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MINISTRY OF Commerce & Industry, Govt. of India
FASHION APPAREL MERCHANDISING
School of Fashion Design
Course- B. Des. (Fashion Design)
Course Code- B. Des. (FD)
Subject Head FASHION APPAREL MERCHANDISING
Subject Code (BFD 501)
Student Learning Booklet (SLB) SLB Sr.
No:- Of
FDDI
Ministry of Commerce & Industry,
Government of India,
A-10/A, Sector- 24, Noida-201301.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
Acknowledgement
`Asato ma sadgamaya, Tamaso ma jyotirgamaya, Mrtyormaamrtamgamaya’
`Lead me from the asat(lie) to the sat (truth), Lead me from darkness to light, Lead me from
death to immortality.’
Saraswati, the goddess of knowledge and arts, represents the free flow of wisdom and
consciousness. My first acknowledgement is to her blessings. To attain excellence, it is
important that knowledge sharing shall be carried out with best possible methodology so that
quest for knowledge can be achieved. This is the biggest challenge to the human society and to
the institution in particular as they are the torch bearer for disseminating the knowledge. Project
`Saraswati’ has been envisaged with the dream of attaining excellence in delivery of training by
employing best practices in the field of knowledge sharing.
FDDI as an institution has been pioneer in development of ‘Swayam Siddha’ self-paced
knowledge & skill set based learning materials for the footwear, fashion and retail sector.
This manual represents an extended and thoroughly revised version of notes on Fashion Design
which are collected from books, journals, internet, and other standard publications.
These manual are primary source of learning and still relevant for delivery of the training.
Project Saraswati is the next logical step in the augmentation of the knowledge domain. It
focuses on standardization of learning material, training delivery, assessment system and
validation system so that knowledge reaches with same light and equal opportunity of learning is
available to all.
FDDI firmly believe that for the attainment of goal, team work is an essential part, while
preparing this manuscript there are many individuals whose names may not appear on this page
but their contribution had been immense as far as development of this learning material is
concerned. The management of FDDI acknowledges contribution of each and every person
involved in the shaping and preparation of this manual.
This entire learning material was reviewed and conformity to the requirement of the syllabus
including deliberation. The training material design guidelines and deliberation were carried out
by Fashion Design Department. FDDI is also grateful to Mr. V. B. Parvatikar, Advisor
(Technical) who has been instrumental in providing resources and guidance in proactive manner
& for providing critical inputs at the time when it was needed the most.
FDDI also acknowledge other team members notably Mr. Ashish Kumar (Manager, RCIP) and
Mr. Sanjay Kamlay for documentation control and management activity.
FDDI hope that this document will help immensely to the students and teachers alike in
understanding of the subject in more comprehensive and objective way.
It is the reader who provides us the inputs for further improvement. The management of FDDI
welcomes all the suggestions to further improve this learning material.
Ajay Kumar
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
2	
  
CONTENTS	
  
	
  
	
  
Sr.	
  No	
   Content	
   	
  
1	
   Introduction	
  to	
  Fashion	
  Apparel	
  Merchandising	
  
	
  
	
  
2	
   Sampling	
  +	
  Scheduling	
   	
  
3	
   Costing	
   	
  
4	
   Sourcing	
   	
  
5	
   Merchandising	
  Documentation	
  
	
  
	
  
	
   	
   	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
3	
  
UNIT	
  1	
   INTRODUCTION	
  TO	
  FASHION	
  APPAREL	
  MERCHANDISING	
  
	
  
	
  
Fashion merchandising is the promotion of apparel sales and involves all of the tasks
necessary to deliver the clothing requests and meet the needs of potential customers and
designers.	
  
Fashion merchandising is the promotion of apparel sales and involves all of the tasks
necessary to deliver the clothing requests and meet the needs of potential customers and
designers. Fashion merchandising involves developing campaigns, displays and
advertisements, directing manufacturing and marketing as well as creating sales strategies
for the fashion industry or the retail environment.
Merchandising also refers to the necessary preparation that must be completed in order to
ensure that the merchandise is accessible and appealing to the customers. You have to
attract the customer to the product!
The key to being a great merchandiser is to promote and obtain the goods that are going to
be sold to customers. This can involve going to international fashion events, buying fashion
goods at market and negotiating with merchants, manufacturers, retailers and designers.
Fashion merchandising is a broad industry that requires a strong sense of style and trends
in addition to business training. A successful career in fashion merchandising begins with
formal training at a fashion merchandising school. Obtaining a fashion merchandising
degree can open the door to many opportunities in this diverse field. Students can learn
about industry trends, marketing, event planning and product development. Most fashion
merchandising students choose careers in a management role or working with major
apparel manufacturers and designers. Others may choose to own and operate a boutique of
their own.
Apparel Export Merchandising:
In the apparel export business, the customer is the buyer who gives the order. So here the
buyer’s requirements have to be fulfilled by the exporters so that they are successful in the
business.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
4	
  
Apparel export merchandising may be defined as “all the planning and activities involved
right from the buyer communication and order receiving till to the execution or shipment of
the order by fulfilling the following factors (6 RIGHTS) :
(1) RIGHT TIME
(2) RIGHT QUALITY
(3) RIGHT QUANTITY
(4) RIGHT PRICE/COST
(5) RIGHT CODE OF CONDUCT
(6) RIGHT PLACE
Right Time: From the exporter’ s perspective, if the goods are not shopped in the right time,
then the delay will increase the cost in production, the buyer may ask to ship the goods
through air or may ask for a discount or cancellation of the order. And also continuous
delayed shipment may affect the long term business relationships.
Right Quality: The exporters should k now about the quality requirement of their buyers. The
quality requirement may differ from buyer to buyer.
Right Quantity:
In many manufacturing process which involves more human work, it is very difficult to
achieve 100% efficiency. So the execution or shipment of the order with exact quantity of
the order given by the buyer becomes very difficult. For that reason normally more or less
than 3-5% quantity allowance is given by the buyers. Now, what is the right quantity for any
given order?
For example, if a buyer has placed an order of 10000 pcs with more or less 5% allowance,
then what is the right quantity to be shipped? From the exporter’s perspective, the right
quantity is order quantity plus given allowance. In this case the right quantity is 10500 pcs.
Right Price/Cost:
From the exporter’s perspective, the term is right cost. The exporter should make sure that
the order is shipped less than or equal to the cost what he calculated and arrived the price
to get the order. Higher cost will lead to reduction in profit and at one level it leads to loss.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
5	
  
For example if the cost arrived before profit is Rs.70 per pcs, then the cost of goods
produced should be less than or equal to Rs.70.
From the buyer’s perspective, the term is right price. The exporter should ship the goods at
the price what greed by the buyer. He should not go for the price negotiation after the order
is confirmed and it is in the midst of the production. The exporter may seek price re-
negotiation only under major critical situations like economic crisis, raw material crisis, etc.
Right Code of Conduct:
The buyers are now more conscious about the corporate social responsibility (CSR) of the
exporter to whom they are dealing with and in their supply chain. And most of the buyers
have their own Code of Conduct (COC) to which the exporters have to oblige to have a
business relationship. CSR deals with the policy on environment, health care, labour,
education, poverty, human rights and women empowerment among others.
Right Place:
This term refers to making availability of the goods at the right place or destination without
any problem. This term is most suitable to retail Merchandising where the goods are
brought and placed at the right place or store for sales.	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
6	
  Functions	
  of	
  a	
  Merchandiser:	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
7	
  
	
  
The	
  following	
  responsibilities	
  are	
  the	
  utmost	
  functions	
  of	
  a	
  Merchandiser	
  in	
  an	
  
Export	
  House.	
  
INQUIRIES:
1. On receiving an inquiry(s) the merchandiser must prepare a checklist and immediately
forward all information to 3 factories from the approved factory list for pricing.
2. The merchandiser must make sure that the factory specializes in the item being priced
and has worked with the client before.
2a. Selection of supplier should be based on their previous performance, efficiency,
delivery, etc.
3. If it is a new client then the merchandiser must discuss the inquiry(s) with the dept.
head before sending out the inquiry(s).
3a. In case of a new factory, a factory evaluation should be conducted as per the set
standards. Only Synergies Sourcing approved factories can be used for pricing, sampling,
etc.
QUOTING PRICES:
1. Prices must be sent within 1-2 days of receiving the inquiry.
2. All enquires must be entered in to the new development sheet.
3. Based on the lowest price the merchandiser must order proto sample. Min. 2 pieces
must be ordered. One sample for the customer and one office sample.
4. Before quoting any prices to the customer. The merchandiser should get all prices
approved by the Head of Merchandising or Managing Director.
5. If renegotiation is required then involve the dept. head, Head of Merchandising and
Managing Director so that the best prices are finalized with the factories.
6. Final quoted price must be updated on the new development sheet.	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
8	
  
PROTO SAMPLES:
1. Upon receipt of buyer’s specification, a thorough check should be conducted for
precision. Obtain explanation from customer for anything considered vague.
2. Forward the specification sheets/Pattern to the selected supplier with all the
explanation of specifications & technicalities on as & when received basis & update
records.
3. Ensure timely availability of fabric.
4. Follow-up with the supplier to provide the sample latest within 2 days for local
accessories & fabrics, in case of imported items maximum 12 days.
5. Upon receipt of the sample from the supplier thoroughly check the styling,
measurement (if any), stitching, quality of the fabric, fabric construction/GSM, hand
feel, washing standard, finishing of the sample & accessories if any & ensure
compliance of the samples as per customer’s specifications.
6. The departmental head will give final approval.
7. At least 3 pieces of each sample should be developed. One for merchandisers, one
for the customer & one for the suppliers for future references.
8. Prepare Proto Sample Checking Sheet & attach with the checklist (Format
Attached).
9. Put duly filled sample card on the sample, format enclosed.
10. Forward the samples as & when received basis & advise customer accordingly with
all the details of dispatch.
11. Follow with the customers for approvals/comments.
12. Once approved, advise supplier as well as Head of Quality Control.
13. Update Order Checklist, format enclosed.
14. Update the excel sheet accordingly, format enclosed.
	
  
ORDER PLACEMENT:
1. Once an order is placed the merchandise manager should fill out a PO checklist.
2. All missing information with regards to the PO will be forwarded to the customer
within 1 day of receiving the PO.
3. A complete PO package must be prepared and sent to the factory within 24 hours of
receipt of order from customer with a copy of P.O. to Commercial Department.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
9	
  
4. Prepare a projected production plan & forward the same to the Head of Quality
Control & to the related supplier. The schedule should comprise of expected dates
for fabric Quality Check, ILC, IPC, MPC & FRI.
5. Prepare a projected sample plan & forward the same to the related supplier with a
copy to the Head of department.
. PO PACKAGE FOR FACTORY:
A new PO package for the factory must include the following:
(i) Original PO sheet.
(ii) Spec. Sketch and workman sheet.
(iii)Color print artwork, lab dip, original fabric swatch and original trim card.
(iv)Original sample (If available)
Within 1 day of receipt of a new order the merchandise manager must call for a pre-
production internal meeting. The following people must attend this meeting:
(a) Head of Operation.
(b) Merchandise Manager.
(c) Acct. Related Merchandiser.
(d) Head of QA Dept.
(e) QA Personal.
(f) Internal QA Personal.
At the meeting the merchandiser will issue all information with regards to the order. This
information includes:
(v) PO sheet copy.
(vi) Spec sheet with all related information.
(vii) Lab dip card, print artwork, trims card, etc.
(viii)Original fabric swatch (If available)
(ix) Proto sample.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
10	
  
LAB DIP / PRINT STRIKE OFF:
1. Follow up with our customer for lab dips if necessary.
2. Upon receipt of the lab dips from the customer, immediately send a replica to the
supplier.
3. Follow-up with the supplier for prompt delivery of lab dips latest within 5 days.
4. Obtain maximum numbers of lab dips from the supplier’s minimum 3 per color.
5. Upon receipt of lab dips from the supplier, match lab dips against customer
specifications via visual test or if required by the customer via lab test.
6. Receive Lab Dips Format Sheet from our Lab & attach with the checklist, format
attached.
7. Head of department will give the final approval prior sending the samples to the
buyers.
8. Forward the lab dips to the customer along with the lab test report on as & when
received basis. Make sure the buyer receives the lab dibs as per their requirement.
9. Follow with the customers for approvals/comments.
10.On approval inform supplier.
11.Update Order Checklist, format enclosed.
12.Update the excel sheet accordingly, format enclosed.
SIZE SET SAMPLES:
1. Follow-up with the supplier for prompt delivery of Size Set options with actual fabric,
maximum 4 days for local fabric & maximum 12 days for imported fabric.
2. Obtain 2 sets of samples of all sizes from the supplier. One for merchandisers & one
for the customer.
3. Upon receipt of samples from the supplier, match these against customer
specifications & comments.
4. Thoroughly check the styling, measurement (if any), stitching, quality of the fabric,
fabric construction/GSM, hand feel, washing standard, finishing of the sample &
accessories if any.
5. Prepare size set format sheet & attach with the checklist, format attached.
6. Head of department will give the final approval prior sending the samples to the
buyers.
7. Forward the size set options to the customer’s on as & when received basis.
8. Ensure that buyer receives the samples as per their precise requirement.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
11	
  
9. Forward one or two pieces to the Head of Quality Control.
10.Follow with the customers for approvals/comments.
11.Upon receipt of approval advise supplier & Quality Control Head.
12.Update Order Checklist, format enclosed.
13.Update the excel sheet accordingly, format enclosed.
14.Obtain actual production schedule from the supplier. Make sure the schedule is in
accordance with the shipment date.
SAMPLE ACCESSORIES:
1. Follow up with the customer for sample accessories, if required.
2. Upon receipt of buyer’s accessories, a thorough check should be conducted for
precision. Obtain explanation from customer for anything considered vague.
3. Upon receipt of the accessories from the customer, forward the same to the supplier
on as & when received basis.
4. Factories will be responsible for the selection of accessories supplier. We should
forward no such recommendations to the factories.
5. Follow-up with the supplier and quality control for prompt delivery of accessories for
local max 4 days for imported max 12 days.
6. Obtain 4 sets of samples of all accessories with at least 3 different options from the
supplier. One for merchandisers, one for the customer, one for the quality control, &
one for the suppliers for future references.
7. Upon receipt of samples from the supplier, match these against customer
specifications.
8. Thoroughly check with the original/instructions received from the buyer, artwork,
color, quality, sewing allowance, bar code, price tags etc.
9. Prepare accessories format sheet, format attached.
10.Head of department will give the final approval prior sending the samples to the
buyers.
11.Prepare at least 2 synergies trim/accessories cards. One for buyer & one for
merchandiser.
12.Forward the accessories to the customer’s on as & when received basis.
13.Ensure that buyer receives the samples as per their precise requirement.
14.Follow with the customers for approvals/comments.
15.After approval advise the supplier accordingly.
16.Update Order Checklist, format enclosed.
17.Update the excel sheet accordingly, format enclosed.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
12	
  
