The year 2020 has shaken many business concepts, and the paradigm shift has happened in sourcing strategies also. Moving towards a demand-centric future, now sourcing is much more than the perfect combination of suppliers, compliance, operational excellence, product development, cost efficiency, sustainability, CSR and shared vision, etc.
Things have moved and new aspects have emerged. Agility and flexibility are very much required and are more relevant now than ever before and one has to work immediately on the required changes or adapt to new ways, whatever these are.
It’s time to for Indian exporters to think for themselves and to represent as strategic partners or preferred suppliers, and not just suppliers who are purely transactional. It is very much clear to all that it is about surviving today and thriving later, so suppliers have to be preferred suppliers. Stalwarts of Indian sourcing domain shared their insights for Indian exporters at a panel discussion during the 2-day conference forum at the Apparel Sourcing Week (ASW) Marketplace recently.
Nobody knows when the next lockdown is happening and whether stores will open in a full-fledged way or not; therefore there is very little necessity left to keep inventory like earlier. So to remain as a preferred supplier, one has to continue to adopt the changes. Using all above-mentioned specialities, exporters should be able to produce different products, cater to smaller SKUs, MOQs as well as big orders whenever and however required by buyers.
Alpana Razdan, Country Manager (India and Bangladesh), Falabella said, “Now there is less requirement for a specialist or niche kind of supplier. Suppliers have to be excessively customer-focused; look at Amazon in this regard – how excessively it is customer-focused. That’s the kind of business model suppliers have to follow. One has to be very much customer-centric by all the way.”
She further added that the costs are shifted to the supply side, so buyers are looking for somebody who doesn’t have a fund flow problem or a supplier who can safeguard the business or a supplier who is agile and very flexible.
It is pertinent to mention here that Falabella did not cancel any orders in the recent Covid time. It has developed a system of e-bidding wherein everything goes live. So, the whole process and system of negotiation is changed. Now suppliers know what is the first price, what they have to do, how they will get the business… Business models like Amazon are also more relevant as e-commerce is now the biggest growth area and that by nature brings smaller quantities.
Venky Nagan, Group CEO, Asmara highlighted the international scenario and interesting aspects of commercial and technics also. He said, “Buyers are looking for nearshoring opportunities and Turkey has done very well, while Bulgaria is being scouted actively. Business is moving from China to India but Indian suppliers have to be careful while selecting the client. China is down but not out. China is investing in many countries so there will be indirect competition for India in future.”
As per him every supplier has to face commercial and technical acumen. On the commercial front, suppliers are being asked for even more extended payment terms; they have to be ready with fabric but if buyers ask, hold it also. So, there may be financial capital-related challenges and suppliers have to be ready with a solution for the same. From a technical point of view, exporters have to be ready with latest technology as 3D for designing, for collections, for prototypes, for fitting.
Mridula Lall, Global Sourcing Manager, Indiska insisted that flexibility is even more important than price competitiveness unlike before lockdown. She shared that service is now the most important aspect and that is possible by adopting all best resources and being completely honest, supportive.
Catering to Scandinavian countries, Indiska sources 70 per cent from India out of its total sourcing. During the lockdown, the company didn’t cancel orders and reworked its stock level, replanned entire future assortment to see where it could fit in.
Sanjay Thakur, Sourcing Director, Ethical Sourcing, emphasised that as per various surveys in the US, customers are now more concerned towards sustainability, so exporters have to be sustainable and increase their thrust in this direction. “Buyers are looking for suppliers who are agile, open to grab new opportunities, totally transparent in sustainability. As Indian suppliers showed promptness for PPE, they should grab opportunities for all other such products. At the same time brands are also willing to invest in their preferred suppliers,” he said.
It is also the need of the hour that the entire supply chain should follow this concept religiously. As overseas buyers are choosing their preferred suppliers, exporters should also select their preferred suppliers of raw material and other services.
Anika Passi, Global Sourcing Expert believes that with the strong relationship between buyers and exporters, there are enough chances that rather than working on fabric nomination, brands can have full faith on the exporters about proper fabric sourcing as well as product development (PD). “Even on PD at the fabric level, exporters should remain ready with all expected choices, whatever buyers can ask. And all this is possible by following the trend closely,” she emphasised.
One may find all these initiatives/efforts difficult, especially the small exporters who are working in a set routine and are not very keen to adapt to new ways. But all this has to be followed because the terms of the business have changed exceptionally. Many suppliers have changed and evolved with time. As she said, “This is the new normal. There’s been a big mindset shift in the suppliers as well as the buyers.”
It was interesting to hear from experts that Indian exporters as well as few of the fabric companies are offering competitive prices comparable to China. So, if Indian exporters follow all-above mentioned aspects, there are enough chances to grab more business, especially from the China’s share. Unlike earlier, now overall scenario is not in favour of China.
Overall, the panel was happy with the responsiveness of the Indian suppliers who have made efforts to comply and adjust to the requirements of the market. They unanimously agreed that a lot is still to be done, but the direction and intent has been definitely positive. The majority of Indian exporters are SME and it is the best chance for them to grab the opportunities by putting in their extra efforts; smaller firms can easily be more flexible all the way. Going forward, they have to work on sustainability and CSR also. This is the time to cash in on being preferred. India is well placed and there should be just focus on whatever is required.
Apparel Sourcing Week (ASW) Marketplace will keep updating you with new directions in the apparel trade, be it sourcing, trends, technology or other aspects. Keep following apparelresources.com for every update.