Factories are Preferred

One’s choice is further limited to factories, which are in an EPZ or EOU and can import cheap twill from China. Therefore at the end you have probably only a couple of factories left to choose from. And of these, if only one is compliant to ShopKo Stores requirements, it leaves you finally with only one factory you could work with the above example is to illustrate that there is not exactly a choice set of factories to short list and choose from. A factory may be disorganized. Poor in follow up and expensive, and you would not place an order with them normally. But in a case like above you would have no choice but to do the same.

Price is another such constraining factor when we bid for programs of a few thousand dozen garments from stores like JC Penney. Wal-mart, Sams Club. Price Costco or shopko (vide importers) it is just a price game. If the programme relates to say a poly/nylon/spandex fabric which entails, around 28% import duty or a rayon crayon printed one which entails the same: we would look for sourcing in Kenya or Madagascar which is duty-free for export to US. If it is a T/C Plaid shirt program, we would look for Bangladesh using Chinese or Kenyan fabric: but Bangladesh with duty may still be cheaper. If the program is of cotton shorts for Marmaxx we would again not even think of India or Bangladesh with their prohibitive quota prices: we would look straight to Kenya or Vietnam. Hence the current scenario calls for keen eye on landed pricing, not just f.o.b. We have to mentally add f.o.b. and duty and freight and then offers received from different sources are compared. The Competition cannot beat Kenya or Madagascar for the US and Bangladesh or Nepal for Canada because of duty-free status.

Product ability is of course what determines the choice matrix. If we are looking for dresses. Pants or blazers or polyamide briefs, there would only be 2-3factories in India having this capacity.
Let us take a product category like ladies woven blouses or men’s knit golf shirts where you can indeed exercise choice from a set of factories. What are the factors that would determine my company’s decision in placing an order? I would list them as follows.

Assuming pricing and compliance are in place we look for factories, which represent the “least correspondence factor”. This basically represents the factories, which book the order, and next we know they ship it on time. There is no correspondence from them on fit issues, fabric problems, quality issues, extension and so on. They are competent people who know how to get fits right in the first place, how to get correct fabric, how to follow procedures of lab testing bulk and pre production approvals on time. They do not have any major quality and delivery problems and do not bombard you with messages clarifying various things or outlining problems. These are factories with whom you can “place it and forget it”. Basically, this fits in with what customers look for these days--- least number of emails. Unlike the past, customer nowadays do not want copious updates or any outlining of problems. They do not want to hear of any problem nor to think of any solutions. They just want approval procedures to be followed and quality goods to be shipped on time. They no longer want to work as partners being apprised of daily status and problems. Correspondingly these are factories that we look for, with whom we do not have to follow up daily and have the confidence of knowing that they would ship on time with all approval procedures in place.

This is a crucial factor in determining choice of factory. Assuming we have to choose from a group of compliant factories within the ball park price range and qualifying to “least correspondence status” we would place the program under bidding with one who feds us consistently with updated developments. This goes beyond quick and good sampling as per buyer’s specific requirements (as we assume any good factory can do this). It entails a factory being on forefront on good developments and constantly submitting us. without being asked updated fabrics and garments which helps us in booking business. Keep in mind that there are many factories who keep submitting zealously, but have no clue of what is in vogue and hence all submissions are futile. We would not consider such factories in placement decision. Also no buyer pays for development (except when it is a sampling PO); hence factories, which crib on same or insist on charging are quietly dropped.

A factory offering 60 days delivery including all approvals would obviously score over one offering 90 days lead time.

This is an increasingly important factor in considering placement. Factories are nowadays accepting 30 or 60 days garment L/C (as against L/C at sight which has been mandatory requirement) or accepting shipping on D/A or D/P without any L/C at all.

Some are even offering LDP (Landed Duty Paid) in the US. People with flexible terms as above obviously gain. We would not work with factories, which still need 60-90 days L/C before shipping and do not start bulk without L/C as no customer now would open L/C so much in advance. Gone are the days when a factory could ask for garment 90 days L/C before delivery to open back to back fabric L/C. say in imported fabric. A buyer now would rather not work on such terms.

Among the factors determining “Choice of factories” by Textiles Network Limited I have  not mentioned quality even once. This is because nowadays it is a given factor, not a determining one. We would visit factories when they approach us and evaluate their pattern making, sewing, finishing abilities and control systems and check their other customers merchandise, Only when they pass basic quality norms, would they be a part of the matrix of factories we would work with. Of course there are factories which offer an excellent product versus a good one: which would affect our decision depending on customer and product profile. But by and large, the finished products of factories would be almost the same: and hence quality is not a determining factor.

The reality today is that customers want compliant + quality factories at lowest landed prices with fastest turnaround and least headaches. They are not interested in status reports (which can lead to pointing out by them that we did highlight, say a fabric delay) or in hearing about problems or in solving them. They have little idea nowadays of what they should buy, hence they look to us for color style and fabric trends. Moreover they increasingly lack technical skills and look to us to generate graded specs or even to do basic fits. They want least financial exposure and wish to move away from the L/C business.

These are the factors we look for while choosing factories.