PRE-PRODUCTION SAMPLES:
1. Follow-up with the supplier for prompt delivery of pre-production sample maximum 2
days.
2. Obtain 4 sets of pre-production samples from the supplier. One for merchandisers,
one for the customer, one for the quality control, & one for the suppliers for future
references.
3. Pre production sample in all size sets should be available to the merchandisers at
least 5 days before the start of actual production.
4. Upon receipt of samples from the supplier, match these against customer
specifications.
5. Thoroughly check the styling, measurement, stitching, quality of the fabric, fabric
construction/GSM, hand feel, washing standard, finishing of the sample &
accessories.
6. Prepare PP sample format sheet, format attached.
7. Head of department will give the final approval prior sending the samples to the
buyers.
8. Forward the pre-production sample to the customer’s on as & when received basis.
9. Ensure that buyer receives the samples as per their precise requirement.
10.Follow with the customers for approvals/comments.
11.Once approved advised the supplier.
12.Update Order Checklist, format enclosed.
13.Update the excel sheet accordingly, format enclosed.
DYE LOTS:
1. Follow-up with the supplier and quality control for the delivery of dye lot.
2. Dye Lot should be available (6 X 6, for every roll) to the merchandisers at least 5
days before the start of actual production.
3. Upon receipt of samples from the supplier forward the same to lab for lab test &
match these against customer specifications.
4. Thoroughly see the color standard, color fastness, shrinkage, GSM/construction,
hang feel, fabric quality, knitting tension, Lycra etc.
5. Receive Dye Lot sample format sheet from lab, format attached.
6. Head of department will give the final approval prior sending the samples to the
buyers.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
13	
  
7. Update Order Checklist, format enclosed.
8. Update the excel sheet accordingly, format enclosed.
BULK ACCESSORIES:
1. Follow-up with the supplier for the delivery of bulk accessories.
2. These accessories should be available to the merchandisers at least 5 days before
the start of actual production.
3. Upon receipt match these against customer specifications.
4. Thoroughly check the accessories color & quality of trim against buyer’s comments.
5. Prepare Bulk Accessories format sheet, format attached.
6. Head of department will give the final approval prior sending the samples to the
buyers.
7. Update Order Checklist, format enclosed.
8. Update the excel sheet accordingly, format enclosed.
PRODUCTION:
1. Once sampling is completed Head of concern Merchandiser forwards the order file to
the Head of Quality Control along with the approved sample & a copy of projected
production schedule. Make sure the file is forwarded at least 5 days before start of
actual production.
2. A meeting should be conducted between the Head of Merchandising Department,
Concern Merchandiser, Head of Quality Control & Quality Control Officer
(Production) discussing all the details of order.
3. Obtain an instruction sheet covering all the required information from the quality
control officer & approve.
4. Make sure any new comments are added into the instruction sheet.
5. Regular follow up should be made with the suppliers & Quality Control regarding the
status of production.
6. Make sure the Quality Control Department conducts all the required inspections i.e.
Fabric Quality Testing, ILC, IPC, MPC & FRI for every order. For large volumes
make certain, there are more than 1 MPC being conducted by the quality control.
7. Obtain daily production status from Quality Control & forward the same to IT for
updating the Web Site latest by 11:00 every morning.
8. Obtain reports of all the inspection conducted i.e. Fabric Quality Testing, ILC, IPC,
MPC & FRI for every order from quality control & keep a copy for record.
9. Visit the supplier at least during one inspection.
10.Make sure that FRI is conducted at least 2 days before the shipment date.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
14	
  
11.Once FRI is OK, inform buyer.
12.Update Order Checklist, format enclosed.
13.Update the excel sheet accordingly, format enclosed.
SHIPMENT / SALESMAN SAMPLES:
1. Inform Head of Quality Control for Shipment Sample.
2. Obtain 2 sets of shipment samples from the Quality Control Department of all sizes
covering all colors or as specified by the Customer. One or two pieces to be provided
to concerned Merchandiser & all remaining to Manager Administration. In case
where buyer requires shipment samples receive one complete set from Quality
Control.
3. Shipment samples should be available to the merchandisers the next day of FRI.
4. Upon receipt of samples, conduct a thorough check & match these against customer
specifications.
5. Thoroughly check the getup, styling, stitching, fabric quality, fabric
construction/GSM, hand feel, washing standard, finishing, & accessories.
6. Prepare Shipment sample format sheet.
7. Head of department will give the final approval.
8. Merchandiser's are required to give in writing to QC Head with a copy to Head of
Operations & their departmental head the name of our customers to whom we
normally sent shipment sample.
9. If required, forward the shipment sample to the customer’s on as & when received
basis.
10.Ensure that buyer receives the samples as per their precise requirement.
11.Forward one set of shipment samples to administration department.
12.Keep remaining samples in the department for future use & maintain a register.
13.Update Order Checklist, format enclosed.
14.Update the excel sheet accordingly, format enclosed.
DELIVERY & COMMERCIAL DEPT.
1. Regular follow-up is essential to:
a. Ensure goods are handed over to the forwarder.
b. Ensure the forwarder books space/flight for timely delivery of goods.
c. Ensure staffing of goods is conducted.
d. Ensure the date of departure is as per the booking.
2. Obtain vessel/flight details from commercial department & advise buyer.
3. Receive acknowledgement of goods from buyer.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
15	
  
4. Update Order Checklist, format enclosed.
5. Update the excel sheet accordingly, format enclosed.
DOCUMENTATION:
1. Conduct regular follow up with commercial department & supplier for the timely
delivery of all the below mentioned documents to the buyer.
(a) Packing List
(b) Commercial Invoice
(c) GSP
(d) Country of Origin Certificate
(e) Annexure III for Mexico Shipment (must be obtained 1 month prior shipment)
(f) Country of Origin Certificate attested from Argentinean Embassy in India for
Argentina shipment (must be obtained 1 month prior shipment)
(g) Bill of Lading/Master Airway Bill is sent from supplier’s bank to buyer’s bank only.
(h) Inspection Certificate
2. All these documents are required to be sent to the buyer first via email or fax & then
original via courier.
3. Receive acknowledgement of documents from buyer. 	
  
Merchandising Communication:
Though the merchandiser coordinates all the activities in an export order, it is necessary to
clearly define the working communications of a merchandiser. It is one of the foremost
functions of a merchandiser because the merchandiser has to communicate with different
levels of people in his day to day activities. She/he has to communicate with:
(a) The current buyers for the follow up of existing orders.
(b) New buyers for potential future business prospects.
(c) The boss and his superiors reporting day to day proceedings.
(d) The concerned departments like production, purchase, accounts, shipping, etc., for
following up the orders proceedings.
(e) The suppliers in the procurement of necessary accessories.
(f) His assistants in giving proper instructions and guidance.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
16	
  
Tech-Pack interpretation and Updating:
A techpack is informative sheet which encompasses all the specifications of the
requirements before embarking on the garment manufacturing process.
contains all the details of any specific style of the garment. This document is usually
prepared by the designer and finalized in consultation with the merchandisers, and then
forwarded to bulk sampling department or to the production department for the reference
and guide for bulk manufacturing.
THE OBJECTIVE
The Objective here is, once techpack for any style is frozen, the production department
must be able to go ahead with the manufacturing process without having to refer back to the
designer for any aspect of production. The merchandisers are thus able to go ahead and
ensure that the required material as per the techpack is made available to the production
department, in the right quantities at the right time. The marketing department can use this
document in their presentation, particularly to the large format stores and their key
customers. The preparation of a techpack and using it to manage and co-ordinate various
activities in production brings in efficiency within the company as, various departments
refers to the common document for discussion or carrying out any activity.
Almost all garment manufacturing companies prepare a techpack. In many cases, the
cutting instructions or job card issued to production acts as the techpack. However, the
details given in the techpack are likely to vary with the sizes of the company. Large
manufacturing companies generally have a detailed techpack for each of the styles under
production, for the simple reason that any manufacturing that is not in line with what was
desired results in a huge production loss.
For exporters, preparation of a techpack is almost mandatory, as the buyers prefer to sign
on the techpack before placing the order or would send in a techpack themselves.
TECHPACK TECHNICALITIES
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
17	
  
The complexity involved in bulk manufacturing of the styles also governs the contents of the
techpack, even if the designers are personally involved in the manufacturing especially on
high-end fashion garments. From a regular men’s shirt made out of a single fabrics to a
complex style for women involving two or more garments (a top, a bottom and probably an
inner are sold together under one pack as a single style), with each garment involving
multiple fabrics and trims, topped with additional production process such as embroidery,
printing, patch work etc. The production flow, care and control needed while production will
differ, and so will the form and content of the techpack for such styles. A detailed techpack
is usually prepared for styles that have been approved for bulk manufacturing and for which
elements such as the kind of fabrics and trims have been frozen. Before this stage, the
designers may make various combinations of styles for approval and keep a note of the
activities that have gone into creation of each combination of the styles.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
18	
  
	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
19	
  
	
  
	
  
	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
20	
  
	
   	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
21	
  
UNIT	
  1	
   DISCUSSION	
  QUESTIONS	
  
	
  
1) What	
  are	
  the	
  responsibilities	
  of	
  an	
  Export	
  House	
  Merchandiser?	
  
2) What	
  is	
  a	
  Tech	
  Pack?	
  
3) What	
  do	
  you	
  understand	
  by	
  Proto	
  Sample?	
  
4) What	
  is	
  a	
  PO	
  Sheet?	
  
5) Explain	
  a	
  Specifications	
  Sheet	
  and	
  its	
  significance.	
  
	
  
	
  
	
  
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UNIT	
  2	
   SAMPLING	
  &	
  SCHEDULING	
  
	
  
	
  
Broadly garment samples are categorized as development samples and production
samples. Samples that is made in development stage are as following -
1. Proto Sample
2. Fit sample
3. Salesman Sample/Photo shot Sample
4. Size set Sample
5. Pre-production Sample
In production stage factory need to submit few more samples that includes
1. Top of Production Sample
2. Shipment Sample
1. Proto Sample: these samples are proto type of new design created by designers. This is
the first sample in product development stage. Proto sample is made to communicate the
design of a style or a line or to present garment structure. In proto samples fit and fabric
detailing is not been considered.
2. FIT Sample: Once proto sample is approved, FIT is being made with actual
measurement. Modification on the pattern is done to get desired fit of the garment. FIT is
one of the most important factor to be considered during sample development. FIT sample
is being tested on live model or Dress form for to verify garment fit and fall.
3. Salesman Sample: Salesman samples are made to put on display in the retail
showroom. Salesman sample (SMS) are displayed for assessing customer's feedback and
according to customers response buyers forecast demand of an particular style. Sales
samples are made with actual fabric and trims and accessories. Buyer pays for salesman
samples to the developer.
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24	
  
4. Size set Sample: The purpose of the size set is to check fit of the garment in different
sizes. In this stage factory develops samples in multiple sizes. Generally, buyers ask size
set sample in jump sizes, like S, L, XXL. Buyer check size set sample and give feedback to
factory if anything need to be corrected.
5. Pre-production Sample: All the above samples are made in sampling department.
Buyer wants pre-production sample (PP sample) to be made in actual production line, so
that operators know what are they going to make. This sample is made with actual fabric,
trims and accessories and made by sewing line tailors. PP sample must be approved by
buyer or buying house merchants (technical persons) prior to proceeding actual production.
6. Top of Production Sample (TOP sample): Once production is online, few pieces is
taken out in the middle of the production. Production pieces are sent to buyer as TOP
sample. All buyers does not asked for TOP sample. Purpose is to cross-check whether
factory is following PP sample specification or not.
7Shipment Sample: When style is being finished and packed for shipment, 2-3 finished
and packed pieces with all packing details are kept for future reference. Shipment sample is
kept by factory merchants and buyer's merchant. The approved shipment is sent directly to
warehouse and merchants at the buyer do not get garment out of the shipment. That is why
they keep shipment sample for future reference.
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Below given a Sample Scheduling Chart :
	
  
	
  
	
  
	
  
	
  
	
  
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Pre Production Follow up:
Buyer Sourcing:
Buyer sourcing is the process of gathering or getting details about the new and prospective
buyers. Once an export firm is established, the foremost activity is buyer sourcing. The
details about the buyers can be collected from the following sources:
(i) Websites
(ii) Apparel industry related magazines or journals
(iii) Apparel & Textile Trade shows or fairs
(iv) Word of mouth contacts or referrals
(v) Buying agents
(vi) Embassies
(vii) Hotels
(viii) Trade directories
Buyer Communication:
Once a perspective buyer is identified, then the next step is to communicate with those
buyers. This involves communicating through letters, fax or e-mails. An exporter should
send a formal letter narrating about his company along with a full and detailed profile of his
company. The profile should have a comprehensive details about the company like address,
contact details, total employees, production details, product details, existing buyers, annual
sales turnover, management system accreditation (ISO9000,SA8000,etc.),infrastructure
details, etc,.
Enquiry and Sampling:
The buyer may send an enquiry once he is satisfied with the exporter’s quality. An enquiry is
a requisition sent by a buyer asking price for their product which they want to place the
order. The general content of an enquiry may have the details of garment style, fabric,
colour & assortment, proposed order quantity, etc. Normally an enquiry will not have the full
details of the particular order like quality specifications, packing details etc. An enquiry
received from a buyer may not be the confirmation of order placement. The buyer may send
the same enquiry to several exporters. Some buyers will ask for samples of their enquiry
along with the price before confirming the order.
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30	
  
Pre-costing & Reply:
After receiving an enquiry from the buyer, the merchandiser has to do the pre-costing for the
product which is mentioned in the enquiry. Pre-costing is the process of estimating the
tentative price of a product. Earlier days the costing was done by the owners but now mostly
it is done by the merchandisers or by the costing department which some companies have
and approved by the owner.While doing costing, various factors like style, fabric, colour &
design, order quantity, currency exchange rate, accessories, etc., have to be taken care.
Order Confirmation and Acceptance:
If the price offered to the buyer is acceptable to him, then he confirms the order to the
exporter. Some buyer will confirm the order after the approval of Fit Sample and the price.
The order confirmation should be in the form of Order Sheet/Purchase Order from the buyer
in a proper format duly signed and bearing the office seal of the buyer.
Order Review:
Order review is a small activity which is just going through or reading the order sheet
carefully to check for the particulars with that of enquiry if there is any variations and also for
the requirements of the particular order. For eg., in the enquiry the buyer may have asked
for the price for higher order quantity whereas while confirming the order, he might have
placed less quantity. The Order Sheet will have the full details of the order like quality
requirements, packing details, accessories details, etc., so the merchandiser should read
the Order Sheet carefully to check whether the quality requirement can be met or to make
not for any important instructions for the order like label placement, wash care instructions,
spellings of some important words, etc. Any discrepancies in the Order Sheet should be
informed to the buyer at the initial stage itself and should be corrected before the
commencement of the production. Though it is a small activity but it is an important activity
which would help in effective and efficient follow up and the execution of the order.
Planning and Programming:
After the order review is done and the next step is to do planning and programming for the
particular order. Planning involves the time calculation and scheduling of the order whereas
programming involves decision on certain activities in the particular order. Planning includes
master planning and scheduling or critical path.
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31	
  
