Distribution Practices for the Textile Industry

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Executive Summary

In this paper the main focus is to understand the distribution strategy of textile and garments industry and analyze the benefits of choosing different distributions channels over the others. First we analyze the channels selection importance and advantages and then we comment on the selection of these channels among different countries. Like developed countries have the different infrastructures and have the different pros and cons while on the other hand these all conditions and situation would be change for the developing and under developed countries. In this paper the discussion covers the following,

Global supply chain: This is a network of all the textile and garments factories as well as all the material sourcing companies on the basis of worldwide.

Supply chain management: It involves the each and every effort that could be made and it involved the delivering and producing of final consumer product. The chain consists from the supplier’s supplier to the final customer’s customer.

Sourcing: This is one of the important factors in the process that determines where and how the goods being manufactured and goods being will be obtained.

Introduction

In a country the textile industry is one of the basic tool o develop its economy and in the developing countries the textile industry let the country to enter and run on the road of industrialization. One of the major feature of that industry is it requires relatively low amount of capital to invest and less technology and on the hand it provides tremendous results for the growth and the development of a country’s economy. This industry offers relatively high wages and also helps in creating favorable manufacturing conditions. The industry creates highly exportation garments and the textile products for the country as well and this situation will increase the development opportunities as well as boost the economy and led its path towards continuous growth and development.

In the year of 2006 month January 01 the World Trade Organization ends the textile system worldwide and it also apparel the quotas, this act help and created the leap for the garments and for the textile industry in almost all Asian countries around the world. In these quotas the countries are Vietnam and Pakistan on the other side of the picture the textile industry and garments industry in South Africa, Eastern Europe and the Caribbean are so high so for that reason the overall trend shifts to the Asians. In Asia there are relatively low cost of products and very cheap labor cost was there and the other direct and indirect labor costs were also very low and the quality of garments and textile products are very good.

In the end of the 1980 all the footwear and the clothing industry produced the standardized styles and they did not ever change from one particular season to the other season. All the materials and the final goods are to be took place for the end consumer although the United States of America and the multiple European countries have flourished the TCLF industries as well. At that time the business was supply driven and all the production cycles were predictable on the other hand the supplier was basically stable and relatively regional. At that time all the seasonal collections were distributed in to four categories and these are spring, winter, summer and autumn.

In this paper we will also describes the global chains management in the garments and textile industry and also examine the most quality tools that are being used by this industry. We will also examine the efficiencies that are being gained with the help of distribution channels and especially focused on the role of channels and intermediaries as well. In the garments and textile industry making the decisions related to the distribution channels in domestic or in international markets is very difficult and complicated. While doing the comparison then we came to know that these decisions are become more difficult when international markets are involved because international markets are relatively much diversified and complicated.

When a country wants to select the channels for the industry then these channels are to be multiplied by as many countries as it wish to serve. All the companies that wish to expand their garments and textile business globally are bound to find their own way of distribution by going through the maze of multiple channels and through this these companies became successful in each of the selected market. One of the most challenge that the companies faces are selecting right channel for the right country because we can not adopt same distribution techniques in all countries in the same manners. For all the developing counties it is very hard to choose right distribution channel for the best practices because there are less options available in those countries and channels are not fully developed.

In present days the marketing environment is very much close to the customers and we can say that is much final consumer oriented. This system also focuses on the problem solving to their problems and vital about bringing quick success for the related company as well. Function of selecting the distribution channel is become more important when the marketers are not in the position to control and efficiently operates the all the distributions functions and it also important for the reason that it deeply affects the long term strategy of the companies. Once the correct and efficient distribution channels is established and operated correctly then it would not easy task for the companies to change it. In the market of exports the additionally task is to choose and to control the correct distribution channel and this channel must complete all the related tasks by itself.

For that reason the companies become more careful in the procedure of information collection and for the adoption of relevant cost. The other side of the companies is those which are not very frequent in the export trade and those companies have to rely on the intermediaries almost in every perspective of exportation. These companies have to rely on the intermediaries for exporting their products to the desired market place and in that case the system for optimal distribution must be flexible and also these systems must be adjustable to the prevailing market situations. These market situations may be short term or may be long term as well.

