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What is a supplier or vendor?
A supplier is a third party that performs services or functions on behalf of a company. In the apparel industry, suppliers are appointed by the manufacturing factory, buying house or by the buyer.
In this article, we will discuss the types of suppliers in apparel industry as well as vendor in apparel industry. Though the apparel industry is not capable of producing all the required goods (yarns, fabrics, accessories & trims) from in-house manufacturing, Most of the time it prefers outside sourcing to in-house manufacturing.
Supplier selection process
A common procedure of supplier selection process in the apparel industry is given below:
Figure 1: supplier selection process
- Identify suppliers: A supplier selection process in the apparel industry begins with gathering stakeholders’ opinions and defining the selection criteria. This involves getting input from different departments like research and development, purchasing, marketing, and quality control. Once you have a clear understanding of your needs, you can research potential suppliers, evaluate their abilities to meet those needs, and compare their pricing to make an informed decision.
- Measure performance: This is the second task of the supplier selection process. To evaluate the performance of the vendor or supplier, a first audit must be conducted. By auditing the supplier, the manufacturer will be able to determine if there are any significant compliance or quality system failures that may impair the manufacturer’s ability to produce top-quality products.
- Supplier feedback: Furthermore, supplier self-assessments can be used to identify performance gaps and determine how suppliers understand their own operations. Monitoring informative metrics that direct value to the business is also beneficial.
- Certification: As supplier relationships grow stronger, and both parties feel they are receiving positive performances, the supplier may be able to achieve a certified status. It is necessary to maintain a successful performance in order to obtain certification, and a negative compliance outcome from an audit can result in a loss of certification.
Types of Suppliers in the Apparel Industry
There are two types of suppliers in apparel industry. They are
- Nominated supplier
- Non-nominated supplier
1. Nominated Supplier
The nominated suppliers are the suppliers recommended by the buyers of a particular order. To tighten their grip on product quality and consistency, buyers are increasingly recommending specific suppliers. These “nominated suppliers” are chosen for things like buttons, fabrics, boxes, and shipping companies. This practice, once less common, is becoming more popular as buyers seek greater control over their supply chain.
Advantages of nominated supplier
The advantages of the nominated supplier is given below:
Improved Efficiency and Communication: By working with a trusted supplier repeatedly, communication becomes smoother and more efficient. Both parties understand each other’s needs and expectations, leading to faster turnaround times and fewer errors.
Cost Savings (Potential): Nominated suppliers may offer volume discounts for consistent orders. Additionally, the reduced time spent sourcing and negotiating with multiple suppliers can lead to cost savings.
Enhanced Innovation: A strong relationship with a nominated supplier fosters collaboration. They can provide valuable insights and expertise during product development, leading to more innovative and competitive garments.
Reduced Risk of Disruptions: Having reliable suppliers minimizes the risk of delays or quality issues that can occur when sourcing from new vendors every time.
Consistency in Quality and Branding: Nominated suppliers become familiar with your brand’s specific requirements. This consistency ensures your garments maintain a consistent look, feel, and quality across production batches.
Improved Sustainability Practices: Building long-term relationships with suppliers allows for collaboration on sustainable sourcing and production methods.
Buyer Satisfaction & Control: The buyer maintains greater control over the quality of raw materials. By working closely with a nominated supplier, the buyer can establish clear quality standards and conduct regular inspections. This reduces the risk of receiving substandard materials that could impact the final product.
Disadvantages of Nominated Supplier
Along with these advantages, there are certain disadvantages of nominated supplier. Disadvantages of nominated supplier are given below:
Reduced Competition: Nominating suppliers can limit competition, potentially leading to higher prices in the long run. Without the pressure to compete for your business, a nominated supplier may become less motivated to offer the best pricing or innovate their products.
Overconfidence and Quality Issues: Nominated suppliers, secure in their position, may become complacent about quality. Regular monitoring and quality checks are crucial to ensure they maintain high standards.
Potential for Unethical Practices: Limiting competition can create opportunities for unethical behaviour. Bribery and corruption by agents or traders could occur if oversight is weak.
Limited Innovation: Over-reliance on a single supplier might stifle innovation. By not exploring new options, you may miss out on advancements in materials, production methods, or design.
Supplier Dependence: Becoming heavily reliant on a single supplier can be risky. If the supplier experiences production delays, quality issues, or financial difficulties, your business could be significantly impacted.
Market Monopoly: In some cases, nominating a supplier could lead to a situation where they effectively hold a monopoly in providing certain materials or services for your product. This can be particularly detrimental if the supplier raises prices excessively or restricts supply.
2. Non-nominated Supplier:
Most of the time, the buyer sends the technical information sheet of a particular order and he/she will ask the manufacturers to source raw materials, accessories, and other materials to develop their product.
As a result, manufacturers will have access to a variety of vendors/suppliers in their company database as regular suppliers and will select the one that best meets their needs. This type of supplier is called a non-nominated supplier.
Advantages of non-nominated supplier
Lesser Competition: Due to highly competitive markets, the non-nominated supplier works hard and follows instructions given by the buyer or garment manufacturer. Often leading to more have competitive pricing and better deals for the buyer. Non-nominated suppliers may be more aggressive in their pricing to win your business.
Access to Innovation: By exploring non-nominated suppliers, you gain access to a wider range of products and technologies. These suppliers may be at the forefront of innovation, offering new materials, production methods, or design ideas that can give your garments a competitive edge.
Flexibility and Cost Savings: The non-nominated supplier market allows you to source materials based on specific needs. You can find suppliers who excel in quality at competitive prices depending on raw material availability or their technological advancements. This flexibility can lead to significant cost savings.
Discovery of Hidden Gems: The open market offers the opportunity to discover new, high-quality suppliers who may not be as well-known. These “hidden gems” can provide excellent value and become long-term partners.
Disadvantage of non-nominated supplier
The disadvantages of non-nominated suppliers are as follows:
Quality Control Challenges: Relying on non-nominated suppliers can make it more difficult to ensure consistent quality. Without a well-established relationship and clear quality standards, communication gaps can arise, leading to flaws in the raw materials you receive. Extensive quality control measures may be necessary.
Limited Involvement in Development: Non-nominated suppliers may not be as invested in your product development process compared to nominated suppliers. Their lack of familiarity with your brand and vision can limit their ability to provide valuable input and collaborate on innovative solutions.
Social Compliance and Ethics Concerns: Without a long-term relationship and established ethical standards, it can be challenging to ensure non-nominated suppliers adhere to social compliance and ethical business practices. Monitoring their labor practices and environmental impact can be more resource-intensive.
Time Investment: The process of vetting and qualifying new, non-nominated suppliers can be time-consuming. This can delay production schedules and require additional resources for research and evaluation.
Final Thoughts
Finding the right balance between nominated and non-nominated suppliers is crucial. Both have their own advantages and disadvantages. A balanced approach, considering both nominated and non-nominated suppliers, can help optimize your supply chain and ensure you’re getting the best possible value. Make sure the garment buyer is always notified about the supplier and has proper control overl the supply chain. This will give you and your supplier a win-win situation. Consider ethical and sustainable business relationships from both ends.