Master Planning:
Master-planning is the activity of estimating the total time requirement for the order and to
find out whether the order can be sent in time and if not the necessary alternatives to
execute the order in time.
Before we fo in for master planning, it is necessary to set the target date for the shipment.
The target date is normally set one week to ten days earlier than the delivery date
mentioned in the Order Sheet. If the final inspection date falls on or before the target date,
then the order can be shipped in the given time. If not, then the revised planning should be
done by outsourcing or increasing the capacity levels for various activities like knitting,
processing, sewing, etc., so that the shipment can be done in the right time.
Scheduling or Critical path:
Scheduling or critical path is the activity of giving time schedules to the various activities
based on the maste plan. It will be in a table format which tells about the process sequence
for a particular order and their corresponding schedules or timings or dates for each
process, from the date of order confirmation till to the shipment.
The scheduling table consists of main two columns ‘Planned’ and ‘Actual’. First, the
planned column should be filled with the corresponding start and finish dates that are in the
master plan table. Then the copy of this may be sent to the buyer/buying office, concerned
departments like knitting, processing, cutting, sewing, etc.(if all are under one organization)
and may be put online in the intra office network so that the superiors can monitor it.
Generally, as soon as the order is confirmed, the buyer will ask for the critical path of the
particular order.
Then as the order is being processed, the ‘Actual’ column has to filled in with the actual
start and finish dates of the corresponding activities. If there is any deviation in the planned
and actual dates, the number of days of delay has to filled in the ‘Delay’ column. If the
number of delayed days equals or exceeds the total allowance days that were calculated to
set the target date, then it means that the order cannot be executed on time. The
Scheduling is also referred as ‘Route Card’.
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Factors for Route card/Scheduling:
While making scheduling or critical path, the following factors have to be considered:
8. Order Quantity
9. Product Style
10.Process Sequence of the Product
11.Delivery Date
12.Ship Schedule
13.Number of Process
14.Production capacity of own units and vendor units for various processes like
knitting, dyeing, printing,etc.
15.Availability of production capacity
16.Nature of Raw Materials
17.Lead Time for various processes and activities like sampling, approvals, material
purchase, testing, inspection, transportation, document certificates,etc.
18.Shipment details like mode of shipment,any instructions,etc.
19.Inspection systems for fabric,garment, production,etc. – Self, second or third
party
20.Packing details or assortment details
21.Allowance time for unexpected happenings
22.Public holidays, festivals,etc., which affect production, approvals, getting
document or certificate
TNA Calendar:
Time and Action (TNA) calendar is one of the most important tools for managing a project.
In garment manufacturing each order is not less than a project to a merchant. Because,
from order receiving to order completion involve number of tasks of various duration and
requirement of resources. Few tasks come one after another and others move at the same
time. Like number of processes, lots of people are involved to accomplish an order.
Secondly each order is unique in terms of process and time demand. So, a detailed plan
with well defined responsibility is must for each order to finish it before time or on time.
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Normally merchants prepare a plan in a spreadsheet listing down key processes in one
column and planned date of action for each processes is noted in another. This planning
sheet is called time and action calendar. Once TNA calendar is made, merchant can easily
list down her daily 'to do list' for the day and start doing work one by one. According to TNA
schedule processes are executed on daily basis to track whether an order is on track or
getting delayed.
Critical Path method (CPM) for TNA preparation:
Fashion merchandising is a much complicated network of linier and non-linier activities to
perform. Activities performed are interdependent and need of synchronization between
succeeding and preceding activities to make a non-linear process network. The longest
chain of activities considering task dependencies is called critical path. It is a common
practice industry to list activities from order receipt to delivery in linear sequence and
assigning time duration to each activity by backward planning, which is wrong as the
activities are never linear since there are lot of parallel activities. Therefore, the sequence of
activities should be drawn either as PERT network or Gantt chart format.
Even though most of the users are aware of the term 'critical path method' (CPM), CPM
may be elaborated as ‘critical’ means 'possibility of non-conformance is higher' as per
previous experience; some even link 'critical' with cost involving that activity. Everybody
select 'critical' activities hypothetically based on intuition or previous experience or buyer's
milestones and no one actually makes PERT network of activities and then arrive at CPM.
It was found that in majority of the cases the buyer specifies target dates of key activities
and based on those target dates the manufacturing organization creates their own TNA
adding buffer days (to ensure that buyer target dates are not missed). It was also a common
practice to have two TNA: one with few main important activities (also called milestone
activities) that are suggested by the buyer, and another one with more number of in-
between micro activities (in-house activities) to exercise control over macro activities PERT
network or Gantt chart should be mandatorily prepared to decide upon which all activities
should be there in TNA calendar. Merchandiser must prepare either and the resultant critical
path should be the activity chain for TNA calendar, all activities falling in critical path are
critical activities. Critical activities should always be on focus, a single minute delay in any of
the critical activities may lead to final shipment delay.
Structure of TNA:
Normally merchandisers prepare a plan of the order in a spreadsheet by listing down the
key processes in first column and planned date of action for each process in the next
column. This planning sheet is popularly known as time and action calendar (TNA). Once
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34	
  
TNA calendar is made, then it can be easy for merchandiser list down their daily 'to do list'
and taking it one by one. As per TNA schedule processes can be executed on timely basis
to track whether an order is on track or it will get delayed.
In order to make TNA below mentioned information must be available
- Process flow of an order with the list of task which need to be performed
- Production capacity of cutting, sewing, washing and finishing
- For sewing - batch wise and product wise capacity (production per day per batch)
- Lead time of activities, e.g. raw material lead time, sampling lead time, etc.
- Shipment date or planned ex-factory date
Normally TNA does not depend on fabric used in merchandise like woven or knits. TNA is
largely depends on the particular process flow of an order, machine requirement and
available production capacity. In TNA planned cutting date (PCD) and ex-factory date these
are the two most critical dates.
Sample TNA for formal shirt manufacturing order:
The TNA derived by assuming the order of 10000 pieces of formal shirts, made out of 100%
cotton, plain woven solid dyed fabric, with embroidery logo on it. The order is for SS 2013,
delivery date 1stMarch 2013, shipment at New York-USA.	
  
	
  
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Programming:
Apparel manufacturing involves a combined network of various activities like raw materials
purchase, knitting, weaving, processing, sewing, etc. The decision on what, when where,
how, who, etc. has to be made for all these activities. Programming is the activity of
deciding all these things. Generally programming is done for the following things.
(i) Yarn Programming:
This includes calculation of total yarn requirements for the particular order, deciding the yarn
count, other quality parameters, etc. The total yarn or fabric consumption for the particular
order is done depends on the number of sizes, order quantity, cutting and other wastages,
etc.
(ii) Knitting/Weaving Programming:
In knitting, the decision on fabric diameter fixation, greige fabric GSM, selection of m/c.
number of fabrics for the particular order etc. and in weaving the decision on selection of
looms and suppliers, greige fabric width number of fabrics for the particular order etc. has to
be decided.
(iii)Processing Programming:
This includes estimating the fabric quantity per color for dyeing, printing, finishing, selection
of m/c and methods and also includes decision on printing and finishing parameters.
In dyeing, number of colors, machine capacity, number of fabrics, special finishing, testing
and approval time, outsourcing, time for reprocess etc,. are to be considered.
In printing, number of designs, number of colors, number of fabrics, method and style of
printing, production capacity, testing and approval time, outsourcing, time for reprocess etc.
are to be considered.
(iv) Sewage programming:
Here, this includes programming of cutting, sewing, checking, ironing, and packing are
done.
In cutting, method of cutting, marker efficiency, production capacity, assortment quantities,
number of fabrics and sizes/color, etc. are to be considered.
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In sewing, production method (batch or line production), type of machines required, number
of m/c’s or lines required, make or outsource, process sequence etc. has to be decided.
In ironing, ironing or pressing, type of folding, etc. are in packing, packing style, assortment,
carton marks, etc. are to be considered.
(v) Sampling Programming:
Apparel production requires various samples at various stages which are to be approved by
the buyer; Programming for samples from Fit sample to shipment samples has to be made.
(vi) Accessories Programming:
The programming for purchase of various production accessories like sewing thread,
buttons, zippers, etc. and packing accessories like carton box, poly bag, labels, tags, etc.
are done here.
After planning and programming is completed for the particular order, the actual processing
of the order is done starting from yarn purchase, knitted, processing, fabric inspection,
cutting, sewing, checking, ironing, packing, final inspection and shipment as per the
planning and programming. Continuous and consistent follow ups to be made so that the
activities are completed as per the planning.	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
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UNIT	
  2	
   DISCUSSION	
  QUESTIONS	
  
	
  
1) What	
  are	
  the	
  different	
  types	
  of	
  Samples	
  in	
  Sampling	
  Process?	
  
2) What	
  is	
  a	
  FIT	
  Sample?	
  
3) What	
  do	
  you	
  understand	
  by	
  Buyer	
  Communication?	
  
4) What	
  is	
  a	
  TNA	
  Sheet?	
  
5) Define	
  CPM.	
  
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40	
  
UNIT	
  3	
   COSTING	
  
	
  
Estimating correct manufacturing cost is essential for a successful business. You might be
preparing garment cost sheet and need to find manufacturing cost per garment. But don't
know exactly how to do it and don't have full confidence calculating the same. Don't worry.
Read this post and learn the basic method of determining Cost of Manufacturing (CM) of
apparel products.
Cost of manufacturing can be defined as the cost incurred by the factory to run the factory
making garments. Factory running cost includes direct labor cost and manufacturing
overhead. Here manufacturing overheads are indirect workers wages, staff salary, power
and fuel cost, repair and maintenance cost, factory rent, administration cost etc. This cost is
also known as operating cost. Cost of Manufacturing is determined for per unit garment.
There are two ways to find Cost of Manufacturing (CM) for a particular style/order.
1. Based on Standard Time (SAM) of the product
2. Based on Daily Production Average
1. CM Calculation Based on Standard Time (SAM) of Product Making
To get better accuracy in cost estimation one should prefer this procedure. But to many
small size companies no such resources available to measure product SAM and data for
the following parameters. Following parameters are essential for cost calculation in this
method.
1 Product SAM: Standard time of the garment. Standard time of a garment is measured by
using Time Study and using synthetic data.
2 Target Efficiency: Target efficiency percentage is at what % you are expecting running a
specific product and order quantity.
3 Operating Cost per day/machine - Operating cost is factory running cost. Operating
costs are all cost incurred to run the business other than material cost. Calculate monthly
operating cost and then calculate daily operating cost. Calculate per machine operating
cost.
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Formula:
Cost of Manufacturing = (Operating cost per day per machine* SAM)/(Target Efficiency% *
Working hours * 60)
In the following table an example is shown for calculating manufacturing cost using SAM
and Daily Production figure.
Table-1: Calculation of Cost of Manufacturing
In the above example, garment SAM is 21 minute, target efficiency 60%. So, actual time
would be 35 minute to make a garment. Factory works 8 hours in a day and operating cost
per day per machine is Rs. 1022.
Cost of manufacturing is Rs. 74.52
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Also Read: How Factory Overheads is Calculated in a Garment Export Business
2. CM Calculation Based on Daily Production Figure
This method is widely used by garment manufacturing factories. Cost of Manufacturing
calculation is done based on historical production data. This is an easier method compared
to above one.
Information needed to find Cost of Manufacturing
1 Daily production: Find average daily production of a particular style (garment)
based on earlier (historical) production figures. Calculate daily average production of
the factory.
2 Manpower involved in production: How many sewing machines or sewing
operators are utilized to produce above quantity
3 Operating cost per day/machine: As explained above.
Formula
Cost of Manufacturing = (Operating cost per Day / Total garments to be produced
per day)
See the example method -2 in the above table. In the example, daily product is 550
pieces. 40 operators worked to produce these pieces. Operating cost per machine is
Rs. 1022 per day.
So cost of manufacturing is Rs. 74.33
P.S. Data used in the above examples are hypothetical.
Difference between Estimating and Costing:
Although estimating and costing both are required to decide the price of the product, even
then the two are different as explained below:
1. Estimation is aimed to calculate the probable cost of the product before the
manufacturing starts, and while costing is the determination of actual cost of the product by
adding various elements of expenses incurred.
2. Estimation requires a highly technical knowledge hence an estimator is basically an
engineer and costing requires the knowledge of accounts and therefore costing is done by
accountants.
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3. Estimation forecasts about the probable cost and hence one can know before the
manufacture that the manufacturing of the product shall be profitable or not, and whether
one should manufacture it or not, but costing tells after the manufacture about the
profitability of the product.
How to Calculate Raw Material Cost for Garments?
Material cost is the major cost component of a garment manufacturing costs. A correct cost
calculation method will give you better projection of garment cost for a style. In this article
how to calculate direct materials cost have been explained in details. Raw materials
required for making a garment is sourced from suppliers.
Main materials are like fabric, labels, sewing thread, hang tags, trims etc. So to have
correct material cost you must have price knowledge of each item.
Steps used for material costing estimation are –
• Preparation of material requirement sheet
• Material price listing
• Preparation of material cost sheet
Prepare material requirement sheet
List down all items required and calculate consumption per unit for all materials to be used
in garments.
For an example, let you are going calculate material cost for a polo shirt. To make polo you
need knitted fabric – Single jersey/pique, cuff and collar rib. Sourcing of knitted fabric can be
done three ways
- You can directly purchased dyed fabric or
- You can source yarn, knit fabric and process the knitted fabric as per your requirement
or Purchase dyed yarn and knit.
Let you will purchase yarn and get knitting and dyeing processes done by job workers. To
go through this process collect the pricing list of different types of yarn (or at least for the
yarn that you will purchase for your product), knitting cost, knitting loss%, dyeing cost per kg
and process loss% from suppliers.
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Cut, make and Trim (CMT):
In the apparel industry the buyer needs to assure the quality of raw materials. Textile fabrics
of the quality or nature demanded by the buyers may not be available in the sourcing
country and raw materials may be required to import. In many instances, the buyer takes on
the task of purchasing and shipping the raw materials for the apparel production facility.
Buyer only pays a fee to the factory for sewing, trimming, and manufacturing the final goods
which is named as CMT. The finished goods are then shipped to the buyer.
Secondly when a larger manufacturer uses production capacity of the subcontractors and
job workers, subcontractors are paid for CMT only.
Material Price listing:
Collect material price quote for all the material you need to purchase from different vendors.
Prepare database for the current market price of raw materials.
For example here is one Price List
Yarn: The costs for different yarns are –
20s Combed – Rs.105/kg
30s Combed – Rs. 115/kg
50s Combed – Rs.140-145/kg
2/60s Combed – Rs.200/Kg
2/60s dyed yarn – Rs.420/Kg dark shade
Knitting cost:
For Single Jersey – Rs.15/kg
For Rib - Rs.18/kg
For Interlock - Rs. 30-35/kg
Knitting loss: 2%
Dyeing cost: Rs. 80/kg for dark shades
Process loss (Dyeing): 6%
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Fabric cost: Ready to use fabric cost is calculated using basic calculation as shown in the
following table. Cost of the knits fabric is represented in price per Kg.
Shell Fabric Collar/Cuff
Fabric Description 2/60s single jersey 2/60s rib
Yarn cost (Rs.) 200.00 200.00
Knitting cost (Rs.) 18.00 20.00
Knitting loss (2%) 4.36 4.40
Processing cost (Dyeing) (Rs.) 80.00 80.00
Processing loss (6%) (Rs.) 18.14 18.26
Cost per Kg Rs. 320.50 Rs. 322.66
Fabric Consumption: Next step is to find requirement of fabric for the polo. Suppose for
this polo shirt you need shell fabric 0.32 Kg and Ribs for cuff and collar 0.080 Kg.
Prepare material Cost Sheet
Once you find fabric cost and fabric consumption prepare material cost sheet including all
other material required to make a garment ready for sale. An example of material cost sheet
has been shown below.
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Items Consumptio
n
UOM* Rate (Rs.) Amount
(Rs.)
Remark
s
1 2/60s single jersey 0.32 KGs 320.5 102.56
2 Cuff and collar ribs 0.08 KGs 322.66 25.81
3 Sewing thread 159 Meters 4 approx.
4 Buttons 3 Gross 2 approx.
5 Main label 1 Unit 1 approx.
6 Care label 1 Unit 1 approx.
7 Hang Tags 1 Unit 3 approx.
8 Price Tags 1 Unit 2 approx.
9 Poly bags 1 Unit 1 approx.
10 Kimble 1 Unit 0.5 approx.
Total Cost 142.87
*UOM - Unit of measure
So, Total fabric cost is Rs. 128.37 and including other material costs total cost of the
material for making this Polo Rs. 142.87
Now for each item merchants generally purchased extra quantity of inventory (from 2% to
7%) as buffer. This excess cost due to extra purchase of material is added into the garment
costing.
In the daily production report, many factories include actual garment production cost from
the day of loading a style. In this article production cost represents sewing room cost.
Factories consider all direct and indirect personnel who are involved in garment sewing and
managing sewing lines in calculating garment production cost. In case, a production
manager handles 10 lines then one tenth of his daily salary is considered as cost incurred
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
47	
  
