NANCY KRAFTS to compete with international vendors effectively. This is proven by
the growth of the Company in non-quota categories, where competition has already been
open without any quota related barriers. Quality and ability to deliver the required
products on time and competitive pricing enables to enhance share with customers. The
merchandising teams are to service the requirements of different customers. On receipt of
the enquiry, the merchandiser coordinates with PPC to get an estimate of the raw material
consumption, likely suppliers and costs, accessories as well as the conversion efforts.
Based on this, the costing sheet is prepared. Modifications are also suggested on apparel
design or engineering, or fabric to try and bring the cost to the buyer within their required
range. The price setting process thus becomes a collaborative effort with Company’s
customers instead of just a negotiation process, with both the Company and buyer
working together to meet a common objective. Therefore, whenever a prospective buyer
places his requirement with the company, company can work out an optimal price-quality
combination for him through permutation and combination of quality & source of raw
materials, along with design.
Role of merchandiser
What is merchandiser?
Merchandiser is an integral part of the fashion domestic and export industry, and It plays
a vital role at every level right from product development to marketing and to
commercialisation of fashion apparel, which creates required volumes and business
growth for the industry.
What is the role of merchandiser?
Product development and designing is mainly done in interaction with designers, buyers
and fashion consultants, fabric and accessories suppliers. Product commercialisation is
the main key role and is mainly done in interaction with buyers to make product reach up
to the level of retail industry which makes fashion product successful.
Detailed role of fashion merchandiser?
A fashion merchandiser (also referred to as a buyer or merchant) plays an important role
in any industry. A merchandiser occupies both creative and financial roles. Although it is
subjective different companies may assign different types of responsibilities to a
merchandiser. Some of the role as below:-
(A)Product buying responsibilities
A fashion merchandiser is responsible for selecting the merchandise that will sell in
domestic and export market. This merchandise must be in alignment with the company’s
brand image. The merchandiser must choose trend-right merchandise that is also
appropriate for the target customer’s fashion level. This requires knowledge of current
and future fashion trends both high-fashion from the runway and mass-market trends.
(B) Financial accountability
Meeting financial objective (given budget) is the primary component of a fashion
merchandiser’s jab. The merchandiser must maintain at least maximum profitability by
meeting certain financial plans set for each season or each order. All merchandise bought
must be appropriate for the customer and offered at a reasonably good yet profitable
price. A merchandiser’s performance review will be partially based on the profit margin
reached, rates of merchandise turnover and successful sales volume.
(C) Customer knowledge
In order to offer an appealing product, a merchandiser must be intimately familiar with
the needs and wants of the target customer. This is accomplished by spending time with
the buyers visit in stores. A merchandiser should research fashion trends, read trend
newspaper, and follow the semi-annual runway shows. A merchandiser should also spend
time in competitor’s stores, study other retailer’s merchandise and track when they
deliver new product in the market.
(D) Visual merchandising
Visual merchandising means the display of product in stores, including presentation.
When buying goods, a merchandiser must Always think of how items will be shown in
stores. This involves determining which type of fixtures and folding methods will be
necessary to properly house merchandised. Visual merchandising is important because
sales can be negatively affected if items are not displayed correctly.
Administrative work isn’t the most exciting of tasks that a merchandiser must perform,
but it is essential. A great deal of people management and proper paperwork is necessary
to take a product from its initial concept of arrival to buyers place and finally in the store
to the consumer. A buyer may file product specification with measurements sheet, buy
sheets, purchase orders, price ticket information and marketing materials. All must be
completed with an extreme attention within given time frame.
It is essential for a merchandiser to communicate with the buyers regarding the product
or the order. Merchandiser should to go through the message received from the buyer
and reply on time. In many cases, merchandisers have to provide the status report to the
buyers. Also, merchandiser has to communicate with the people that are in house,
vendors, contractors and job workers. Only through the right communication and with
time management merchandiser can meet deadline for the concerned product and the
To understand the Export Procedure in NANCY KRAFT PVT LTD.
It is essential that a person engaged in international trade be aware of the various
procedures involved. The business of exports is heavily document-oriented & one must
get acquainted with the entire procedure. Failure to comply with documentary
requirement may lead to financial loss.
• On receiving the requisition & purchase order from merchant, documentation
department issues an invoice. Two invoices are prepared i.e. commercial invoice
& custom invoice. Commercial invoice is prepared for the buyer & Custom
invoice is prepared for the Custom authorities of both the countries.
• Packing list is prepared which details the goods being shipped.
• GSP certificate is prepared if the consignment is exported to EU or countries
mentioned in the GSP list.
• Buying house inspects the goods & issues an inspection certificate.
• Certificate of origin is also issued and attached, if required.
• Following documents are given to Customs for their reference:
• Custom Invoice
• Packing list
• IEC certificate
• Purchase Order or L/C, if required.
• Custom annexure
• On receipt of above documents, customs will issue clearance certificate.