All those textile and garments related companies which are involved in frequent export trades have faced relatively less problems and enjoy the cost benefits over the distribution channels selections and these companies are not bound to rely on the heavily on the intermediaries in the distribution channel markets. These companies also enjoy the cost benefits over the other small infrequent export trading companies.

All the developed countries that are dealing in garments or textile industry are gaining more profits then the developing or under developed countries and this is because of the fact that all the developed countries are independent in most of the distribution channels and they did not have the need to rely on others country technology as well. In other words we can say that these companies are enjoying the benefits like technological advancements and a comprehensive infrastructure of selected distribution channels. These are some of the benefits that these countries enjoy over the other developing and under developed countries.

Discussion

In the industry of textile and garments there are mainly two types of basis that become the strong reason of this industries success. One is the selection of distribution practices and the other is selection of intermediaries. The intermediary is one of the integral parts of the distribution channel and it connects the buyers to the producers in other words we can say that it builds strong relationship among the producers of the products with the final consumers.

In the period of 1990 the TCLF all retailers started to expand their all products available ranges and they were became more indulge in fashionable and innovative designs. This trend expands and then the fashionable products were started to divert to the distinct brands. This formula becomes the key success of these industries because now the lower production cost mover towards high and successive profitable formula. When this trend sets in market and the companies are receiving positive results form the consumers sides then strong competition had push the retailers in order to consolidate and it enhanced the all buying companies in the negotiating power. All the clothing and textile brands were tends to move towards production offshore and outsource manufacturing firms began to search for low cost of labor and material.

This trend become productive for the production opportunities and the prevailing competition between all the brands and the retailer became harder and tough to maintain. As compared to the previous years the per annum collections has significantly increased as compared to the past 25 years and some of the fashionable brands were offering more than 20 collection in one year. This trend shifts the flexible and faster production on the other hand the lower prices were being accelerated in the industry of textile and clothing by the implementing phase out of Multi-fiber Arrangement that could also be called as MFA in the year of 2005. The system that governed trade since 1974 is the quota system and it exposed the textile and garments industry around the world competition and it also generates the great rival, foreign investment and employment opportunities among all the production countries. The clothing industry specifically directly impacted with the low dramatic changes in production of textile products and it has less prone to the quick shifts in the production of textiles and garments locations.

Recently all the Chinese textile industry involves in the scenario and it provides all garments products in multiple ranges with multiple prices as well so now the trend is switching towards Chinese industry which became big threat to the garments and textile industry of Pakistan and Vietnam. The products of these two countries are also very economical and quality wise good. In the year of 2009 there was near about 52% Eastern Europe garments imports and it provided from only the developing countries and with the help of comprehensive analysis we have found that there are 28% of the total markets garments and textile share that the China captured and with this percentage it becomes the market leader. On the other hand 24% share is for the other countries and these countries involve almost all developing textile industry countries as well.

The reason if we analyzed for the low share in the overall market for the other countries then we found the below mentioned reasons of this and these are,

Production inefficiency

Financing inefficiencies

Poor infrastructure

inefficient power supply

Lack of modern technology

Managerial problems

  1. Poor logistics management

  2. Less marketing focused policies

  3. Less innovations

On the other hand those companies which deal in export trading needs those intermediaries that involves in export trading and that intermediary connects the foreign buyers to the domestic manufactures. Intermediaries are those specialists that perform the export functions and perform the functions of several manufacturers in the non competitive lines.

These intermediaries also called traders and they are indulge in 15 different services group and the firms are connecting the local manufacturer also the foreign buyers exports the intermediary firms. We sometimes mistakenly perceived intermediaries as temporary vehicles in the market and not considered them as the important market partners. These intermediaries are very important because they all putting efforts to boost the buying and selling trends with planned strategy with implemented tools.

They are to be considered as de factor arms of marketing and of the producers. All the intermediaries are helpful in connecting buyers and sellers and provide assistance in goods physical movements. These people are also helpful for the transaction title flows and also help in communication and information flows.