per line per day. If a floor-in-charge runs 3 lines (considering each line run single style) then
one third of his daily salary is considered as cost incurred in production of a style.
Following cost sharing method, daily salary of all personnel is calculated for a style. If
operators work overtime and others stay to assist them then overtime salary is also added
to total daily wages. Overtime salary (hourly rate) may differ from the normal working hours.
“Actual Garment production cost” is a component of daily production report (DPR). Actual
garment cost is represented in two ways –
v Actual garment cost for the day and
v Till date average cost per unit
Formula used for the cost calculation = Total salary for the day/ Total production (in pieces).
In the following table an example of cost calculation has been shown that is normally used
by garment manufacturing factories.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
48	
  
(Note: All salaries and manpowers used in the above costing sheet are only for example.)
In the above example – Production manager handles 5 lines and Floor-in-charge handles 4
lines. So, their salary is divided by 5 and 4 respectively as a contribution to each line. If you
want to use this sheet for your factory, add manpower in the list and their actual daily wages
(salary per day) according to your factory.
During learning curve, production cost per piece will be high and as learning curve ends
daily production cost goes down. At this time, actual production cost is being checked with
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
49	
  
target cost. It helps company to assess factory performance in term of meeting garment
cost.
Production Cost Mapping for Few Apparel Items :
To provide you an overall idea about cost mapping of garment production 3 items has been
selected like Basic V-Neck Long Sleeve T-Shirt, Ladies Turte Neck Pullover and Mans 5
Pocket Denim Jeans. In the following table on the product image total FOB break up has
been shown. Total production cost of the items and fabric specifications given below the
images. Finally, process wise cost break up has been given below.
This study was done by Progress, gtz. based on data from Bangladeshi apparel
Manufacturers.
Basic V-Neck Long Sleeve
T-Shirt
Ladies Turtle Neck Pullover
Man's 5 Pocket Denim
Jeans
Total production cost of $
2.5 (as of July 2007)
Color: White
Fabric: 1X1 Rib
Weight: 240 GSM
Total production cost of $
3.25 (as of July 2007)
50% Cotton, 50% Acrylic
Fabric: Single Jersey
Total production cost of $
5.8 (as of Dec 2008)
Yarn & Accessories
Knitting
58%
3%
Yarn & Accessories
Flat Knitting
64%
15%
Fabric & Acc. (Raw
Materials)
75%
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
50	
  
Dying
Cutting
Sewing
Finish & Pack
Administrative
28%
19%
5%
3%
3%
Linking
Trim & mending
Wash, Finish & Pack
Administrative
5%
3%
2%
11%
Cutting
Sew
Wash
Quality
Administrative
1%
3%
10%
1%
11%
Garment Value Chain Analysis
Whenever I go for shopping clothes from retail showroom and stores, the retail price of the
clothes stops me to go for purchasing. It may be true to some of you. The final retail prices
are really crazy. How they can charge that much money for the basic products? As garment
manufacturing expert I know how much money has been spent in fabric and manufacturing.
To get the answer of my question I started researching for value chain of apparel products
from fabric to retail. Finally I got two examples that helped me to understand who are taking
share of total price. It may not be match with all types of apparel products but you will get a
broad idea on the garment value chain.
Example 1: Value chain analysis of a Casual Frock
Cost Parameters Value Addition
Percentage
Rate
(INR)
Share of Total Retail
Price
Raw Material (Fabric, Zipper,
thread)
70 70 28.7
Drafting, designing and Cutting 30% 21 8.6
Embroidery 33% 30 12.3
Stitching 20.70% 25 10.3
Hand work 27.40% 40 16.4
Ironing & Packaging 13.40% 25 10.2
Whole seller margin 15.60% 33 13.5
Total 244 100
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
51	
  
Share of Total retail Prices has been shown in the following pie chart#1
Example 2: Value chain analysis of a Party Wear Frock
Cost Parameters Value
Addition
Percentage
Rate (INR) Share of Total
Retail Price
Raw Material (Fabric, Zipper,
thread)
300 300 28.1
Drafting, designing and Cutting 30% 90 8.4
Embroidery 35% 137 12.8
Stitching 25% 132 12.3
Hand work 30% 197 18.5
Ironing & Packaging 4% 34 3.2
Whole seller margin 20% 178 16.7
Total 1068 100
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
52	
  
Share of Total retail Prices has been shown in the following pie chart#2
COST OF MAKING (CM) :
To find out the CM of a item you must need the following 06 (six) information at first, as
listed below:
i. Monthly total expenditure of your factory with factory rent,commercial cost, electricity bill,
water bill, transportation, repairing, worker & stuff wages etc. (8hrs/day) in bangla
taka. Suppose - 50,00,000/- tk
ii. Qty of running Machine of your factory of the following month (which total expenditure we
have consider here). Suppose - 100 machines
iii. Number of machine to complete the layout for the following Items (which CM we are
calculating). Suppose - 25 machines
iv. Production target/capacity of the following items, per hour from the existing layout,
excluding alter & reject. Suppose - 200 pcs per hour
v) Total working day of the followings month,(though the house rent,commercial
expenses,machine overhauling & some other cost remain same)Suppose- 26 days.
vi. If you want to calculate the CM in US$ (dollar) then pls input
present dollar conversation rate BDTk. Suppose - $1 = 74 taka.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
53	
  
COST OF MAKING (CM) :
= {(Monthly total expenditure of the following factory / 26) / (Qty of running Machine of your
factory of the following month) X (Number of machine to complete the layout)} /
[{(Production capacity per hr from the existing layout,excluding alter & reject) X 8}] X 12 /
(Dollar conversion rate)
= [{(50,00,000 / 26) / ( 100 ) X (25)} / {(200) X 8}] X 12 / 74
= [{192307.7 / (100) X (25) } / 1600] X 12 / 74
= (48,076.9 / 1600) X 12 / 74
= 30.048 X 12 / 74
= 360.58 / 74
= $4.873 / dozen (this is the making cost (12 pcs) of the following items)
However, normally at present (after starting the new salary scale)in Bangladesh we
calculate the CM of any item consider the overhead sewing machine cost 1200 tk to 1400
tk/day that means $16.216 to $18.92/per day.
Above is for a non-compliance factory. For the a compliance factory the per day machine
cost will be 1800 tk to 2100 tk ( $24.32 to $28.37)
SO, if the an items produce 1600 pcs per day using 25 machines then the CM will be
= Overhead machine cost X require machine / produce quantity X 12 / $74
= 1400 X 25 / 1600 X 12 / 74
	
  
	
  
	
  
	
  
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
54	
  
UNIT	
  3	
   DISCUSSION	
  QUESTIONS	
  
	
  
	
  
1) How	
  to	
  calculate	
  raw	
  material	
  costs	
  for	
  garments?	
  
2) Explain	
  SAM.	
  
3) What	
  do	
  you	
  understand	
  by	
  CMT?	
  
4) Elucidate	
  CM.	
  
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FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
55	
  
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FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
56	
  
	
  
UNIT	
  4	
   SOURCING	
  
	
  
	
  
Bill of Materials (BOM):
A Bill of Materials (BOM) is a list of inputs that go into your product. If the TechPack was a
broad overview of the style itself, the BOM is specific about the materials. Not only is it
specific about each input, it is specific per colorway. In other words, if you have three
colorways, you will need a BOM for each color. Perhaps we could think of a BOM as a list of
ingredients. If it is not on the BOM, it doesn’t go into the product.
With the BOM (which we need for costing), we also need to track the vendor -and testing- of
each input. Again, everyone needs to do this (shrinkage etc) but kid’s producers more than
anyone (which is why children wear producers who survive will become the epitome of
professional practices in the trade).
BOM information:
1. Product code (often called a style no. for fabric or input)
2. Product description
3. Vendor
4. Cuttable Width, size (buttons) or length (zippers)
5. Test results (shrinkage, lead etc)
6. Estimated/actual yield (allocation, qty used)
7. Required processing (sponging, dyeing, enzyme bath etc)
For our own convenience, we might want to add a field that lists whether this is a “common”
item meaning it’s used in a variety of your products. If we like, we can also add costing
information per item. Most firms split that up because it’s proprietary but if we are the only
one doing all the work, it doesn’t matter. We also need to keep in mind that contractors will
need to see your BOM. Contractors often use the BOM as a checklist to make sure they’re
received all of your inputs. Don’t forget to include the most common and mundane items.
Thread and labels (care, tracking and company) are often omitted.
Note about vendor sources on the BOM: Although it is proprietary and we may not want our
contractor to see this but it can be helpful if they have this information. One, some vendors
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
57	
  
aren’t the best. If the vendor is known to sell crocked goods, the contractor will be sure to be
extra vigilant when spreading. Second, the contractor may know a better source than
whoever you’re using. Lastly, if we run short on a given input, contractors often know how
good a vendor is about turning an order.	
  
UNIT	
  4	
   DISCUSSION	
  QUESTIONS	
  
	
  
	
  
	
  
1) What	
  is	
  BOM?	
  
2) What	
  is	
  Programming?	
  
3) What	
  is	
  Scheduling?	
  
4) What	
  kind	
  of	
  information	
  do	
  a	
  BOM	
  consist	
  of?	
  
	
  
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FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
58	
  
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FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
59	
  
	
  
UNIT	
  5	
   MERCHANDISING	
  DOCUMENTATION	
  
	
  
Export License
Majority of goods are allowed to be exported without obtaining a licence. Export
license are only required for items listed in the Schedule 2 of ITC(HS)
Classifications of Export and Import items. An applicaton for grant of Export
License for such items must be submitted to the Director General of Foreign
Trade (DGFT). The Export Licensing Committee under the Chaimanship of
Export Commissioner considers such applications on merits for issue of export
licenses.
Export of Special Chemicals, Organisms, Materials, Equipment and
Technologies (SCOMET) items are also permitted under a license or prohibited
altogether.
Export of Samples
Export of samples upto specified limits are allowed free. The exporter is required
to be registered with the appropriate Export Promotion Council to avail of this
benefit. Samples with permanent marking as “sample not for sale”are allowed
freely for export without any limit.
Processing of Shipping Bill
In case of export by sea or air, the exporter must submit the ‘Shipping Bill’, and
in case of export by road he must submit ‘Bill of Export’in the prescribed form
containing the prescribed details such as the name of the exporter, consignee,
invoice number, details of packing, description of goods, quantity,FOB value,etc.
Along with Shipping Bill, other documents such as copy of Packing List,
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
60	
  
Invoices,Export Contract, Letter of Credit,etc. are also to be submitted. There
are 5 types of shipping bills:-
1.Shipping Bill for export of duty free goods:
This shipping bill is white colored.
2.Shipping Bill for export of goods under claim for duty drawback:
This shipping bill is green colored.
3.Shipping Bill for export of duty free goods ex-bond:
That is, bonded warehouse. This shipping is pink colored.
4.Shipping Bill for export of dutiable goods:
This shipping bill is yellow colored.
5. Shipping Bill for export under DEPB sheme:
This shipping bill is blue in color.
The Bills of Export are:
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
61	
  
(i) Bill of Export for goods under claim for duty drawback
(ii) Bill of Export for dutiable goods
(iii) Bill of Export for duty free goods
(iv) Bill of Export for duty free goods ex-bond
Let Export Order:
After the receipt of the goods in the dock, the exporter may contact the Customs Officer
designated for the purpose and present the checklist with the endorsement of Port Authority
and other declarations along with all original documents. Customs Officer may verify the
quantity of the goods actually received and thereafter mark the Electronic Shipping Bill and
also hand over all original documents to the Dock Appraiser, who may assign a customs
officer for the examination of the goods. If the Dock Appraiser is satisfied that the particulars
entered in the system conform to the description given in the original documents, he may
proceed to allow ‘Let Export’ for the shipment
Export Quota
Restrictions imposed on own exports by a country, either voluntarily or on the behest of
other countries. Reasons for its imposition may include:
(i) Protection of local industry from shortages of raw materials
(ii) Protection of local population from shortages of foodstuffs or other
essential goods
(iii) Maintenance of international commodity prices or orderly marketing
(iv) Export restraint agreement with members of a producer’s cartel(such as
OPEC)
Or
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
62	
  