• After custom clearance a set of documents with custom clearance receipt are
sent along with the consignment to the forwarder. Forwarder books the
shipment & as per the size of the cartons calculates CBM & decides which
container to be used.
• Following documents are sent to buying house for their reference, as per
• Packing List
• GSP (if exports to Europe)
• Certificate of Origin (if required)
• Wearing Apparel sheet
• A copy of FCR/ Airway Bill/ Bill of Lading
• Buying house then intimates the buyer about the shipment & gives the details
regarding it. Buying house will send a set of these documents to the buyer.
• Buyer collects the consignment from the destination port by showing the
• Packing List
• Bill of lading/ FCR/ Airway Bill
• On shipment of goods, exporter will send the documents to the
• A foreign buyer will make the payment in two ways:
• TT ( telegraphic transfer) i.e. Wire Transfer – (Advance payment, as per the
clause – 50% advance & remaining 50% on shipment)
• Letter of Credit
• If the payment terms are a confirmed L/C then the payment will be made by
the foreign bank on receiving the following documents:
• Packing list
• Any other required by the buyer or the country of import.
The payment terms can be:
• At Sight
• Within 15 days from Bill of Lading or Airway Bill date.
• Within 30 days from Bill of Lading or Airway Bill date.
• Within 60 days from Bill of Lading or Airway Bill date.
• Within 90 days from Bill of Lading or Airway Bill date.
• After shipment, exporter sends the documents to the buyer’s bank for payment.
As the buyer’s bank receive the documents it will confirm with the buyer for
release of payment. On confirmation, it will make the payment in the foreign
currency. The transaction will be Bank to Bank.
• The domestic branch will credit the exporter’s account, as against the respective
purchase order or invoice, in Indian rupees by converting the foreign currency as
per the current bank rate.
• If the payment is through wire transfer, the payment will be made as per the terms
agreed by the exporter (Advance payment, as per the clause – 50% advance &
remaining 50% on shipment).
2.4.3) Export Documents: An export trade transaction distinguishes itself from a
domestic trade transaction in more than one way. One of the most significant variations
between the two arises on account of the much more intensive documentation work. The
documents mentioned in the pre & post shipment procedure are discussed below:
1. Invoice: An invoice or bill is a commercial document issued by a seller to the buyer,
indicating the products, quantities, and agreed prices for products or services the seller
has provided the buyer. An invoice indicates the buyer must pay the seller, according to
the payment terms. The buyer has a maximum amount of days to pay these goods and are
sometimes offered a discount if paid before.
In the rental industry, an invoice must include a specific reference to the duration of the
time being billed, so rather than quantity, price and discount the invoicing amount is
based on quantity, price, discount and duration. Generally speaking each line of a rental
invoice will refer to the actual hours, days, weeks, months, etc being billed.
From the point of view of a seller, an invoice is a sales invoice. From the point of view of
a buyer, an invoice is a purchase invoice. The document indicates the buyer and seller,
but the term invoice indicates money is owed or owing. In English, the context of the
term invoice is usually used to clarify its meaning, such as "We sent them an invoice"
(they owe us money) or "We received an invoice from them" (we owe them
money).Invoice are of 3 types:
a. Commercial invoice: A commercial invoice is a document used in foreign trade. It
is used as a customs declaration provided by the person or corporation that is exporting
an item across international borders. Although there is no standard format, the document
must include a few specific pieces of information such as the parties involved in the
shipping transaction, the goods being transported, the country of manufacture, and
the Harmonized System codes for those goods. A commercial invoice must also include a
statement certifying that the invoice is true, and a signature.
A commercial invoice is used to calculate tariffs, international commercial terms (like the
Cost in a CIF) and is commonly used for customs purposes. Normally, the invoice is
prepared first, & several other documents are then prepared by deriving information from
b. Consular invoice: It is certification by a consul or Government official covering
an international shipment of goods. It ensures that exporter’s trade papers are in order &
the goods being shipped do not violate any law or trade restrictions.
c. Customs invoice: It is an invoice made on specified format for the Custom officials
to determine the value etc. as prescribed by the authorities of the importing country.
2. Packing list: A shipping list, packing list, waybill, packing slip (also known as a bill
of parcel, unpacking note, packaging slip, (delivery) docket, delivery
list, manifest or customer receipt, is a shipping document that accompanies delivery
packages, usually inside an attached shipping pouch or inside the package itself. It
commonly includes an itemized detail of the package contents and does not include
customer pricing. It serves to inform all parties, including transport agencies, government
authorities, and customers, about the contents of the package. It helps them deal with the
package accordingly. It shows the details of goods contained in each parcel / shipment.
Considerably more detailed and informative than a standard domestic packing list, it
itemizes the material in each individual package and indicates the type of package, such
as a box, crate, drum or carton. Both commercial stationers and freight forwarders carry
packing list forms.
3. Certificate of Inspection: – Pre-shipment inspection, also called pre
shipment inspection or PSI, is an important and reliable quality Control method for
checking goods' quality while clients buy from the suppliers.
