Strategic Business Pattern of Apparel Buying House or Sourcing Hub Office
Md. Shahadat Hossain
Working on sourcing liaison office in Dhaka of a retail brand
B.Sc. in Textile Engineering, Daffodil International University
Executive MBA in Marketing, North South University
There are a good number of apparel buying or sourcing hub offices of global retailers have been operated in Bangladesh. Besides that, the trading/agent offices are also working at greater extent here. These offices closely work with manufacturers for order placement and execution. But since manufacturer is doing execution in plant and they have their own marketing or merchandising team. So at merchandising point of view- many of us have the concept of not finding any effective usage of apparel buying house rather than a forwarding agent or this is many times creating doubling of works.
Rather than simply following up at order execution on top of the vendors, the key objective of these apparel buying house I would say is expanding the apparel sourcing from Bangladesh, representing the market strength from here, strategic advising to vendors for continuous value addition at product and supply chain to compete with other supplying country. Thus, the supply chain of parent retailer company will get strengthen through the apparel buying house or hub offices.
In this article, I would like to present some strategic set of activities for a hub sourcing / buying office at manufacturing country.
As a hub office, believe that it has a clear sourcing vision to be a strong sourcing/buying partner of global retailers.
From that vision, we must define the mission as expanded statement- right product, right quality, on-time shipment, price and lead-time improvement, product value addition, ethical trade. These could be set as KPIs.
Then have to specify strategic course of action across the activities of Merchandising, product/business development, technical/quality assurance, ethical compliance, logistic/commercial.
As a short summary, strategic course of actions should be as-
1. Correct vendor sourcing– to review their business performance profile (keys are the brand, products, quantity, standard of quality they’re keeping, previous track record and the team they have are communicative and own the responsibility). Then to cross cost to evaluate price, cross development to see product strength, quality/technical and ethical compliance audit to see their quality standard).
2. Adaptability analysis of vendor– to place some small order first, then to approach bigger business based on initial performance.
3. Vendor performance rating system should be yearly based on their on-time shipment performance, communication approach/fastness and correct information, quality standard, product range etc. and business placement priority should follow supplier rating basis.
4. Critical path meeting “weekly/twice in a month” within vendor merchandise team and Dhaka office team and “VC meeting with head office buyer and Dhaka office team”. So that any mid order issues are highlighted & get resolved before the outburst on eleventh hour.
5. Trends pack to product translation– mood board, product lifecycle presentation, product presentation. Have to manage and guide product development team on this exercise.
6. Market intelligence: Fashion idea exchange program (at least in quarterly basis)- to get the detail of what BD manufacturer is doing new/innovative through R&D activities and to express in presentation form to head office. At the same way to know the new fashion trends from retail and to present to BD vendor to inspire the product value addition of them.
In summary, we have to present as best of Bangladesh manufacturing strength to retail and to express the best of our brand to vendor.
1. Business reporting tools- formative data reporting to next level within the office organogram and to head office. For example: development tracker, sample hit rate, factory matrix, product matrix, shipment performance, business placement/turn over report etc.
2. Team management– define the team’s responsibility and to analyze workload management so that team can be focused on their own work and responsibility. No doubling of work, no over stress, working with enjoy.
3. Price improvement– competitiveness depends on the like vs like comparison. For example- product vs product, cost factor vs cost factor, current vs last year, vendor vs vendor, country vs country, value addition vs value reduction. And analyzing open cost sheet & doing product engineering analysis.
4. Lead-time– process analysis & removal of draw backs to ensure precise critical path efficiency. Strengthen development works rather after order placement, precise capacity allocation/management, core fabric booking, alternatives analysis etc.
5. Account wise business target setting– based on the account wise business analysis, set the business target (both for quantity and value) for a season/year so that team will be individually responsible for the business target meeting. Have to arrange team/employee of the year award on basis of this.
6. Team building– different professional training/session should be conducted to inspire employees and for their continuous development.
7. Ethical trade– responsible compliance team to audit & ensure all up to dated certification of vendors. To conduct & launch some promotional CSR activities within the vendors.
Above are the summary of how I think of business pathway to get succeed in the context of sourcing/buying office. You may have your own perception/experience to customize the things at more effective way.
Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.