(v) Export restraint agreements with consumer countries
A restriction imposed by a government on the amount or number of goods or services that
may be exported within a given period, usually with the intent of keeping prices of those
goods or services low for domestic users.
Export Documentation:
The exporting activity involves several commercial and regulatory procedures
and these procedures involve considerable documentation requirements.
Besides the documentation pertaining to the commercial aspects of the export
business, there are documentation requirements of a regulatory nature like
excise clearance, foreign exchange regulations,etc.
The export documentation involves the preparation of the specified number of
copies of the prescribed documents pertaining to the different procedures and
different forms used in the export documentation have been standardized and
aligned.
Basically the export documents are classified by general and by shipment
stages. The general documents are further classified into commercial and
regulatory documents. The shipments stages documents are classified into
documents related to goods, shipment, payment, inspection, excisable goods,
foreign exchange control regulation.
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
 
	
  
63	
  
Commercial Documents:
The commercial documents are required for making the physical transfer of
goods and their title from the exporter to the buyer and the realization of export
contract, by customs of trade.
The commercial documents may be classified into principal and auxiliary
documents.
1. Principal documents:
Principal documents are the documents which have to be sent to the
buyer by the exporter after the shipment is executed. There are 8 principal
documents which are as follows:
(v) Commercial Invoice
(vi) Packing List
(vii) Bill of Lading
(viii) Combined Transport document
(ix) Certificate of Inspection/Quality Control (where required)
(x) Insurance certificate/Policy (in case of CIF, CIP term)
(xi) Certificate of Origin
(xii) Bills of Exchange and shipment advice
2. Auxiliary documents:
FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
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Fashion a merchandising