After ordering a number of articles, the buyer lets a third party control the ordered goods
before they are dispatched to him. Normally an independent inspection company is
assigned with the task of the PSI, as it is in the interest of the buyer that somebody not
connected with the deal in any way verifies the amount and quality. This way the buyer
makes sure, he gets the goods he paid for.
Although increasing numbers of clients would like to collect suppliers' information from
the Internet, this contains high risks because it is not a face-to-face transaction, and
Internet phishing and fraud can corrupt it. Pre-shipment inspection can greatly avoid this
risk and ensure clients get quality products from suppliers.
The pre-shipment inspection is normally agreed between a buyer, a supplier, and a bank,
and it can be used to initiate payment for a letter of credit. A PSI can be performed at
Checking the total amount of goods and packing
Controlling the quality and/or consistency of goods
Verifying compliance with the standards of the destination country (e.g. ASME or
The first stage is often performed by the transport company, but for the latter two stages a
proper inspection company is needed. Similarly, if between the buyer and seller money
transfer via a letter of credit is agreed upon, it is necessary to assign a reputable
inspection company. In case of the letter of credit, after inspection of the goods, an
inspection certificate is sent to the bank issuing the letter of credit and the buyer,
initiating the money transfer. Inspection companies are classified in two classes:
- Free-market companies: These are privately owned companies, which sell their services
to the market. Danger with these might be, especially if it is a smaller company, that they
might be paid as well by the manufacturer, thus working in his interest.
- State owned inspection companies: Only very few companies operating on the
market are state-owned or partly state-owned. The shareholding of governmental
institutions guarantees the independence and objectivity.
A higher form of the PSI is called expediting, in this the dates of delivery and the
production are controlled as well.
Some countries, like Botswana require PSIs for all goods entering the country in order to
fight corruption. In these cases the PSI must be performed by the company designated by
4. Certificate of Origin:- A Certificate of Origin (often abbreviated to CO or COO)
is a document used in international trade. It traditionally states from what country the
shipped goods originate, but "originate" in a CO does not mean the country the goods are
shipped from, but the country where the goods are actually made. This raises a definition
problem in cases where less than 100% of the raw materials and processes and added
value are not all from one country. An often used practice is that if more than 50% of the
cost of producing the goods originate from one country, that country is acceptable as
the country of origin (then the "national content" is more than 50%). In various
international agreements, other percentages of national content are acceptable. This
document has a dedicated equivalent for the (international) trade in the economic service
of electricity called Guarantee of origin.
When countries unite in trading agreements, they may allow Certificate of Origin to state
the trading bloc as origin, rather than the specific country.
The document may be issued by the exporter or be confirmed by another party in the
exporting country, such as a notary, a chamber of commerce, or a local consulate of the
destination country. In many cases specific government-issued documents are required,
such as for shipments under the North American Free Trade Agreement, or for
preferential customs treatment in importing countries for shipments of
processed/manufactured goods from less developed countries to developed ones (often
referred to as the green CO form "A", or GSP (Generalized System of Preferences) Form
The CO is primarily important for classifying the goods in the customs regulations of the
importing country, thus defining how much duty shall be paid. But it may also be
important for import quota purposes and for statistical purposes, and especially for food
shipments, it may also be important for health regulations.
Before concluding a transaction, the exporter and importer should always clarify whether
a CO is required, and if so, agree on exactly the form and content of the CO.
A preferential certificate of origin is a document attesting that goods in a particular
shipment are of a certain origin under the definitions of a particular bilateral or
multilateral free trade agreement (FTA). This certificate is required by a
country's customs authority in deciding whether the imports should benefit from
preferential treatment in accordance with special trading areas or customs unions such as
the European Union or the North American Free Trade Agreement (NAFTA) or before
anti-dumping taxes are enforced.
The definition of "Country of Origin" and "Preferential Origin" are different.
The European Union for example generally determines the (non-preferential) origin
country by the location of which the last major manufacturing stage took place in the
products production (in legal terms: "last substantial transformation").
Whether a product has preferential origin depends on the rules of any particular FTA
being applied, these rules can be value based or tariff shift based. The FTA rules are
commonly called "Origin Protocols".
The Origin Protocols of any given FTA will determine a rule for each manufactured
product, based on its HTS (Harmonized Tariff Schedule) code. Each and every rule will
provide several options to calculate whether the product has preferential origin or not.
Each rule is also accompanied by an exclusion rule that defines in which cases the
product cannot obtain preferential status at all.
A typical value based rule might read: raw materials, imported from countries that are not
members of this FTA, used in production do not make up for more than 25% of the Ex-
Works value of the finished product.
A typical tariff shift rule might read: none of the raw materials, imported from countries
that are not members of this FTA, used in production may have the same HTS code as the
The certificate of origin must be signed by the exporter, and, for a small number of
countries, also validated by a Chamber of Commerce or local consulate of the destination
country and notarized.