A manufacturer should coordinate with the advertising campaign in order to communicate with the intermediaries and then they provide information to the manufacturer and to the customers as well. Intermediaries are proved to be helpful for the multiple reasons and some of the reasons are to be mentioned below,

  1. Language separation

  2. Cultural separation

  3. Geographical barriers

  4. Trends of the specific country or regions

  5. Target customers likes and dislikes

  6. Countries trade and dealing laws differences

  7. Economical changes

  8. Currency ups and downs

  9. Seasonal trends

  10. To know target market well

There are number of intermediaries types and one of them are those that purchase products from the manufacturer and they also organized product line and also provides all marketing services. These are the persons who working independently more than the agents but agents are not those persons who purchases products from the manufacturers but these agents work for the commission. Agents enjoy comparatively less freedom than the distributors. Companies also enjoy the benefits of using agents by controlling the price and gaining the appropriate products versions. Textile and garments companies needed intermediaries when the marketers are decided to enter in the international markets and they wanted to enter in foreign exports directly or indirectly.

In the direct export all the marketers sell the products directly to the foreign customers or in other situation use the local representatives for this particular purpose. All the distributors who deal directly can also be called as dealers or they may be called import jobbers or retailers. In this situation the direct agents are to be called as representative’s manufacturers, purchasing agents or may be called as managing agents. When the marketers find the domestic firms then they export directly and those firms that acts as an intermediary for manufacturer and all the intermediaries’ takes over the international side of relevant channels.

While considering the short tem period the indirect export is much cheaper and faster and usually is to be used at the early stages of the company’s exporting process. All the textile firms integrated with exporting techniques sets up the best distribution channels and open their own sales offices at the particular places. These companies have the hub distribution structure and assembly operations departments in all those foreign countries where the company deals with. In this way the companies would be able to take control of all the relevant marketing channels.

All the exporting strategies that needs to be implement in the garments and textile industry and it requires the high investment and research and development then the other, this strategy usually used by the those companies that are committed to market and also have the purpose to expand the business globally in foreign markets. All the services of the intermediaries was agreed with the two main factors of all the outcome production and reducing the costs and receives the quick response.

In the end game strategy the reduction in cost is not necessary and the intermediates provide all relevant services from the business to business. Services of B2B are now expanding day by day and the companies using these services are also like the outcomes of their different operations to the other companies and those companies are outsourcers their multiple functions and they want to invest and to focus one of the particular capability.

In multiple ways the B2B business techniques take place and now one of the major sources is the internet facility that enhances the B2B services. There are multiple firms that provides this business service as well people also use help of many famous websites to promote B2B some of the famous sites names are to be mentioned as below,

  1. www.alibaba.com

  2. www.amazon.com

  3. www.kamu.com

  4. www.ecplaza.com and many ore

Some of the companies are those who deal in their own personal contacts to reach buyers or sellers and they are independent to make their own business arrangements and gain lump sum share from the particular business dealings. All the different channels and the intermediaries chosen by the companies are of the purpose to promote the business activity as a whole and to expand the business more quickly and efficiently. These can be called the tools or techniques to promote the business activity and to expand the business on international platform.

All the foreign exports intermediaries are performing multiple services for the buyers and manufacturers and recently they are enhancing their services as well to create a big platform and details of the some of those are to be mentioned below as,

  1. Product research

  2. Research of international markets

  3. Solutions for market plans

  4. Customer relationships solutions

  5. Documentations of exports

  6. Solutions for taxation

  7. Ware housing techniques

  8. To provides help in the process of negotiation

  9. Help in the process of communicating with buyers

  10. Help in the process of communicating with sellers

  11. Services of freight forwarding

  12. Packaging

  13. Provides financial solutions

  14. Development

  15. Training

  16. Helpful in finding the good distributors

  17. Helpful in providing after sales services

  18. Consistence quality maintenance

  19. Developed marketing skills

Why choosing the intermediary: In according to the opinion of Peng M. during the 1998 there could be 5 major reasons that needs to be considered while choosing the intermediary and these factors are mainly based on the cost perspective. This cost perspective strategy is related to the strategic management of the companies. While making the analysis we came to know that more the distant and more the unfamiliar markets are there, there are more chances that all export intermediaries will all be selected by the relevant manufacturers. The choice o manufacturing export channels is basically driven by all the consideration of cost transactions. In which the company have the 3 major alternatives and these alternatives are mentioned as below, 

  1. Direct exporting

  2. Indirect exporting

  3. Integrated exporting

This is the reason that why the manufacturers chooses the intermediary and it can be lower the exports transactions cost and this is the cost that includes search and the negotiations cost as well. This cost also monitors and enforces the exports contracts. The second reason is that higher the commodities entered in the market there are more chances that manufacturers selected the intermediaries to promote and expand the business activities.