  • 1.
  • 2. MINISTRY OF Commerce & Industry, Govt. of India FASHION APPAREL MERCHANDISING School of Fashion Design Course- B. Des. (Fashion Design) Course Code- B. Des. (FD) Subject Head FASHION APPAREL MERCHANDISING Subject Code (BFD 501) Student Learning Booklet (SLB) SLB Sr. No:- Of FDDI Ministry of Commerce & Industry, Government of India, A-10/A, Sector- 24, Noida-201301. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 3. Acknowledgement `Asato ma sadgamaya, Tamaso ma jyotirgamaya, Mrtyormaamrtamgamaya’ `Lead me from the asat(lie) to the sat (truth), Lead me from darkness to light, Lead me from death to immortality.’ Saraswati, the goddess of knowledge and arts, represents the free flow of wisdom and consciousness. My first acknowledgement is to her blessings. To attain excellence, it is important that knowledge sharing shall be carried out with best possible methodology so that quest for knowledge can be achieved. This is the biggest challenge to the human society and to the institution in particular as they are the torch bearer for disseminating the knowledge. Project `Saraswati’ has been envisaged with the dream of attaining excellence in delivery of training by employing best practices in the field of knowledge sharing. FDDI as an institution has been pioneer in development of ‘Swayam Siddha’ self-paced knowledge & skill set based learning materials for the footwear, fashion and retail sector. This manual represents an extended and thoroughly revised version of notes on Fashion Design which are collected from books, journals, internet, and other standard publications. These manual are primary source of learning and still relevant for delivery of the training. Project Saraswati is the next logical step in the augmentation of the knowledge domain. It focuses on standardization of learning material, training delivery, assessment system and validation system so that knowledge reaches with same light and equal opportunity of learning is available to all. FDDI firmly believe that for the attainment of goal, team work is an essential part, while preparing this manuscript there are many individuals whose names may not appear on this page but their contribution had been immense as far as development of this learning material is concerned. The management of FDDI acknowledges contribution of each and every person involved in the shaping and preparation of this manual. This entire learning material was reviewed and conformity to the requirement of the syllabus including deliberation. The training material design guidelines and deliberation were carried out by Fashion Design Department. FDDI is also grateful to Mr. V. B. Parvatikar, Advisor (Technical) who has been instrumental in providing resources and guidance in proactive manner & for providing critical inputs at the time when it was needed the most. FDDI also acknowledge other team members notably Mr. Ashish Kumar (Manager, RCIP) and Mr. Sanjay Kamlay for documentation control and management activity. FDDI hope that this document will help immensely to the students and teachers alike in understanding of the subject in more comprehensive and objective way. It is the reader who provides us the inputs for further improvement. The management of FDDI welcomes all the suggestions to further improve this learning material. Ajay Kumar FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 4.     2   CONTENTS       Sr.  No   Content     1   Introduction  to  Fashion  Apparel  Merchandising       2   Sampling  +  Scheduling     3   Costing     4   Sourcing     5   Merchandising  Documentation                                                               FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 5.     3   UNIT  1   INTRODUCTION  TO  FASHION  APPAREL  MERCHANDISING       Fashion merchandising is the promotion of apparel sales and involves all of the tasks necessary to deliver the clothing requests and meet the needs of potential customers and designers.   Fashion merchandising is the promotion of apparel sales and involves all of the tasks necessary to deliver the clothing requests and meet the needs of potential customers and designers. Fashion merchandising involves developing campaigns, displays and advertisements, directing manufacturing and marketing as well as creating sales strategies for the fashion industry or the retail environment. Merchandising also refers to the necessary preparation that must be completed in order to ensure that the merchandise is accessible and appealing to the customers. You have to attract the customer to the product! The key to being a great merchandiser is to promote and obtain the goods that are going to be sold to customers. This can involve going to international fashion events, buying fashion goods at market and negotiating with merchants, manufacturers, retailers and designers. Fashion merchandising is a broad industry that requires a strong sense of style and trends in addition to business training. A successful career in fashion merchandising begins with formal training at a fashion merchandising school. Obtaining a fashion merchandising degree can open the door to many opportunities in this diverse field. Students can learn about industry trends, marketing, event planning and product development. Most fashion merchandising students choose careers in a management role or working with major apparel manufacturers and designers. Others may choose to own and operate a boutique of their own. Apparel Export Merchandising: In the apparel export business, the customer is the buyer who gives the order. So here the buyer’s requirements have to be fulfilled by the exporters so that they are successful in the business. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 6.     4   Apparel export merchandising may be defined as “all the planning and activities involved right from the buyer communication and order receiving till to the execution or shipment of the order by fulfilling the following factors (6 RIGHTS) : (1) RIGHT TIME (2) RIGHT QUALITY (3) RIGHT QUANTITY (4) RIGHT PRICE/COST (5) RIGHT CODE OF CONDUCT (6) RIGHT PLACE Right Time: From the exporter’ s perspective, if the goods are not shopped in the right time, then the delay will increase the cost in production, the buyer may ask to ship the goods through air or may ask for a discount or cancellation of the order. And also continuous delayed shipment may affect the long term business relationships. Right Quality: The exporters should k now about the quality requirement of their buyers. The quality requirement may differ from buyer to buyer. Right Quantity: In many manufacturing process which involves more human work, it is very difficult to achieve 100% efficiency. So the execution or shipment of the order with exact quantity of the order given by the buyer becomes very difficult. For that reason normally more or less than 3-5% quantity allowance is given by the buyers. Now, what is the right quantity for any given order? For example, if a buyer has placed an order of 10000 pcs with more or less 5% allowance, then what is the right quantity to be shipped? From the exporter’s perspective, the right quantity is order quantity plus given allowance. In this case the right quantity is 10500 pcs. Right Price/Cost: From the exporter’s perspective, the term is right cost. The exporter should make sure that the order is shipped less than or equal to the cost what he calculated and arrived the price to get the order. Higher cost will lead to reduction in profit and at one level it leads to loss. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 7.     5   For example if the cost arrived before profit is Rs.70 per pcs, then the cost of goods produced should be less than or equal to Rs.70. From the buyer’s perspective, the term is right price. The exporter should ship the goods at the price what greed by the buyer. He should not go for the price negotiation after the order is confirmed and it is in the midst of the production. The exporter may seek price re- negotiation only under major critical situations like economic crisis, raw material crisis, etc. Right Code of Conduct: The buyers are now more conscious about the corporate social responsibility (CSR) of the exporter to whom they are dealing with and in their supply chain. And most of the buyers have their own Code of Conduct (COC) to which the exporters have to oblige to have a business relationship. CSR deals with the policy on environment, health care, labour, education, poverty, human rights and women empowerment among others. Right Place: This term refers to making availability of the goods at the right place or destination without any problem. This term is most suitable to retail Merchandising where the goods are brought and placed at the right place or store for sales.                   FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 8.     6  Functions  of  a  Merchandiser:   FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 9.     7     The  following  responsibilities  are  the  utmost  functions  of  a  Merchandiser  in  an   Export  House.   INQUIRIES: 1. On receiving an inquiry(s) the merchandiser must prepare a checklist and immediately forward all information to 3 factories from the approved factory list for pricing. 2. The merchandiser must make sure that the factory specializes in the item being priced and has worked with the client before. 2a. Selection of supplier should be based on their previous performance, efficiency, delivery, etc. 3. If it is a new client then the merchandiser must discuss the inquiry(s) with the dept. head before sending out the inquiry(s). 3a. In case of a new factory, a factory evaluation should be conducted as per the set standards. Only Synergies Sourcing approved factories can be used for pricing, sampling, etc. QUOTING PRICES: 1. Prices must be sent within 1-2 days of receiving the inquiry. 2. All enquires must be entered in to the new development sheet. 3. Based on the lowest price the merchandiser must order proto sample. Min. 2 pieces must be ordered. One sample for the customer and one office sample. 4. Before quoting any prices to the customer. The merchandiser should get all prices approved by the Head of Merchandising or Managing Director. 5. If renegotiation is required then involve the dept. head, Head of Merchandising and Managing Director so that the best prices are finalized with the factories. 6. Final quoted price must be updated on the new development sheet.   FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 10.     8   PROTO SAMPLES: 1. Upon receipt of buyer’s specification, a thorough check should be conducted for precision. Obtain explanation from customer for anything considered vague. 2. Forward the specification sheets/Pattern to the selected supplier with all the explanation of specifications & technicalities on as & when received basis & update records. 3. Ensure timely availability of fabric. 4. Follow-up with the supplier to provide the sample latest within 2 days for local accessories & fabrics, in case of imported items maximum 12 days. 5. Upon receipt of the sample from the supplier thoroughly check the styling, measurement (if any), stitching, quality of the fabric, fabric construction/GSM, hand feel, washing standard, finishing of the sample & accessories if any & ensure compliance of the samples as per customer’s specifications. 6. The departmental head will give final approval. 7. At least 3 pieces of each sample should be developed. One for merchandisers, one for the customer & one for the suppliers for future references. 8. Prepare Proto Sample Checking Sheet & attach with the checklist (Format Attached). 9. Put duly filled sample card on the sample, format enclosed. 10. Forward the samples as & when received basis & advise customer accordingly with all the details of dispatch. 11. Follow with the customers for approvals/comments. 12. Once approved, advise supplier as well as Head of Quality Control. 13. Update Order Checklist, format enclosed. 14. Update the excel sheet accordingly, format enclosed.   ORDER PLACEMENT: 1. Once an order is placed the merchandise manager should fill out a PO checklist. 2. All missing information with regards to the PO will be forwarded to the customer within 1 day of receiving the PO. 3. A complete PO package must be prepared and sent to the factory within 24 hours of receipt of order from customer with a copy of P.O. to Commercial Department. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 11.     9   4. Prepare a projected production plan & forward the same to the Head of Quality Control & to the related supplier. The schedule should comprise of expected dates for fabric Quality Check, ILC, IPC, MPC & FRI. 5. Prepare a projected sample plan & forward the same to the related supplier with a copy to the Head of department. . PO PACKAGE FOR FACTORY: A new PO package for the factory must include the following: (i) Original PO sheet. (ii) Spec. Sketch and workman sheet. (iii)Color print artwork, lab dip, original fabric swatch and original trim card. (iv)Original sample (If available) Within 1 day of receipt of a new order the merchandise manager must call for a pre- production internal meeting. The following people must attend this meeting: (a) Head of Operation. (b) Merchandise Manager. (c) Acct. Related Merchandiser. (d) Head of QA Dept. (e) QA Personal. (f) Internal QA Personal. At the meeting the merchandiser will issue all information with regards to the order. This information includes: (v) PO sheet copy. (vi) Spec sheet with all related information. (vii) Lab dip card, print artwork, trims card, etc. (viii)Original fabric swatch (If available) (ix) Proto sample. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 12.     10   LAB DIP / PRINT STRIKE OFF: 1. Follow up with our customer for lab dips if necessary. 2. Upon receipt of the lab dips from the customer, immediately send a replica to the supplier. 3. Follow-up with the supplier for prompt delivery of lab dips latest within 5 days. 4. Obtain maximum numbers of lab dips from the supplier’s minimum 3 per color. 5. Upon receipt of lab dips from the supplier, match lab dips against customer specifications via visual test or if required by the customer via lab test. 6. Receive Lab Dips Format Sheet from our Lab & attach with the checklist, format attached. 7. Head of department will give the final approval prior sending the samples to the buyers. 8. Forward the lab dips to the customer along with the lab test report on as & when received basis. Make sure the buyer receives the lab dibs as per their requirement. 9. Follow with the customers for approvals/comments. 10.On approval inform supplier. 11.Update Order Checklist, format enclosed. 12.Update the excel sheet accordingly, format enclosed. SIZE SET SAMPLES: 1. Follow-up with the supplier for prompt delivery of Size Set options with actual fabric, maximum 4 days for local fabric & maximum 12 days for imported fabric. 2. Obtain 2 sets of samples of all sizes from the supplier. One for merchandisers & one for the customer. 3. Upon receipt of samples from the supplier, match these against customer specifications & comments. 4. Thoroughly check the styling, measurement (if any), stitching, quality of the fabric, fabric construction/GSM, hand feel, washing standard, finishing of the sample & accessories if any. 5. Prepare size set format sheet & attach with the checklist, format attached. 6. Head of department will give the final approval prior sending the samples to the buyers. 7. Forward the size set options to the customer’s on as & when received basis. 8. Ensure that buyer receives the samples as per their precise requirement. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 13.     11   9. Forward one or two pieces to the Head of Quality Control. 10.Follow with the customers for approvals/comments. 11.Upon receipt of approval advise supplier & Quality Control Head. 12.Update Order Checklist, format enclosed. 13.Update the excel sheet accordingly, format enclosed. 14.Obtain actual production schedule from the supplier. Make sure the schedule is in accordance with the shipment date. SAMPLE ACCESSORIES: 1. Follow up with the customer for sample accessories, if required. 2. Upon receipt of buyer’s accessories, a thorough check should be conducted for precision. Obtain explanation from customer for anything considered vague. 3. Upon receipt of the accessories from the customer, forward the same to the supplier on as & when received basis. 4. Factories will be responsible for the selection of accessories supplier. We should forward no such recommendations to the factories. 5. Follow-up with the supplier and quality control for prompt delivery of accessories for local max 4 days for imported max 12 days. 6. Obtain 4 sets of samples of all accessories with at least 3 different options from the supplier. One for merchandisers, one for the customer, one for the quality control, & one for the suppliers for future references. 7. Upon receipt of samples from the supplier, match these against customer specifications. 8. Thoroughly check with the original/instructions received from the buyer, artwork, color, quality, sewing allowance, bar code, price tags etc. 9. Prepare accessories format sheet, format attached. 10.Head of department will give the final approval prior sending the samples to the buyers. 11.Prepare at least 2 synergies trim/accessories cards. One for buyer & one for merchandiser. 12.Forward the accessories to the customer’s on as & when received basis. 13.Ensure that buyer receives the samples as per their precise requirement. 14.Follow with the customers for approvals/comments. 15.After approval advise the supplier accordingly. 16.Update Order Checklist, format enclosed. 17.Update the excel sheet accordingly, format enclosed. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 14.     12   PRE-PRODUCTION SAMPLES: 1. Follow-up with the supplier for prompt delivery of pre-production sample maximum 2 days. 2. Obtain 4 sets of pre-production samples from the supplier. One for merchandisers, one for the customer, one for the quality control, & one for the suppliers for future references. 3. Pre production sample in all size sets should be available to the merchandisers at least 5 days before the start of actual production. 4. Upon receipt of samples from the supplier, match these against customer specifications. 5. Thoroughly check the styling, measurement, stitching, quality of the fabric, fabric construction/GSM, hand feel, washing standard, finishing of the sample & accessories. 6. Prepare PP sample format sheet, format attached. 7. Head of department will give the final approval prior sending the samples to the buyers. 8. Forward the pre-production sample to the customer’s on as & when received basis. 9. Ensure that buyer receives the samples as per their precise requirement. 10.Follow with the customers for approvals/comments. 11.Once approved advised the supplier. 12.Update Order Checklist, format enclosed. 13.Update the excel sheet accordingly, format enclosed. DYE LOTS: 1. Follow-up with the supplier and quality control for the delivery of dye lot. 2. Dye Lot should be available (6 X 6, for every roll) to the merchandisers at least 5 days before the start of actual production. 3. Upon receipt of samples from the supplier forward the same to lab for lab test & match these against customer specifications. 4. Thoroughly see the color standard, color fastness, shrinkage, GSM/construction, hang feel, fabric quality, knitting tension, Lycra etc. 5. Receive Dye Lot sample format sheet from lab, format attached. 6. Head of department will give the final approval prior sending the samples to the buyers. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 15.     13   7. Update Order Checklist, format enclosed. 8. Update the excel sheet accordingly, format enclosed. BULK ACCESSORIES: 1. Follow-up with the supplier for the delivery of bulk accessories. 2. These accessories should be available to the merchandisers at least 5 days before the start of actual production. 3. Upon receipt match these against customer specifications. 4. Thoroughly check the accessories color & quality of trim against buyer’s comments. 5. Prepare Bulk Accessories format sheet, format attached. 6. Head of department will give the final approval prior sending the samples to the buyers. 7. Update Order Checklist, format enclosed. 8. Update the excel sheet accordingly, format enclosed. PRODUCTION: 1. Once sampling is completed Head of concern Merchandiser forwards the order file to the Head of Quality Control along with the approved sample & a copy of projected production schedule. Make sure the file is forwarded at least 5 days before start of actual production. 2. A meeting should be conducted between the Head of Merchandising Department, Concern Merchandiser, Head of Quality Control & Quality Control Officer (Production) discussing all the details of order. 3. Obtain an instruction sheet covering all the required information from the quality control officer & approve. 4. Make sure any new comments are added into the instruction sheet. 5. Regular follow up should be made with the suppliers & Quality Control regarding the status of production. 6. Make sure the Quality Control Department conducts all the required inspections i.e. Fabric Quality Testing, ILC, IPC, MPC & FRI for every order. For large volumes make certain, there are more than 1 MPC being conducted by the quality control. 7. Obtain daily production status from Quality Control & forward the same to IT for updating the Web Site latest by 11:00 every morning. 8. Obtain reports of all the inspection conducted i.e. Fabric Quality Testing, ILC, IPC, MPC & FRI for every order from quality control & keep a copy for record. 9. Visit the supplier at least during one inspection. 10.Make sure that FRI is conducted at least 2 days before the shipment date. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 16.     14   11.Once FRI is OK, inform buyer. 12.Update Order Checklist, format enclosed. 13.Update the excel sheet accordingly, format enclosed. SHIPMENT / SALESMAN SAMPLES: 1. Inform Head of Quality Control for Shipment Sample. 2. Obtain 2 sets of shipment samples from the Quality Control Department of all sizes covering all colors or as specified by the Customer. One or two pieces to be provided to concerned Merchandiser & all remaining to Manager Administration. In case where buyer requires shipment samples receive one complete set from Quality Control. 3. Shipment samples should be available to the merchandisers the next day of FRI. 4. Upon receipt of samples, conduct a thorough check & match these against customer specifications. 5. Thoroughly check the getup, styling, stitching, fabric quality, fabric construction/GSM, hand feel, washing standard, finishing, & accessories. 6. Prepare Shipment sample format sheet. 7. Head of department will give the final approval. 8. Merchandiser's are required to give in writing to QC Head with a copy to Head of Operations & their departmental head the name of our customers to whom we normally sent shipment sample. 9. If required, forward the shipment sample to the customer’s on as & when received basis. 10.Ensure that buyer receives the samples as per their precise requirement. 11.Forward one set of shipment samples to administration department. 12.Keep remaining samples in the department for future use & maintain a register. 13.Update Order Checklist, format enclosed. 14.Update the excel sheet accordingly, format enclosed. DELIVERY & COMMERCIAL DEPT. 1. Regular follow-up is essential to: a. Ensure goods are handed over to the forwarder. b. Ensure the forwarder books space/flight for timely delivery of goods. c. Ensure staffing of goods is conducted. d. Ensure the date of departure is as per the booking. 2. Obtain vessel/flight details from commercial department & advise buyer. 3. Receive acknowledgement of goods from buyer. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 17.     15   4. Update Order Checklist, format enclosed. 5. Update the excel sheet accordingly, format enclosed. DOCUMENTATION: 1. Conduct regular follow up with commercial department & supplier for the timely delivery of all the below mentioned documents to the buyer. (a) Packing List (b) Commercial Invoice (c) GSP (d) Country of Origin Certificate (e) Annexure III for Mexico Shipment (must be obtained 1 month prior shipment) (f) Country of Origin Certificate attested from Argentinean Embassy in India for Argentina shipment (must be obtained 1 month prior shipment) (g) Bill of Lading/Master Airway Bill is sent from supplier’s bank to buyer’s bank only. (h) Inspection Certificate 2. All these documents are required to be sent to the buyer first via email or fax & then original via courier. 