Rating and selection of suppliers (potential suppliers)

A very important part for all decisions regarding your supply- partners is the rating of your existing or potential suppliers

Important informations for us have been

grade of verticality (spinning – weaving – garment production – laundry)
capacity of the supplier
our share of his capacity (how important are our orders)
ability to produce smaller volumes
his other clients (from your continent?)
his suppliers
communication skills
r&d ?
creativity
compliance
past experiences
strenght – weakness – options – threats (SWOT analysis)
% of sales at regular price
% of sales at reduced price
aso…..

Visit all countries and visit your suppliers – what you see is what you get. If you just read the profiles, there are just very good factories and all of them are somewhere leaders and experts.

With the results of your „desktop- investigations“ you visit the factory and the offices of your suppliers and potential suppliers. You should collect all informations which are important for You and the company, you are working for. Most important are always communication skills – if you and your supplier don’t understand each other any business will be difficult.

Ask for all the information on the company – which you have found – to make sure your informations are updated.

Would you like to work in this company? Is there a certain level of confidence? Do you feel fine?
What could happen if there would be fire? Is child care on the 5th floor safe for mums and kids?
Or is everything too perfect? Did somebody „warn“ the departments before you visited them? Is the presentation of the factory more a show or real?

Please understand: our orders have been 30K+ per item and the annual volume was superior to 12 Mio jeans. This makes all discussions relatively easy and we had to select suppliers which have been able to produce these volumes easily. But there are as well „normal“ retailers or brands who order smaller volumes.

I will describe the three types of suppliers

– completely vertical setups – weaving (eventually including spinning) – garment production (including laundry)
– vertical setups – garment production with laundry
– simple garment producer – medium and smaller sized units

general characteristics: the more vertical – the more big players will be working with this supplier. That means this supplier will be better informed, will run his own R&D department, there will be permanent production of well selling fabrics. In a completely vertical setup it will be easy to discuss prices. But: more vertical means as well that the supplier will need bigger order volumes.
Vertical setups can be huge or tiny this is the most interesting type of supplier which can match to every type of retailer or brand. The big ones will have their own fabric sourcing, a R&D dept. and most possibly there will be big players with their customers. You might get similar advantages like with a completely vertical setup but don’t forget the fabric supplier must earn money too, which is not the case in a completely vertical setup. If your orders are small, try to find a small vertical supplier. With a small one, you risk, that the guys in the laundry don’t really understand european or american needs, that they don’t understand the differences between our markets, that they use chemicals which soon will be prohibited to use … all this might happen, but must not be necessarily the case. Be careful with owners who are just talking too loud, guys who know everything – just remember: „… when you talk, you can’t listen – if you listen, you might understand.“ With a smaller setup you have as well the chance to get very good ambitious collaborators who will do everything for you and your orders. It will be a question of understanding. If the potential supplier is open to learn and you respect, that you have to learn as well – there will be a healthy basis for your future. Simple garment producers ? … try to avoid if possible. There will be discussions in case of problems. Who was responsible for what? Did the mill create the issue or the laundry? Who tested what? How? ….

Big setups don’t work with agents, buying houses, vendors – they don’t need this kind of service. Thats why buying houses, agents asa are working in general with factories (with or without laundry) who don’t have a R&D dept. and who are not traveling.

If you need to – or can – give just smaller orders, you need to compromise. There are all around the world smaller setups who do a very professional job. Talk to people who know the country, who know some factories, talk to colleagues, … to be informed is the best vault you can get.

Now you have to decide. What will be the best solution for you and for the company who is paying your salary?

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