Chambers of Commerce offer certificate of origin services, but their letterhead certificate
is still only legalized by another person, such as a notary public. Companies may consult
the WCN Chamber of Commerce Directory to find their nearest chamber who may offer
. Certificate of origin is required when: -
• The goods produced in a particular country are subject to’ preferential tariff rates
in the foreign market at the time importation.
• The goods produced in a particular country are banned for import in the foreign
5. GSP:- The Generalized System of Preferences, or GSP, is a formal system of
exemption from the more general rules of the World Trade Organization (WTO),
(formerly, the General Agreement on Tariffs and Trade or GATT). Specifically, it's a
system of exemption from the most favored nation principle (MFN) that obliges WTO
member countries to treat the imports of all other WTO member countries no worse than
they treat the imports of their "most favored" trading partner. In essence, MFN requires
WTO member countries to treat imports coming from all other WTO member countries
equally, that is, by imposing equal tariffs on them, etc.
GSP exempts WTO member countries from MFN for the purpose of lowering tariffs for
the least developed countries (without also doing so for rich countries). The idea of tariff
preferences for developing countries was the subject of considerable discussion
within UNCTAD in the 1960s. Among other concerns, developing countries claimed that
MFN was creating a disincentive for richer countries to reduce and eliminate tariffs and
other trade restrictions with enough speed to benefit developing countries.
In 1971, the GATT followed the lead of UNCTAD and enacted two waivers to the MFN
which permitted tariff preferences to be granted to developing country goods. Both these
waivers were limited in time to ten years. In 1979, the GATT established a permanent
exemption to the MFN obligation by way of the enabling clause. This exemption allowed
contracting parties to the GATT (the equivalent of today's WTO members) to establish
systems of trade preferences for other countries, with the caveat that these systems had to
be "generalized, nondiscriminatory and nonreciprocal' with respect to the countries they
benefited (so-called "beneficiary" countries) Countries were not supposed to set up GSP
programs that benefited just a few of their "friends.'
From the perspective of developing countries as a group, GSP programs have been a
mixed success. On one hand, most rich countries have complied with the obligation to
generalize their programs by offering benefits to a large swath of beneficiaries, generally
including nearly every non-OECD member state. Certainly, every GSP program imposes
some restrictions. The United States, for instance, has excluded countries from GSP
coverage for reasons such as being communist (Vietnam), being placed on the U.S. State
Department's list of countries that support terrorism (Libya), and failing to respect U.S.
intellectual property laws.
But more significant is that most GSP programs are not completely generalized with
respect to products. That is, they don't cover products of greatest export interest to low-
income developing countries lacking natural resources. And this is by design. In the
United States and many other rich countries, domestic producers of "simple"
manufactures, such as textiles, leather goods, ceramics, glass and steel, have long claimed
that they could not compete with large quantities of imports. Thus, such products have
been categorically excluded from GSP coverage under the U.S. and many other GSP
programs. Unfortunately, these excluded products are precisely the kinds of manufactures
that most developing countries are able to export. (Most developing countries cannot
efficiently produce things like locomotives or telecommunications satellites, but they can
Even in the face of its limitations, it would not be accurate to conclude that GSP has
failed to benefit developing countries. Rather, it is the case that GSP has benefited some
developing countries a lot and others very little. Specifically, for most of its history, GSP
has benefited "richer developing" countries - in early years Mexico, Taiwan, Hong
Kong, Singapore, and Malaysia, more recently Brazil and India - while providing
virtually no assistance to the world's least developed countries, such as Haiti, Nepal, and
most countries in sub-Saharan Africa. The U.S., however, has closed some of these gaps
through supplemental preference programs like the African Growth and Opportunity
Act and a newer program for Haiti, and Europe has done the same with Everything But
More generally, since the early 1990s a historic change affecting developing countries
has occurred within the WTO. Namely, WTO rules have been extended to cover both
textiles and agricultural products. For nearly all of the WTO's (and GATT's) existence,
which started in 1948, textiles and agricultural products were excluded from WTO/GATT
coverage because they were so sensitive to GATT's primary promoters, the United States
and Europe. But now that situation has changed. Under new WTO rules, many textiles
tariffs and quotas already have been eliminated, and liberalization of trade policy also is
occurring on the complex agricultural front. Given that textiles and agricultural products -
especially processed agricultural products, such as flour as opposed to wheat - are the
main products that many of the world's least developed countries are able to export
competitively and lucratively, these and similar changes at the WTO may someday mean
that the limitations of GSP programs will be resolved - outside of the rubric of GSP itself.
It certifies that the goods being exported have originated/ been manufactured in a
particular country. It is mainly useful for taking advantage of preferential duty
concession, if available. It is applicable in countries forming European Union.
6. IEC Certificate: It is an Import-Export Code Certificate issued by DGFT, Ministry
of Commerce, Government of India. It is a 10 digit code number. No exports or imports
will be effected without the IEC code. It is mandatory for every exporter.