3. Receive acknowledgement of documents from buyer.   Merchandising Communication: Though the merchandiser coordinates all the activities in an export order, it is necessary to clearly define the working communications of a merchandiser. It is one of the foremost functions of a merchandiser because the merchandiser has to communicate with different levels of people in his day to day activities. She/he has to communicate with: (a) The current buyers for the follow up of existing orders. (b) New buyers for potential future business prospects. (c) The boss and his superiors reporting day to day proceedings. (d) The concerned departments like production, purchase, accounts, shipping, etc., for following up the orders proceedings. (e) The suppliers in the procurement of necessary accessories. (f) His assistants in giving proper instructions and guidance. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 18.     16   Tech-Pack interpretation and Updating: A techpack is informative sheet which encompasses all the specifications of the requirements before embarking on the garment manufacturing process. contains all the details of any specific style of the garment. This document is usually prepared by the designer and finalized in consultation with the merchandisers, and then forwarded to bulk sampling department or to the production department for the reference and guide for bulk manufacturing. THE OBJECTIVE The Objective here is, once techpack for any style is frozen, the production department must be able to go ahead with the manufacturing process without having to refer back to the designer for any aspect of production. The merchandisers are thus able to go ahead and ensure that the required material as per the techpack is made available to the production department, in the right quantities at the right time. The marketing department can use this document in their presentation, particularly to the large format stores and their key customers. The preparation of a techpack and using it to manage and co-ordinate various activities in production brings in efficiency within the company as, various departments refers to the common document for discussion or carrying out any activity. Almost all garment manufacturing companies prepare a techpack. In many cases, the cutting instructions or job card issued to production acts as the techpack. However, the details given in the techpack are likely to vary with the sizes of the company. Large manufacturing companies generally have a detailed techpack for each of the styles under production, for the simple reason that any manufacturing that is not in line with what was desired results in a huge production loss. For exporters, preparation of a techpack is almost mandatory, as the buyers prefer to sign on the techpack before placing the order or would send in a techpack themselves. TECHPACK TECHNICALITIES FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 19.     17   The complexity involved in bulk manufacturing of the styles also governs the contents of the techpack, even if the designers are personally involved in the manufacturing especially on high-end fashion garments. From a regular men’s shirt made out of a single fabrics to a complex style for women involving two or more garments (a top, a bottom and probably an inner are sold together under one pack as a single style), with each garment involving multiple fabrics and trims, topped with additional production process such as embroidery, printing, patch work etc. The production flow, care and control needed while production will differ, and so will the form and content of the techpack for such styles. A detailed techpack is usually prepared for styles that have been approved for bulk manufacturing and for which elements such as the kind of fabrics and trims have been frozen. Before this stage, the designers may make various combinations of styles for approval and keep a note of the activities that have gone into creation of each combination of the styles. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 20.     18     FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
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  • 23.     21   UNIT  1   DISCUSSION  QUESTIONS     1) What  are  the  responsibilities  of  an  Export  House  Merchandiser?   2) What  is  a  Tech  Pack?   3) What  do  you  understand  by  Proto  Sample?   4) What  is  a  PO  Sheet?   5) Explain  a  Specifications  Sheet  and  its  significance.         ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 24.     22   ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________     FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 25.     23   UNIT  2   SAMPLING  &  SCHEDULING       Broadly garment samples are categorized as development samples and production samples. Samples that is made in development stage are as following - 1. Proto Sample 2. Fit sample 3. Salesman Sample/Photo shot Sample 4. Size set Sample 5. Pre-production Sample In production stage factory need to submit few more samples that includes 1. Top of Production Sample 2. Shipment Sample 1. Proto Sample: these samples are proto type of new design created by designers. This is the first sample in product development stage. Proto sample is made to communicate the design of a style or a line or to present garment structure. In proto samples fit and fabric detailing is not been considered. 2. FIT Sample: Once proto sample is approved, FIT is being made with actual measurement. Modification on the pattern is done to get desired fit of the garment. FIT is one of the most important factor to be considered during sample development. FIT sample is being tested on live model or Dress form for to verify garment fit and fall. 3. Salesman Sample: Salesman samples are made to put on display in the retail showroom. Salesman sample (SMS) are displayed for assessing customer's feedback and according to customers response buyers forecast demand of an particular style. Sales samples are made with actual fabric and trims and accessories. Buyer pays for salesman samples to the developer. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 26.     24   4. Size set Sample: The purpose of the size set is to check fit of the garment in different sizes. In this stage factory develops samples in multiple sizes. Generally, buyers ask size set sample in jump sizes, like S, L, XXL. Buyer check size set sample and give feedback to factory if anything need to be corrected. 5. Pre-production Sample: All the above samples are made in sampling department. Buyer wants pre-production sample (PP sample) to be made in actual production line, so that operators know what are they going to make. This sample is made with actual fabric, trims and accessories and made by sewing line tailors. PP sample must be approved by buyer or buying house merchants (technical persons) prior to proceeding actual production. 6. Top of Production Sample (TOP sample): Once production is online, few pieces is taken out in the middle of the production. Production pieces are sent to buyer as TOP sample. All buyers does not asked for TOP sample. Purpose is to cross-check whether factory is following PP sample specification or not. 7Shipment Sample: When style is being finished and packed for shipment, 2-3 finished and packed pieces with all packing details are kept for future reference. Shipment sample is kept by factory merchants and buyer's merchant. The approved shipment is sent directly to warehouse and merchants at the buyer do not get garment out of the shipment. That is why they keep shipment sample for future reference. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 27.     25   Below given a Sample Scheduling Chart :             FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 28.     26                 FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
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  • 31.     29   Pre Production Follow up: Buyer Sourcing: Buyer sourcing is the process of gathering or getting details about the new and prospective buyers. Once an export firm is established, the foremost activity is buyer sourcing. The details about the buyers can be collected from the following sources: (i) Websites (ii) Apparel industry related magazines or journals (iii) Apparel & Textile Trade shows or fairs (iv) Word of mouth contacts or referrals (v) Buying agents (vi) Embassies (vii) Hotels (viii) Trade directories Buyer Communication: Once a perspective buyer is identified, then the next step is to communicate with those buyers. This involves communicating through letters, fax or e-mails. An exporter should send a formal letter narrating about his company along with a full and detailed profile of his company. The profile should have a comprehensive details about the company like address, contact details, total employees, production details, product details, existing buyers, annual sales turnover, management system accreditation (ISO9000,SA8000,etc.),infrastructure details, etc,. Enquiry and Sampling: The buyer may send an enquiry once he is satisfied with the exporter’s quality. An enquiry is a requisition sent by a buyer asking price for their product which they want to place the order. The general content of an enquiry may have the details of garment style, fabric, colour & assortment, proposed order quantity, etc. Normally an enquiry will not have the full details of the particular order like quality specifications, packing details etc. An enquiry received from a buyer may not be the confirmation of order placement. The buyer may send the same enquiry to several exporters. Some buyers will ask for samples of their enquiry along with the price before confirming the order. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 32.     30   Pre-costing & Reply: After receiving an enquiry from the buyer, the merchandiser has to do the pre-costing for the product which is mentioned in the enquiry. Pre-costing is the process of estimating the tentative price of a product. Earlier days the costing was done by the owners but now mostly it is done by the merchandisers or by the costing department which some companies have and approved by the owner.While doing costing, various factors like style, fabric, colour & design, order quantity, currency exchange rate, accessories, etc., have to be taken care. Order Confirmation and Acceptance: If the price offered to the buyer is acceptable to him, then he confirms the order to the exporter. Some buyer will confirm the order after the approval of Fit Sample and the price. The order confirmation should be in the form of Order Sheet/Purchase Order from the buyer in a proper format duly signed and bearing the office seal of the buyer. Order Review: Order review is a small activity which is just going through or reading the order sheet carefully to check for the particulars with that of enquiry if there is any variations and also for the requirements of the particular order. For eg., in the enquiry the buyer may have asked for the price for higher order quantity whereas while confirming the order, he might have placed less quantity. The Order Sheet will have the full details of the order like quality requirements, packing details, accessories details, etc., so the merchandiser should read the Order Sheet carefully to check whether the quality requirement can be met or to make not for any important instructions for the order like label placement, wash care instructions, spellings of some important words, etc. Any discrepancies in the Order Sheet should be informed to the buyer at the initial stage itself and should be corrected before the commencement of the production. Though it is a small activity but it is an important activity which would help in effective and efficient follow up and the execution of the order. Planning and Programming: After the order review is done and the next step is to do planning and programming for the particular order. Planning involves the time calculation and scheduling of the order whereas programming involves decision on certain activities in the particular order. Planning includes master planning and scheduling or critical path. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 33.     31   Master Planning: Master-planning is the activity of estimating the total time requirement for the order and to find out whether the order can be sent in time and if not the necessary alternatives to execute the order in time. Before we fo in for master planning, it is necessary to set the target date for the shipment. The target date is normally set one week to ten days earlier than the delivery date mentioned in the Order Sheet. If the final inspection date falls on or before the target date, then the order can be shipped in the given time. If not, then the revised planning should be done by outsourcing or increasing the capacity levels for various activities like knitting, processing, sewing, etc., so that the shipment can be done in the right time. Scheduling or Critical path: Scheduling or critical path is the activity of giving time schedules to the various activities based on the maste plan. It will be in a table format which tells about the process sequence for a particular order and their corresponding schedules or timings or dates for each process, from the date of order confirmation till to the shipment. The scheduling table consists of main two columns ‘Planned’ and ‘Actual’. First, the planned column should be filled with the corresponding start and finish dates that are in the master plan table. Then the copy of this may be sent to the buyer/buying office, concerned departments like knitting, processing, cutting, sewing, etc.(if all are under one organization) and may be put online in the intra office network so that the superiors can monitor it. Generally, as soon as the order is confirmed, the buyer will ask for the critical path of the particular order. Then as the order is being processed, the ‘Actual’ column has to filled in with the actual start and finish dates of the corresponding activities. If there is any deviation in the planned and actual dates, the number of days of delay has to filled in the ‘Delay’ column. If the number of delayed days equals or exceeds the total allowance days that were calculated to set the target date, then it means that the order cannot be executed on time. The Scheduling is also referred as ‘Route Card’. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 34.     32   Factors for Route card/Scheduling: While making scheduling or critical path, the following factors have to be considered: 8. Order Quantity 9. Product Style 10.Process Sequence of the Product 11.Delivery Date 12.Ship Schedule 13.Number of Process 14.Production capacity of own units and vendor units for various processes like knitting, dyeing, printing,etc. 15.Availability of production capacity 16.Nature of Raw Materials 17.Lead Time for various processes and activities like sampling, approvals, material purchase, testing, inspection, transportation, document certificates,etc. 18.Shipment details like mode of shipment,any instructions,etc. 19.Inspection systems for fabric,garment, production,etc. – Self, second or third party 20.Packing details or assortment details 21.Allowance time for unexpected happenings 22.Public holidays, festivals,etc., which affect production, approvals, getting document or certificate TNA Calendar: Time and Action (TNA) calendar is one of the most important tools for managing a project. In garment manufacturing each order is not less than a project to a merchant. Because, from order receiving to order completion involve number of tasks of various duration and requirement of resources. Few tasks come one after another and others move at the same time. Like number of processes, lots of people are involved to accomplish an order. Secondly each order is unique in terms of process and time demand. So, a detailed plan with well defined responsibility is must for each order to finish it before time or on time. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 35.     33   Normally merchants prepare a plan in a spreadsheet listing down key processes in one column and planned date of action for each processes is noted in another. This planning sheet is called time and action calendar. Once TNA calendar is made, merchant can easily list down her daily 'to do list' for the day and start doing work one by one. According to TNA schedule processes are executed on daily basis to track whether an order is on track or getting delayed. Critical Path method (CPM) for TNA preparation: Fashion merchandising is a much complicated network of linier and non-linier activities to perform. Activities performed are interdependent and need of synchronization between succeeding and preceding activities to make a non-linear process network. The longest chain of activities considering task dependencies is called critical path. It is a common practice industry to list activities from order receipt to delivery in linear sequence and assigning time duration to each activity by backward planning, which is wrong as the activities are never linear since there are lot of parallel activities. Therefore, the sequence of activities should be drawn either as PERT network or Gantt chart format. Even though most of the users are aware of the term 'critical path method' (CPM), CPM may be elaborated as ‘critical’ means 'possibility of non-conformance is higher' as per previous experience; some even link 'critical' with cost involving that activity. Everybody select 'critical' activities hypothetically based on intuition or previous experience or buyer's milestones and no one actually makes PERT network of activities and then arrive at CPM. It was found that in majority of the cases the buyer specifies target dates of key activities and based on those target dates the manufacturing organization creates their own TNA adding buffer days (to ensure that buyer target dates are not missed). It was also a common practice to have two TNA: one with few main important activities (also called milestone activities) that are suggested by the buyer, and another one with more number of in- between micro activities (in-house activities) to exercise control over macro activities PERT network or Gantt chart should be mandatorily prepared to decide upon which all activities should be there in TNA calendar. Merchandiser must prepare either and the resultant critical path should be the activity chain for TNA calendar, all activities falling in critical path are critical activities. Critical activities should always be on focus, a single minute delay in any of the critical activities may lead to final shipment delay. Structure of TNA: Normally merchandisers prepare a plan of the order in a spreadsheet by listing down the key processes in first column and planned date of action for each process in the next column. This planning sheet is popularly known as time and action calendar (TNA). Once FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 36.     34   TNA calendar is made, then it can be easy for merchandiser list down their daily 'to do list' and taking it one by one. As per TNA schedule processes can be executed on timely basis to track whether an order is on track or it will get delayed. In order to make TNA below mentioned information must be available - Process flow of an order with the list of task which need to be performed - Production capacity of cutting, sewing, washing and finishing - For sewing - batch wise and product wise capacity (production per day per batch) - Lead time of activities, e.g. raw material lead time, sampling lead time, etc. - Shipment date or planned ex-factory date Normally TNA does not depend on fabric used in merchandise like woven or knits. TNA is largely depends on the particular process flow of an order, machine requirement and available production capacity. In TNA planned cutting date (PCD) and ex-factory date these are the two most critical dates. Sample TNA for formal shirt manufacturing order: The TNA derived by assuming the order of 10000 pieces of formal shirts, made out of 100% cotton, plain woven solid dyed fabric, with embroidery logo on it. The order is for SS 2013, delivery date 1stMarch 2013, shipment at New York-USA.     FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 37.     35     FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 38.     36   Programming: Apparel manufacturing involves a combined network of various activities like raw materials purchase, knitting, weaving, processing, sewing, etc. The decision on what, when where, how, who, etc. has to be made for all these activities. Programming is the activity of deciding all these things. Generally programming is done for the following things. (i) Yarn Programming: This includes calculation of total yarn requirements for the particular order, deciding the yarn count, other quality parameters, etc. The total yarn or fabric consumption for the particular order is done depends on the number of sizes, order quantity, cutting and other wastages, etc. (ii) Knitting/Weaving Programming: In knitting, the decision on fabric diameter fixation, greige fabric GSM, selection of m/c. number of fabrics for the particular order etc. and in weaving the decision on selection of looms and suppliers, greige fabric width number of fabrics for the particular order etc. has to be decided. (iii)Processing Programming: This includes estimating the fabric quantity per color for dyeing, printing, finishing, selection of m/c and methods and also includes decision on printing and finishing parameters. In dyeing, number of colors, machine capacity, number of fabrics, special finishing, testing and approval time, outsourcing, time for reprocess etc,. are to be considered. In printing, number of designs, number of colors, number of fabrics, method and style of printing, production capacity, testing and approval time, outsourcing, time for reprocess etc. are to be considered. (iv) Sewage programming: Here, this includes programming of cutting, sewing, checking, ironing, and packing are done. In cutting, method of cutting, marker efficiency, production capacity, assortment quantities, number of fabrics and sizes/color, etc. are to be considered. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 39.     37   In sewing, production method (batch or line production), type of machines required, number of m/c’s or lines required, make or outsource, process sequence etc. has to be decided. In ironing, ironing or pressing, type of folding, etc. are in packing, packing style, assortment, carton marks, etc. are to be considered. (v) Sampling Programming: Apparel production requires various samples at various stages which are to be approved by the buyer; Programming for samples from Fit sample to shipment samples has to be made. (vi) Accessories Programming: The programming for purchase of various production accessories like sewing thread, buttons, zippers, etc. and packing accessories like carton box, poly bag, labels, tags, etc. are done here. After planning and programming is completed for the particular order, the actual processing of the order is done starting from yarn purchase, knitted, processing, fabric inspection, cutting, sewing, checking, ironing, packing, final inspection and shipment as per the planning and programming. Continuous and consistent follow ups to be made so that the activities are completed as per the planning.                                     FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 40.     38   UNIT  2   DISCUSSION  QUESTIONS     1) What  are  the  different  types  of  Samples  in  Sampling  Process?   2) What  is  a  FIT  Sample?   3) What  do  you  understand  by  Buyer  Communication?   4) What  is  a  TNA  Sheet?   5) Define  CPM.   ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 41.     39   ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________     FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 42.     40   UNIT  3   COSTING     Estimating correct manufacturing cost is essential for a successful business. You might be preparing garment cost sheet and need to find manufacturing cost per garment. But don't know exactly how to do it and don't have full confidence calculating the same. Don't worry. Read this post and learn the basic method of determining Cost of Manufacturing (CM) of apparel products. Cost of manufacturing can be defined as the cost incurred by the factory to run the factory making garments. Factory running cost includes direct labor cost and manufacturing overhead. Here manufacturing overheads are indirect workers wages, staff salary, power and fuel cost, repair and maintenance cost, factory rent, administration cost etc. This cost is also known as operating cost. Cost of Manufacturing is determined for per unit garment. There are two ways to find Cost of Manufacturing (CM) for a particular style/order. 