Are You Going to Summer Sourcing School?
Or Are You Waiting to Be Struck By Lightning?

  

Consultants Corner News Consulting Manufacturing Clothing

 

 By:  Bruce S. Berton

This article is being written prior to the CAFTA vote in Congress, and I will not speculate on the outcome. However, with the Free Trade Agreements (FTAs) in place as of this date, I will state that the sun does not rise and fall on China manufacturing!

With all of the variables like safeguards, anti-dumping, quotas, protectionist legislative bills, export restrictive tariffs on U.S. products, monetary currency valuations, bi-lateral trade restrictions, political unrest in many nations, and consolidation of large retailers, among many others, you must seek alternative sources for your products.

You must do your homework and determine how you can remain competitively priced and still deliver quality of specifications and on- time delivery.

Step 1:  You should find out which countries have the raw materials (or can easily obtain the necessary materials) to build your product.

Step 2:  You must find out if the FTAs are applicable and/or which restrictions might be major problems.

Step 3:  You must understand and have all of the applicable FTA rules and regulations.  Do not assume that one agreement for one region is applicable to another.

Step 4:  You must profile the factories and the agents with the due diligence of a criminal investigator. This is not done over the lavish dinners you will be invited to; these dinners are how they check you out! On-site complete profiling is required, as well as checking references.

Step 5:  Your professional instincts, after you gather the facts, will most likely be the main factor for the
Yes or No
decision!

Step 6: Do not try to make a 'silk purse out of a sow's ear enough said!

Step 7: Make sure your infrastructure is professional and understands not only the manufacturing, quality control, work in process, logistical and documentation processes, but also the cultural differences and cultural communications required when dealing in different countries.  We joke about the language of the GARMENTO, and this is somewhat a truism, but good communication is an art and must be translated into mutual understanding. Remember the old game of telephone and how the message had changed totally by the time it reached the last person!

For sourcing, look at Sri Lanka, Mexico, Central America and Dominican Republic, Chile, India, Thailand, Bangladesh, African, AGOA countries, the Jordan Free Trade Zone, Turkey and others.

It is not an easy process, and we all want to continue with the vendors we have trained to deliver our product. However, there is nothing so permanent as change, and with the WTO in a non-cooperative working mode, even having trouble holding a meeting, we must source continually, and teach and train constantly. Like the soap opera As the World Turns, sourcing continues to change daily.

In addition to merchandising, design, sales and marketing, you must put the time, effort and monies into the back end, production and finance, in order to satisfy the needs of your customers.

You must do your summer homework now, and make plans that are flexible and can change according to the many variables.  I am getting stories and calls daily.  My broker tells me I have to pay duty on supposedly non-dutiable items.
I need a visa.
 
My accountant tells me I am entitled to a drawback, but he does not know how to obtain it. The lowest price from your professionals is not always the best value.  Understanding the risk factors and having the knowledge to evaluate potential problems are the qualities you need in these changing times.

So, do not let lightning strike you and cost you relationships and lost profits, by thinking that the lowest price is the only thing you should consider. We at Stonefield Josephson have over 100 years of experience in the textile and apparel industries.  We are not the lowest priced, but we are the best.


Bruce S. Berton is a business and management consultant with Stonefield Josephson, Inc., a leading regional consulting and accounting firm with offices in Santa Monica, San Francisco, Walnut Creek and Mexico City. The information in this column is of a general nature.  Readers inquiries are welcome; and may be sent to Bruce Berton, at Stonefield Josephson, Inc., 2049 Century Park East Suite 400 Los Angeles, California 90067 310-432-7437 Direct
866-225-4511 Toll Free
310-432-7519 Fax Los Angeles
Orange County
San Francisco
East Bay Silicon Valley
Hong Kong, or send an e-mail to: 
[email protected]

 

 
   
 

 

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