Good distribution practices

It is very important for the textile industry to maintain the utmost quality at the time of distribution and is very important factor for that industry survival. The good GDP is the dedication towards the distributive practices and to maintain the quality of goods in every aspects of that particular product services that it promises to pay. GDP also may called as quality systems for the distribution and the warehouse and it regulate to stipulate all the distributors and all the relevant products must be align in the operations with all standards. This particular scheme ensures the management of consistent quality and place it throughout the overall supply chain.

This function has been done from the early delivery of the raw materials to the plants where the textiles have been manufactured. This chain has been ended to the shipments of finished goods to the final consumers. Against the international GDP requirements the independent assessment compliance requires the effective ways in order to established system of quality management and these systems align with all the GDP guidance. In textile industry the SGS is also a globally recognized leader in the certifications process and on the second number there is GDP process certifications. All the highly qualified auditors are able to analyze the industry’s process and the policies along with all the partners of supply chain management for the purpose to ensure the consistent delivery with good quality products. Certification of the valid GDP by SGSs demonstrators the organization is committed towards the quality in the every aspect of services. This service is relevant to that what the product is going to offer.

Supply chain Management in Garments and textile industry

The chain management of supply deals with relevant stake holders from the production and to the final consumers. It includes all the supporting activities for example retailers, government agencies, logistics, distributors, suppliers, firms, production units, and R and D firms etc. All the relevant

Stake holders are dependent on each other and all the company has the technique to manage stake holders with this the whole chain would be in trouble.

This chain also deals with the suppliers and with the distributors and that relationship is the cause of competitive advantage of multiple companies around the globe. Now we explain the concept of SCM and it is the group of approaches that are being used to efficiently integrate warehouses, suppliers, stores, manufacturers and merchandise dealers and it distributed at the very right quantities to the very right locations.

This function is to be performed in the right order for minimizing the system wide costs while on the other hand it provides satisfied services level to the proposed requirements.

Supply is not only the function to maintain the whole chain only but it also if the things are to e happened in the right way and they trying to cut all the relevant costs and also making the process to be more efficient. There are mainly 8 components that are the part of supply chain management and these are to be mentioned as below, 

  1. Strategic fit

  2. Competitive strategy

  3. Sale strategy

  4. Marketing strategy

  5. Chain supply strategy

  6. Customer oriented strategy

  7. Product development strategy

  8. Strategy sourcing

There is some of the strategic circle that present around the management of supply chain whole process. The competitive strategy enables the supply chain management to build the model that mainly suits the consumers and provides the clear advantages in order to buy the relevant products from the company. Strategy for the development of the new product mainly deals with the infrastructure of the new product and infrastructure of the supply chain management.

The strategy clearly specifies that how would the market must be segmented and for what kind of product and at what price level and in the end how that new particular product should be promoted in the market to capture the right market target area. This particular strategy also specifies that how the market should be segmented and for what should be its price and how it should be marketed to place the product at right place for right price. In this regard the strategy of Dell is very helpful in order to build the production that has become successful in order to minimize the inventory and bring the new products quickly in the market. The strategy of supply chain deals particularly with the sales and by purchasing raw material and the transportations of the suppliers in the supplies out.

The meanings of strategic fit are to build both the competitive and the SC strategies and those have the same and common goal. Here we have mainly three types of basic steps that have been taken for the purpose of achieving the strategic fits and these are to be mentioned as below,

  1. Understanding of customers

  2. Understanding of SC

  3. Strategic fits achieving

The strategy of fright management completely deals with the freight and it also deals with the cost cuts in the transportation of freights. The strategic sourcing is relatively low for the purpose of findings the low costs to the suppliers and become more about the aligning and the strategy of customer focusing also deals with the especially customers and in the business of e commerce.