1. Based on Standard Time (SAM) of the product 2. Based on Daily Production Average 1. CM Calculation Based on Standard Time (SAM) of Product Making To get better accuracy in cost estimation one should prefer this procedure. But to many small size companies no such resources available to measure product SAM and data for the following parameters. Following parameters are essential for cost calculation in this method. 1 Product SAM: Standard time of the garment. Standard time of a garment is measured by using Time Study and using synthetic data. 2 Target Efficiency: Target efficiency percentage is at what % you are expecting running a specific product and order quantity. 3 Operating Cost per day/machine - Operating cost is factory running cost. Operating costs are all cost incurred to run the business other than material cost. Calculate monthly operating cost and then calculate daily operating cost. Calculate per machine operating cost. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 43.     41   Formula: Cost of Manufacturing = (Operating cost per day per machine* SAM)/(Target Efficiency% * Working hours * 60) In the following table an example is shown for calculating manufacturing cost using SAM and Daily Production figure. Table-1: Calculation of Cost of Manufacturing In the above example, garment SAM is 21 minute, target efficiency 60%. So, actual time would be 35 minute to make a garment. Factory works 8 hours in a day and operating cost per day per machine is Rs. 1022. Cost of manufacturing is Rs. 74.52 FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 44.     42   Also Read: How Factory Overheads is Calculated in a Garment Export Business 2. CM Calculation Based on Daily Production Figure This method is widely used by garment manufacturing factories. Cost of Manufacturing calculation is done based on historical production data. This is an easier method compared to above one. Information needed to find Cost of Manufacturing 1 Daily production: Find average daily production of a particular style (garment) based on earlier (historical) production figures. Calculate daily average production of the factory. 2 Manpower involved in production: How many sewing machines or sewing operators are utilized to produce above quantity 3 Operating cost per day/machine: As explained above. Formula Cost of Manufacturing = (Operating cost per Day / Total garments to be produced per day) See the example method -2 in the above table. In the example, daily product is 550 pieces. 40 operators worked to produce these pieces. Operating cost per machine is Rs. 1022 per day. So cost of manufacturing is Rs. 74.33 P.S. Data used in the above examples are hypothetical. Difference between Estimating and Costing: Although estimating and costing both are required to decide the price of the product, even then the two are different as explained below: 1. Estimation is aimed to calculate the probable cost of the product before the manufacturing starts, and while costing is the determination of actual cost of the product by adding various elements of expenses incurred. 2. Estimation requires a highly technical knowledge hence an estimator is basically an engineer and costing requires the knowledge of accounts and therefore costing is done by accountants. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 45.     43   3. Estimation forecasts about the probable cost and hence one can know before the manufacture that the manufacturing of the product shall be profitable or not, and whether one should manufacture it or not, but costing tells after the manufacture about the profitability of the product. How to Calculate Raw Material Cost for Garments? Material cost is the major cost component of a garment manufacturing costs. A correct cost calculation method will give you better projection of garment cost for a style. In this article how to calculate direct materials cost have been explained in details. Raw materials required for making a garment is sourced from suppliers. Main materials are like fabric, labels, sewing thread, hang tags, trims etc. So to have correct material cost you must have price knowledge of each item. Steps used for material costing estimation are – • Preparation of material requirement sheet • Material price listing • Preparation of material cost sheet Prepare material requirement sheet List down all items required and calculate consumption per unit for all materials to be used in garments. For an example, let you are going calculate material cost for a polo shirt. To make polo you need knitted fabric – Single jersey/pique, cuff and collar rib. Sourcing of knitted fabric can be done three ways - You can directly purchased dyed fabric or - You can source yarn, knit fabric and process the knitted fabric as per your requirement or Purchase dyed yarn and knit. Let you will purchase yarn and get knitting and dyeing processes done by job workers. To go through this process collect the pricing list of different types of yarn (or at least for the yarn that you will purchase for your product), knitting cost, knitting loss%, dyeing cost per kg and process loss% from suppliers. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 46.     44   Cut, make and Trim (CMT): In the apparel industry the buyer needs to assure the quality of raw materials. Textile fabrics of the quality or nature demanded by the buyers may not be available in the sourcing country and raw materials may be required to import. In many instances, the buyer takes on the task of purchasing and shipping the raw materials for the apparel production facility. Buyer only pays a fee to the factory for sewing, trimming, and manufacturing the final goods which is named as CMT. The finished goods are then shipped to the buyer. Secondly when a larger manufacturer uses production capacity of the subcontractors and job workers, subcontractors are paid for CMT only. Material Price listing: Collect material price quote for all the material you need to purchase from different vendors. Prepare database for the current market price of raw materials. For example here is one Price List Yarn: The costs for different yarns are – 20s Combed – Rs.105/kg 30s Combed – Rs. 115/kg 50s Combed – Rs.140-145/kg 2/60s Combed – Rs.200/Kg 2/60s dyed yarn – Rs.420/Kg dark shade Knitting cost: For Single Jersey – Rs.15/kg For Rib - Rs.18/kg For Interlock - Rs. 30-35/kg Knitting loss: 2% Dyeing cost: Rs. 80/kg for dark shades Process loss (Dyeing): 6% FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 47.     45   Fabric cost: Ready to use fabric cost is calculated using basic calculation as shown in the following table. Cost of the knits fabric is represented in price per Kg. Shell Fabric Collar/Cuff Fabric Description 2/60s single jersey 2/60s rib Yarn cost (Rs.) 200.00 200.00 Knitting cost (Rs.) 18.00 20.00 Knitting loss (2%) 4.36 4.40 Processing cost (Dyeing) (Rs.) 80.00 80.00 Processing loss (6%) (Rs.) 18.14 18.26 Cost per Kg Rs. 320.50 Rs. 322.66 Fabric Consumption: Next step is to find requirement of fabric for the polo. Suppose for this polo shirt you need shell fabric 0.32 Kg and Ribs for cuff and collar 0.080 Kg. Prepare material Cost Sheet Once you find fabric cost and fabric consumption prepare material cost sheet including all other material required to make a garment ready for sale. An example of material cost sheet has been shown below. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 48.     46   Items Consumptio n UOM* Rate (Rs.) Amount (Rs.) Remark s 1 2/60s single jersey 0.32 KGs 320.5 102.56 2 Cuff and collar ribs 0.08 KGs 322.66 25.81 3 Sewing thread 159 Meters 4 approx. 4 Buttons 3 Gross 2 approx. 5 Main label 1 Unit 1 approx. 6 Care label 1 Unit 1 approx. 7 Hang Tags 1 Unit 3 approx. 8 Price Tags 1 Unit 2 approx. 9 Poly bags 1 Unit 1 approx. 10 Kimble 1 Unit 0.5 approx. Total Cost 142.87 *UOM - Unit of measure So, Total fabric cost is Rs. 128.37 and including other material costs total cost of the material for making this Polo Rs. 142.87 Now for each item merchants generally purchased extra quantity of inventory (from 2% to 7%) as buffer. This excess cost due to extra purchase of material is added into the garment costing. In the daily production report, many factories include actual garment production cost from the day of loading a style. In this article production cost represents sewing room cost. Factories consider all direct and indirect personnel who are involved in garment sewing and managing sewing lines in calculating garment production cost. In case, a production manager handles 10 lines then one tenth of his daily salary is considered as cost incurred FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 49.     47   per line per day. If a floor-in-charge runs 3 lines (considering each line run single style) then one third of his daily salary is considered as cost incurred in production of a style. Following cost sharing method, daily salary of all personnel is calculated for a style. If operators work overtime and others stay to assist them then overtime salary is also added to total daily wages. Overtime salary (hourly rate) may differ from the normal working hours. “Actual Garment production cost” is a component of daily production report (DPR). Actual garment cost is represented in two ways – v Actual garment cost for the day and v Till date average cost per unit Formula used for the cost calculation = Total salary for the day/ Total production (in pieces). In the following table an example of cost calculation has been shown that is normally used by garment manufacturing factories. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 50.     48   (Note: All salaries and manpowers used in the above costing sheet are only for example.) In the above example – Production manager handles 5 lines and Floor-in-charge handles 4 lines. So, their salary is divided by 5 and 4 respectively as a contribution to each line. If you want to use this sheet for your factory, add manpower in the list and their actual daily wages (salary per day) according to your factory. During learning curve, production cost per piece will be high and as learning curve ends daily production cost goes down. At this time, actual production cost is being checked with FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 51.     49   target cost. It helps company to assess factory performance in term of meeting garment cost. Production Cost Mapping for Few Apparel Items : To provide you an overall idea about cost mapping of garment production 3 items has been selected like Basic V-Neck Long Sleeve T-Shirt, Ladies Turte Neck Pullover and Mans 5 Pocket Denim Jeans. In the following table on the product image total FOB break up has been shown. Total production cost of the items and fabric specifications given below the images. Finally, process wise cost break up has been given below. This study was done by Progress, gtz. based on data from Bangladeshi apparel Manufacturers. Basic V-Neck Long Sleeve T-Shirt Ladies Turtle Neck Pullover Man's 5 Pocket Denim Jeans Total production cost of $ 2.5 (as of July 2007) Color: White Fabric: 1X1 Rib Weight: 240 GSM Total production cost of $ 3.25 (as of July 2007) 50% Cotton, 50% Acrylic Fabric: Single Jersey Total production cost of $ 5.8 (as of Dec 2008) Yarn & Accessories Knitting 58% 3% Yarn & Accessories Flat Knitting 64% 15% Fabric & Acc. (Raw Materials) 75% FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 52.     50   Dying Cutting Sewing Finish & Pack Administrative 28% 19% 5% 3% 3% Linking Trim & mending Wash, Finish & Pack Administrative 5% 3% 2% 11% Cutting Sew Wash Quality Administrative 1% 3% 10% 1% 11% Garment Value Chain Analysis Whenever I go for shopping clothes from retail showroom and stores, the retail price of the clothes stops me to go for purchasing. It may be true to some of you. The final retail prices are really crazy. How they can charge that much money for the basic products? As garment manufacturing expert I know how much money has been spent in fabric and manufacturing. To get the answer of my question I started researching for value chain of apparel products from fabric to retail. Finally I got two examples that helped me to understand who are taking share of total price. It may not be match with all types of apparel products but you will get a broad idea on the garment value chain. Example 1: Value chain analysis of a Casual Frock Cost Parameters Value Addition Percentage Rate (INR) Share of Total Retail Price Raw Material (Fabric, Zipper, thread) 70 70 28.7 Drafting, designing and Cutting 30% 21 8.6 Embroidery 33% 30 12.3 Stitching 20.70% 25 10.3 Hand work 27.40% 40 16.4 Ironing & Packaging 13.40% 25 10.2 Whole seller margin 15.60% 33 13.5 Total 244 100 FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 53.     51   Share of Total retail Prices has been shown in the following pie chart#1 Example 2: Value chain analysis of a Party Wear Frock Cost Parameters Value Addition Percentage Rate (INR) Share of Total Retail Price Raw Material (Fabric, Zipper, thread) 300 300 28.1 Drafting, designing and Cutting 30% 90 8.4 Embroidery 35% 137 12.8 Stitching 25% 132 12.3 Hand work 30% 197 18.5 Ironing & Packaging 4% 34 3.2 Whole seller margin 20% 178 16.7 Total 1068 100 FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 54.     52   Share of Total retail Prices has been shown in the following pie chart#2 COST OF MAKING (CM) : To find out the CM of a item you must need the following 06 (six) information at first, as listed below: i. Monthly total expenditure of your factory with factory rent,commercial cost, electricity bill, water bill, transportation, repairing, worker & stuff wages etc. (8hrs/day) in bangla taka. Suppose - 50,00,000/- tk ii. Qty of running Machine of your factory of the following month (which total expenditure we have consider here). Suppose - 100 machines iii. Number of machine to complete the layout for the following Items (which CM we are calculating). Suppose - 25 machines iv. Production target/capacity of the following items, per hour from the existing layout, excluding alter & reject. Suppose - 200 pcs per hour v) Total working day of the followings month,(though the house rent,commercial expenses,machine overhauling & some other cost remain same)Suppose- 26 days. vi. If you want to calculate the CM in US$ (dollar) then pls input present dollar conversation rate BDTk. Suppose - $1 = 74 taka. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 55.     53   COST OF MAKING (CM) : = {(Monthly total expenditure of the following factory / 26) / (Qty of running Machine of your factory of the following month) X (Number of machine to complete the layout)} / [{(Production capacity per hr from the existing layout,excluding alter & reject) X 8}] X 12 / (Dollar conversion rate) = [{(50,00,000 / 26) / ( 100 ) X (25)} / {(200) X 8}] X 12 / 74 = [{192307.7 / (100) X (25) } / 1600] X 12 / 74 = (48,076.9 / 1600) X 12 / 74 = 30.048 X 12 / 74 = 360.58 / 74 = $4.873 / dozen (this is the making cost (12 pcs) of the following items) However, normally at present (after starting the new salary scale)in Bangladesh we calculate the CM of any item consider the overhead sewing machine cost 1200 tk to 1400 tk/day that means $16.216 to $18.92/per day. Above is for a non-compliance factory. For the a compliance factory the per day machine cost will be 1800 tk to 2100 tk ( $24.32 to $28.37) SO, if the an items produce 1600 pcs per day using 25 machines then the CM will be = Overhead machine cost X require machine / produce quantity X 12 / $74 = 1400 X 25 / 1600 X 12 / 74         FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 56.     54   UNIT  3   DISCUSSION  QUESTIONS       1) How  to  calculate  raw  material  costs  for  garments?   2) Explain  SAM.   3) What  do  you  understand  by  CMT?   4) Elucidate  CM.   ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 57.     55   ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________       FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 58.     56     UNIT  4   SOURCING       Bill of Materials (BOM): A Bill of Materials (BOM) is a list of inputs that go into your product. If the TechPack was a broad overview of the style itself, the BOM is specific about the materials. Not only is it specific about each input, it is specific per colorway. In other words, if you have three colorways, you will need a BOM for each color. Perhaps we could think of a BOM as a list of ingredients. If it is not on the BOM, it doesn’t go into the product. With the BOM (which we need for costing), we also need to track the vendor -and testing- of each input. Again, everyone needs to do this (shrinkage etc) but kid’s producers more than anyone (which is why children wear producers who survive will become the epitome of professional practices in the trade). BOM information: 1. Product code (often called a style no. for fabric or input) 2. Product description 3. Vendor 4. Cuttable Width, size (buttons) or length (zippers) 5. Test results (shrinkage, lead etc) 6. Estimated/actual yield (allocation, qty used) 7. Required processing (sponging, dyeing, enzyme bath etc) For our own convenience, we might want to add a field that lists whether this is a “common” item meaning it’s used in a variety of your products. If we like, we can also add costing information per item. Most firms split that up because it’s proprietary but if we are the only one doing all the work, it doesn’t matter. We also need to keep in mind that contractors will need to see your BOM. Contractors often use the BOM as a checklist to make sure they’re received all of your inputs. Don’t forget to include the most common and mundane items. Thread and labels (care, tracking and company) are often omitted. Note about vendor sources on the BOM: Although it is proprietary and we may not want our contractor to see this but it can be helpful if they have this information. One, some vendors FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 59.     57   aren’t the best. If the vendor is known to sell crocked goods, the contractor will be sure to be extra vigilant when spreading. Second, the contractor may know a better source than whoever you’re using. Lastly, if we run short on a given input, contractors often know how good a vendor is about turning an order.   UNIT  4   DISCUSSION  QUESTIONS         1) What  is  BOM?   2) What  is  Programming?   3) What  is  Scheduling?   4) What  kind  of  information  do  a  BOM  consist  of?     ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 60.     58   ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________   FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 61.     59     UNIT  5   MERCHANDISING  DOCUMENTATION     Export License Majority of goods are allowed to be exported without obtaining a licence. Export license are only required for items listed in the Schedule 2 of ITC(HS) Classifications of Export and Import items. An applicaton for grant of Export License for such items must be submitted to the Director General of Foreign Trade (DGFT). The Export Licensing Committee under the Chaimanship of Export Commissioner considers such applications on merits for issue of export licenses. Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) items are also permitted under a license or prohibited altogether. Export of Samples Export of samples upto specified limits are allowed free. The exporter is required to be registered with the appropriate Export Promotion Council to avail of this benefit. Samples with permanent marking as “sample not for sale”are allowed freely for export without any limit. Processing of Shipping Bill In case of export by sea or air, the exporter must submit the ‘Shipping Bill’, and in case of export by road he must submit ‘Bill of Export’in the prescribed form containing the prescribed details such as the name of the exporter, consignee, invoice number, details of packing, description of goods, quantity,FOB value,etc. Along with Shipping Bill, other documents such as copy of Packing List, FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 62.     60   Invoices,Export Contract, Letter of Credit,etc. are also to be submitted. There are 5 types of shipping bills:- 1.Shipping Bill for export of duty free goods: This shipping bill is white colored. 2.Shipping Bill for export of goods under claim for duty drawback: This shipping bill is green colored. 3.Shipping Bill for export of duty free goods ex-bond: That is, bonded warehouse. This shipping is pink colored. 4.Shipping Bill for export of dutiable goods: This shipping bill is yellow colored. 5. Shipping Bill for export under DEPB sheme: This shipping bill is blue in color. The Bills of Export are: FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 63.     61   (i) Bill of Export for goods under claim for duty drawback (ii) Bill of Export for dutiable goods (iii) Bill of Export for duty free goods (iv) Bill of Export for duty free goods ex-bond Let Export Order: After the receipt of the goods in the dock, the exporter may contact the Customs Officer designated for the purpose and present the checklist with the endorsement of Port Authority and other declarations along with all original documents. Customs Officer may verify the quantity of the goods actually received and thereafter mark the Electronic Shipping Bill and also hand over all original documents to the Dock Appraiser, who may assign a customs officer for the examination of the goods. If the Dock Appraiser is satisfied that the particulars entered in the system conform to the description given in the original documents, he may proceed to allow ‘Let Export’ for the shipment Export Quota Restrictions imposed on own exports by a country, either voluntarily or on the behest of other countries. Reasons for its imposition may include: (i) Protection of local industry from shortages of raw materials (ii) Protection of local population from shortages of foodstuffs or other essential goods (iii) Maintenance of international commodity prices or orderly marketing (iv) Export restraint agreement with members of a producer’s cartel(such as OPEC) Or FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 64.     62   (v) Export restraint agreements with consumer countries A restriction imposed by a government on the amount or number of goods or services that may be exported within a given period, usually with the intent of keeping prices of those goods or services low for domestic users. Export Documentation: The exporting activity involves several commercial and regulatory procedures and these procedures involve considerable documentation requirements. Besides the documentation pertaining to the commercial aspects of the export business, there are documentation requirements of a regulatory nature like excise clearance, foreign exchange regulations,etc. The export documentation involves the preparation of the specified number of copies of the prescribed documents pertaining to the different procedures and different forms used in the export documentation have been standardized and aligned. Basically the export documents are classified by general and by shipment stages. The general documents are further classified into commercial and regulatory documents. The shipments stages documents are classified into documents related to goods, shipment, payment, inspection, excisable goods, foreign exchange control regulation. FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5
  • 65.     63   Commercial Documents: The commercial documents are required for making the physical transfer of goods and their title from the exporter to the buyer and the realization of export contract, by customs of trade. The commercial documents may be classified into principal and auxiliary documents. 1. Principal documents: Principal documents are the documents which have to be sent to the buyer by the exporter after the shipment is executed. There are 8 principal documents which are as follows: (v) Commercial Invoice (vi) Packing List (vii) Bill of Lading (viii) Combined Transport document (ix) Certificate of Inspection/Quality Control (where required) (x) Insurance certificate/Policy (in case of CIF, CIP term) (xi) Certificate of Origin (xii) Bills of Exchange and shipment advice 2. Auxiliary documents: FDDI/FD/SLB/FASHIONAPPARELMERCHANDISING/SEM5