7. Wearing Apparel Sheet: It is like a check list which gives the detail regarding
the content & design of the garment packed.
8. Bill of Lading: A bill of lading (BL - sometimes referred to as BOL or B/L) is a
document issued by a carrier to a shipper, acknowledging that non specified goods have
been received on board as cargo for conveyance to a named place for delivery to
the consignee who is usually identified. A through bill of lading involves the use of at
least two different modes of transport from road, rail, air, and sea. The term derives from
the verb "to lade" which means to load a cargo onto a ship or other form of transportation.
A bill of lading can be used as a traded object. The standard short form bill of lading is
evidence of the contract of carriage of goods and it serves a number of purposes:
• It is evidence that a valid contract of carriage, or a chartering contract, exists, and
it may incorporate the full terms of the contract between the consignor and the
carrier by reference (i.e. the short form simply refers to the main contract as an
existing document, whereas the long form of a bill of lading (connaissement
integral) issued by the carrier sets out all the terms of the contract of carriage;
• It is a receipt signed by the carrier confirming whether goods matching the
contract description have been received in good condition (a bill will be described
as clean if the goods have been received on board in apparent good condition and
stowed ready for transport); and
• It is also a document of transfer, being freely transferable but not a negotiable
instrument in the legal sense, i.e. it governs all the legal aspects of physical
carriage, and, like a cheque or other negotiable instrument, it may be endorsed
affecting ownership of the goods actually being carried. This matches everyday
experience in that the contract a person might make with a commercial carrier like
FedEx for mostly airway parcels, is separate from any contract for the sale of the
goods to be carried; however, it binds the carrier to its terms, irrespectively of
who the actual holder of the B/L, and owner of the goods, may be at a specific
The BL must contain the following information:
Name of the shipping company;
Flag of nationality;
Order and notify party;
Description of goods;
Gross/net/tare weight; and
Freight rate/measurements and weighment of goods/total freight
While an air way bill (AWB) must have the name and address of the consignee, a BL
may be consigned to the order of the shipper. Where the word order appears in the
consignee box, the shipper may endorse it in blank or to a named transferee. A BL
endorsed in blank is transferable by delivery. Once the goods arrive at the destination
they will be released to the bearer or the endorsee of the original bill of lading. The
carrier's duty is to deliver goods to the first person who presents any one of the original
BL. The carrier need not require all originals to be submitted before delivery. It is
therefore essential that the exporter retains control over the full set of the originals until
payment is effected or a bill of exchange is accepted or some other assurance for payment
has been made to him. In general, the importer's name is not shown as consignee. The bill
of lading has also provision for incorporating notify party. This is the person whom the
shipping company will notify on arrival of the goods at destination. The BL also contains
other details such as the name of the carrying vessel and its flag of nationality, the marks
and numbers on the packages in which the goods are packed, a brief description of the
goods, the number of packages, their weight and measurement, whether freight costs
have been paid or whether payment of freight is due on arrival at the destination. The
particulars of the container in which goods are stuffed are also mentioned in case of
containerized cargo. The document is dated and signed by the carrier or its agent. The
date of the BL is deemed to be the date of shipment. If the date on which the goods are
loaded on board is different from the date of the bill of lading then the actual date of
loading on board will be evidenced by a notation the BL. In certain cases a carrier may
issue a separate on board certificate to the shipper.
9. Airway Bill: The Air Waybill (AWB) is the most important document issued by a
carrier either directly or through its authorized agent. It is a non-negotiable transport
document. It covers transport of cargo from airport to airport. By accepting a shipment an
IATA cargo agent is acting on behalf of the carrier whose air waybill is issued.
AWBs have eleven digit numbers which can be used to make bookings, check the status
of delivery, and current position of the shipment. The number consists of:
1. The first three digits are the airline prefix. Each airline has been assigned a 3-digit
number by IATA, so from the prefix we know which airline has issued the document.
2. The next seven digits are the running number/s - one number for each consignment
3. The last digit is what is called the check digit. It is arrived at in the following manner:
The seven digit running numbers are divided by 7, by using a long division calculation.
The remainder becomes the check digit. That is why no AWB number ends with a figure
greater than 6. Air waybills are issued in sets of different colours. The first three copies
are classified as originals. The first original, blue in color, is the shipper’s copy. The
second, colored blue, is retained by the issuing carrier. The third, colored orange, is the
consignee’s copy. A yellow copy acts as the delivery receipt, or proof of delivery*. The
other copies are all white
There are several purposes that an air waybill serves, but its main functions are:
*Contract of Carriage. Behind every original of the AWB are conditions of contract for
*Evidence of Receipt of Goods
When the shipper delivers goods to be forwarded, he will get a receipt. The receipt is
proof that the shipment was handed over in good order and condition and also that the
shipping instructions, as contained in the Shipper's Letter of Instructions, are acceptable.
