Apparel Industry Management

Apparel Industry Management 3(3+0)

Lesson 16 : Supply Chain Management

Suppliers

Good suppliers are a vital link in the supply chain. Late deliveries of parts or materials or missing or defective terms can disrupt production schedule, increase inventory costs and cause late deliveries to end products.
Two important things to be considered while choosing supplier is – quality of product and services on time delivery.

Factors to be considered	Questions to be answered
i) Lead times and on-time delivery	What lead times can the supplier provide? What procedure does the supplier have for assuring on-time deliveries? What procedures does the supplier have for documenting and correcting delivery problems? Are there procedures?
ii) Quality and Quality assurance	What procedures does the supplier have for quality control and quality assurance? Are problems and corrective actions for quality documented? Are investigations conducted to determine and correct the causes of non-conforming materials?
iii) Flexibility	How flexible is the supplier in handling changes in quantity, delivery schedules and product or service changes?
iv) Price	Are prices reasonable given the entire package the supplier will provide? Is the supplier willing to negotiate prices? Is the supplier willing to engaged in a joint effort to reduce costs (and prices)?
v) Location	Is the supplier located nearby?
vi) Product on service changes	How much advance notifications doe the supplier given when changes are made in products or services? How financially stable is the supplier?

A manager must decide the factor weightage to assign each factor for each factor.

Vendor Analysis: It is the process of evaluating the sources of supply in terms of price, quality, reputation and service. The factors to be considered while selecting a venture are

1. Price – most important factor along with discount offered
2. Quality – a company may spend more to obtain high quality
3. Services – special services such as replacement of defeature terms, instructions in the equipment repair of equipment
4. Location – location of supplier effect shipping time, transportation costs and response time for such orders or emergency services
5. Inventory policy – a space pact in hand could replace a emergency breakdown of equipment
6. Flexibility – the willingness and ability of suppliers to respond to changes in demand and accept design changes

Suppliers Audit – periodic audits of suppliers are helpful in getting current information on supplier’s production capabilities, quality and delivery problems and so on. If the audit reveals problems areas, a buyer can address these before they result in services problems.

Supplier’s audits are also a first step in the supplier certification.

Supplier Certification: It is a detailed examination of the policies and capabilities of suppliers. The certification process verifies that a supplier meets or exceeds the requirements of a buyer. ISO 9000 is the most widely used international certification.
Suppliers are a source of ideas that contribute to the competitiveness of an organization. Nine areas in which potential ideas from suppliers could lead to improve competitiveness are:

1. Reduced the cost of making the purchase
2. Reduced transportation costs
3. Reduced product costs
4. Improve product quality
5. Improve product design
6. Reduce the time it takes to get the product to the market
7. Improve customer satisfaction
8. Reduce inventory costs