After completion, an original copy of the air waybill is given to the shipper as evidence
of the acceptance of goods and as proof of contract of carriage
The air waybill may be used as a bill or invoice together with supporting documents since
it may indicate charges to be paid by the consignee, charges due to the agent or the
carrier. An original copy of the air waybill is used for the carrier's accounting
*Certificate of Insurance
The air waybill may also serve as an evidence if the carrier is in a position to insure the
shipment and is requested to do so by the shipper
Although customs authorities require various documents like a commercial invoice,
packing list, etc. the air waybill too is proof of the freight amount billed for the goods
carried and may be needed to be presented for customs clearance The format of the air
waybill has been designed by IATA and these can be used for both domestic as well as
international transportation. These are available in two forms, viz. the airline logo
equipped air waybill and the neutral air waybill. Usually, airline air waybills are
distributed to IATA cargo agents by IATA airlines. The air waybills show:
the carrier's name
its head office address
the pre printed eleven digit air waybill number
It is also possible to complete an air waybill through a computerized system. Agents all
over the world are now using their own in-house computer systems to issue airlines' and
freight forwarders' own air waybills. IATA cargo agents usually hold air waybills of
several carriers. However, it gradually became difficult to accommodate these pre-
numbered air waybills with the printed identification in the computer system. Therefore a
neutral air waybill was created. Both types of air waybills have the same format and
layout. However, the neutral air waybill does not bear any pre-printed individual name,
head office address, logo and serial number.
10. Mate's Receipt: Mate's receipt is a receipt issued by the Commanding Officer of the
ship when the cargo is loaded on the ship. The mate's receipt is a prima facie evidence
that goods are loaded in the vessel. The mate's receipt is first handed over to the Port
Trust Authorities. After making payment of all port dues, the exporter or his agent
collects the mate's receipt from the Port Trust Authorities. The mate's receipt is freely
transferable. It must be handed over to the shipping company in order to get the bill of
lading. Bill of lading is prepared on the basis of the mate's receipt.
11. Shipping Bill: Shipping bill is the main customs document, required by the customs
authorities for granting permission for the shipment of goods. The cargo is moved inside
the dock area only after the shipping bill is duly stamped, i.e. certified by the customs.
Shipping bill is normally prepared in five copies:
• Customs copy.
• Drawback copy.
• Export promotion copy.
• Port trust copy.
• Exporter's copy.
12. Letter of Credit: This method of payment has become the most popular form in
recent times; it is more secured as company to other methods of payment (other than
A letter of credit can be defined as “an undertaking by importer’s bank stating that
payment will be made to the exporter if the required documents are presented to the bank
within the variety of the L/C”.
Realisation of Export Incentives:
The incentives the exporter will get in today’s context and the manner in which they can
be obtained are as follows:
This refers to a rate fixed by the government based on the customs duty and excise duty
components which go into the production of an export product. This does not refer to the
finished product excise duty, but to the excise and customs duty paid on all the raw
materials and components which go into the production. Every year the Department calls
for latest data on these through the Export Promotion Councils, determines the drawback
rate and publish it for the exporters by June of the year. When the shipping bill is
submitted to the customs for the shipping of goods, it consists of a set of five copies. The
duplicate copy is known as the Drawback copy’, and this will contain all the 52 details
like description of the product, the port of destination, the total amount of drawback as
per government notification etc. this copy is endorsement by customs and sent directly by
them to the drawback cell in the customs department situated in the port from which
goods were exported. The exporter can approach this cell for his drawback payment with
any additional details they may ask for.
Finished goods which are subject to excise duty for home consumption are exempt from
the duty when they are exported. The scheme is also applicable where the exported goods
contain excisable goods in their manufacture.
The exporter can avail of this facility in either of the following methods, where finished
goods are excisable:
i. Export under Bond:
Under this method, the exporter has to execute a bond in favour of Central Excise
Authorities. The amount of the bond will be equal to the duty on the estimated maximum
outstanding of goods leaving the factory without paying the duty and pending acceptance
of their proof of export by excise authorities. No excise need to be paid by the exporter.
ii. Refund of Duty:
If the duty is already paid, after export is made, the exporter should make a claim with
Central Excise Authorities. After verification of the claim, the excise authorities will
arrange for the refund of the central excise. Where the excisable materials have been used
in the manufacture, similar to the above arrangement, the exporter can avail of the facility
of manufacturing under bond or he can claim refund after duty is paid.
Contents of a Letter Of Credit
A letter of credit is an important instrument in realizing the payment against exports. So,
needless to mention that the letter of credit when established by the importer must contain
all necessary details which should take care of the interest of Importer as well as
Exporter. Let us see shat a letter of credit should contain in the interest of the exporter.
This is only an illustrative list.
Name and address of the bank establishing the letter of credit
letter of credit number and date
The letter of credit is irrevocable
Date of expiry and place of expiry
Value of the credit
Product details to be shipped
Port of loading and discharge
Mode of transport
Final date of shipment
Details of goods to be exported like description of the product, quantity, unit rate,
terms of shipment like CIF, FOB etc.
Type of packing
Documents to be submitted to the bank upon shipment
Tolerance level for both quantity and value
If L/C is restricted for negotiation
Terms of Shipments – Incoterms
The International Chamber of Commerce (ICC ) has published revisions to its
International Commercial Terms, also known as INCOTERMS®, that take effect on
January 1, 2011. The revised rules, designated "INCOTERMS 2010", contain a series of
changes, such as a reduction in the number of terms to 11 from 13. The DAF, DES, DEQ,
and DDU designations have been eliminated, while two new terms, Delivered at
Terminal (DAT) and Delivered at Place (DAP), have been added. INCOTERMS 2010
also attempt to better take into account the roles cargo security and electronic data
interchange now play in international trade.
WHAT INCOTERMS ARE - INCOTERMS are a set of three-letter standard trade terms
most commonly used in international contracts for the sale of goods. First published in
1936, INCOTERMS provide internationally accepted definitions and rules of
interpretation for most common commercial terms. In the US, INCOTERMS are
increasingly used in domestic sales contracts rather than UCC shipment and delivery
WHAT INCOTERMS DO - INCOTERMS inform the sales contract by defining the
respective obligations, costs and risks involved in the delivery of goods from the Seller to
WHAT INCOTERMS DO NOT DO - INCOTERMS by themselves DO NOT:
• Constitute a contract;
• Supersede the law governing the contract;
• Define where title transfers; nor,
• Address the price payable, currency or credit terms.
These items are defined by the express terms in the sales contract and by the
INCOTERMS 2010 are grouped into two classes:
1. TERMS FOR ANY TRANSPORT MODE
• EXW - EX WORKS (... named place of delivery)
The Seller's only responsibility is to make the goods available at the Seller's
premises. The Buyer bears full costs and risks of moving the goods from there to
• FCA - FREE CARRIER (... named place of delivery)
The Seller delivers the goods, cleared for export, to the carrier selected by the
Buyer. The Seller loads the goods if the carrier pickup is at the Seller's premises.
From that point, the Buyer bears the costs and risks of moving the goods to
• CPT - CARRIAGE PAID TO (... named place of destination)
The Seller pays for moving the goods to destination. From the time the goods are
transferred to the first carrier, the Buyer bears the risks of loss or damage.
• CIP - CARRIAGE AND INSURANCE PAID TO (... named place of destination)
The Seller pays for moving the goods to destination. From the time the goods are
transferred to the first carrier, the Buyer bears the risks of loss or damage. The
Seller, however, purchases the cargo insurance.
• DAT - DELIVERED AT TERMINAL (... named terminal at port or place of
The Seller delivers when the goods, once unloaded from the arriving means of
transport, are placed at the Buyer's disposal at a named terminal at the named
port or place of destination. "Terminal" includes any place, whether covered or
not, such as a quay, warehouse, container yard or road, rail or air cargo terminal.
The Seller bears all risks involved in bringing the goods to and unloading them at
the terminal at the named port or place of destination.
• DAP - DELIVERED AT PLACE (... named place of destination)
The Seller delivers when the goods are placed at the Buyer's disposal on the
arriving means of transport ready for unloading at the names place of destination.
The Seller bears all risks involved in bringing the goods to the named place.
• DDP - DELIVERED DUTY PAID (... named place)
The Seller delivers the goods -cleared for import - to the Buyer at destination.
The Seller bears all costs and risks of moving the goods to destination, including
the payment of Customs duties and taxes.
2. MARITIME-ONLY TERMS
• FAS - FREE ALONGSIDE SHIP (... named port of shipment)
The Seller delivers the goods to the origin port. From that point, the Buyer bears
all costs and risks of loss or damage.
• FOB - FREE ON BOARD (... named port of shipment)
The Seller delivers the goods on board the ship and clears the goods for export.
From that point, the Buyer bears all costs and risks of loss or damage.
• CFR - COST AND FREIGHT (... named port of destination)
The Seller clears the goods for export and pays the costs of moving the goods to
destination. The Buyer bears all risks of loss or damage.
• CIF - COST INSURANCE AND FREIGHT (... named port of destination)
The Seller clears the goods for export and pays the costs of moving the goods to
the port of destination. The Buyer bears all risks of loss or damage. The Seller,
however, purchases the cargo insurance.
• BE SPECIFIC:
If you use INCOTERMS in the Sales Contract or Purchase Order, you
should identify the appropriate INCOTERM Rule [e.g. FCA, CPT, etc.], state
"INCOTERMS 2010" and specify the place or port as precisely as possible.
• RECOGNIZE WHERE THE RISK OF LOSS TRANSFERS:
A common misconception when the Seller pays the freight is that the Seller has
the risk of loss until the goods are delivered to the place or port specified on the
bill of lading or airway bill. Actually, when using INCOTERMS CPT, CIP, CFR or
CIF, risk transfers to the Buyer when the Seller hands the goods over to the
carrier at origin, not when the goods reach the place or port of destination.
Understand that under CIP and CIF, the Seller is only obliged to obtain
• UNDERSTAND WHO HAS RESPONSIBILITY FOR LOADING AND
UNLOADING CHARGES. FOR
DAT obliges the Seller to place the goods at the Buyer's disposal after unloading
at the named terminal at port or place of destination.
DAP obliges the Seller to place the goods at the Buyer's disposal on the
delivering carrier ready for unloading at the named place of destination.
CPT, CIP, CFR or CIF on the other hand, require the parties to identify as
precisely as possible the point at the agreed port of destination because the
costs up to that point are for the account of the Seller.
• UNDERSTAND WHO HAS RESPONSIBILITY FOR U.S. CUSTOMS ENTRY
DDP is the only INCOTERM where the Seller has responsibility for U.S.
Customs entry declarations.
IMPORTANT NOTE: An important factor to be considered when asking the
Seller to be responsible for international carriage, is if the goods ship by Ocean
Freight, an Importer Security Filing (ISF) must be electronically submitted to
Customs 24 hours before the cargo is laden on the vessel bringing the cargo to
the U.S. The Buyer should specify in the contract either (a) the shipper is
responsible for the ISF or (b) the Seller is responsible for providing the required
data in a timely manner (i.e. 72 hrs before lading) to the Buyer’s appointed agent
(e.g. Customs Broker). In our experience, when the broker and the international
forwarder are unrelated parties, this requirement is honored more in the breach
than in the observance. The Buyer should indemnify against the penalties
(US$5,000) for filing a late, inaccurate or incomplete ISF. The ISF does not
apply at this time to airfreight shipments.
• DETERMINE THE IMPORTANCE OF SUPPLY CHAIN VISIBILITY
When CPT, CIP, CFR or CIF are used the Seller fulfils its obligation to deliver
When it hands the goods over to the carrier, not when the goods reach the place
INCOTERMS FLOW CHART [FIGURE 6.]
FINDINGS AND INFERENCE
• The documentation paper works are simplified than the previous years.
• This has led to the emergence of a business environment ,widening both the scope
and scale of opportunities open to sellers
• Though many documents prevail in documentation, only certain documents play a
vital part in the company.
• It uses the Inco terms as FOB, EXW and C&F mostly.
• From the company’s procedure, the following has been inferred;
Forward System followed in NANCY KRAFTS PVT LT
• Europe Countries offer tax benefits for the imports. This is not provided by the
• 8-10% is kept as the profit margin.
• The firm pays a tax of 33% for the imports from Taiwan and China.
• The shipment carry days are 18days to Europe and 26-30days to U.S.
• The firm pays its bank – Canara Bank, an amount of $25 for each FOREX
• There seem to be a relative increase in the sales turnover of PON SANGER
EXPORTS up to 2008 and a noticeable fall during the year 2009.
• the product wise sales turn over and variations are fluctuating year by year.
• From the past export analysis for the country United States, the export variations
are positive with an increase of Rs.9.64 crores from the year 2008.
• From the past export analysis for the country Europe, the export has drastically
reduced from the year 2008 to 2009 with the variation of Rs.9.13 crores.
• From the past export analysis for the country Canada, the exports reduced year
by year except for the year 2008 which increased with the variation of Rs.5.66
• As an overall study, we can find that the firm has enjoyed more benefits and
• profits in the year 2008.
• Year 2009 has been seen as less profitable than the year 2007 and 2008.
• From the future trend analysis, the export of the company increases year by year.
The study was conducted to know the process involved in an apparel firm and to study
about The various departmental functions which coordinates to complete the export
cycle. The export Procedure of the firm has been seen clearly and other related aspect has
been known.From the analysis it is found that the performance of the company is
satisfactory, but the company is facing problem regarding excess of documents which
causes delay in transportation. Therefore necessary steps should be taken to limit the
number of documents so that the company can make distribution at right for the company
and it helps the company to have competitive advantage over its competitors. There are
signs of good future for NANCY KRAFTS PVT LTD, because of growing demand for
Indian garments in the world market.
RECOMMENDATION TO THE COMPANY
• As only certain documents are put in use, the other documents have no power in
the company which will be supportive to reduce the export procedures.
• As many of the documents are part in the use of documentation and procedures
• delay and tend to loss the customers.
• The company has to speed up the paper work.
• Update of available export incentives.
• The company should check the exchange rates before entering into particular
markets which will help in achieving more profits.
• The company can improve its sales by improving its quality and promotional
• The company has to improve their infrastructure facilities which will increase the
• If all the processing units are brought under one roof, it will reduce the
processing time of
• goods and it will lead to timely delivery of goods to the customers.
try for ISO certifications, which will value the company higher.
• Require more knowledge on the incentives offered by the Government.
• Can opt for Market Development Assistance from the Government of India, for
• and Stalls overseas.
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