Data collection procedure

According to the opinion of Yen in the year 2003 he said that there are 6 different methods of data collection for the purpose of doing research for the industry that which channel, method or technique is best suited to execute the business properly and achieve the targeted goals in less time with more benefits. These six methods are to be mentioned as below.

  1. Archival goals

  2. Interviews

  3. Documentation

  4. Direct observation

  5. Physical artifacts

  6. Participant observation

When the textile industry wants to gather the information for the purpose of making good decision about the industry and for the business then one the main strength is that opportunity to use multiple sources of the evidence. Multiple source use means the researcher has the same opportunity in order to obtain number of measures about the same phenomenon. That particular phenomenon adds the validity to the specific case study. The findings that the company gets after making particular research will help the company or industry to correct its short term and long term decisions accordingly. With the help of it the company would be able to correct its past mistakes and to correct its future strategies accordingly.

All the distribution practices that adopts by the company is supported by these researches and findings for example if a company implemented a practice that is not so good for the growth and development of particular textile company then with the help of doing that research the company would be able to locate those loopholes that become the reason of not achieving right goals at right time.

This research become very much helpful in making right decision at right time and in accordance with the situation, This method of research is to be implemented in domestic and foreign trade as well and proved to be very helpful for the industrialists to make right decisions at right time and also proved to be helpful for the management of company to oversight the relevant issues and suggest relevant solutions in time for the purpose of avoiding any particular problem in future.

Conclusion and Recommendations

The industries of TCLF have rapidly experienced growth and development and it also increases the attention of public towards them recently. This paper suggested the opinion that in the line with the ILO standards of the wages and of the working hours and all the guidance must be provided on the pattern that how respects for all these sustainable buildings enterprises. It also pays stress on improvement on global textile trade and defining and discovering the more reliable and economical distribution channels. One of the major purposes of the global forum of trade dialogues is to decide about the wages about the working hours and leather clothing for the benefits of the particular government.

In this dialogue the countries plays a participatory role in discussing workers and employers rights and also decides about the ways in order to address wages hours in all the relevant TCLF industries that taking place in to the national contexts and in the relevant international labor standards. In these discussions the points of the consensus are to be expected to adopt by meeting guide future action and by the ILO by its members. These dialogues are very important and leave deep impacts and these can also produces sustainable changes and these also promote the productive and decent work environment. Industries of TCLF transformed profoundly in the last few decades in this the dialogues performed socially also plays the important and the vital role in order to address the accelerating globalization and helps in shifting the patterns of employment.

It also increased the insecurity and all ongoing pressures relevant to financing. In order to improve the working conditions among employees and labor it is also important to execute genuine and full consultation among all the employers and with all the workers organizations. One of the best social cohesion guarantees is the minimum wages rates that results in the consultation with all the social partners. There are mainly 7 dialogues that require the environment to promote the freedom for the association and it also has the right for the collective bargaining for the strong assistance and it has the independent and capable social partners. In order to enhance the collective and constructive engagement between partners globally and locally it is important for the workers to devote themselves for the work they performed.

One of the main purposes of wages implementation that the working time legislation lies with the governments and it ensures he national law compliance and it also requires the labor administration for the inspection systems. This system also provides effective and the efficient methods of governance and it can also established broad partnerships. There are 64 strengthening workplace that compliance through the labor inspection and it is one of the ILO 8 areas in all the critical importance in the recent era.

All the systems related to the inspection of labor and the administration operates rapidly in the drastically changing environment. This environment is well exemplified by TCLF industries and it occurs the dramatic changes in all patterns of production. All the working organization, relationships and employment structures, the labor migration and the outsourcing indulge in all textile industry distribution practices. In the year of 2011 the ILC resolution is concerning the labor administration and all the labor inspection calls for the sound labor and it also expands the coverage of all workers in increasingly and in the diverse workplace globally. When includes the all workers supply chains the process of exports zones become more fast and developed. The supplements resolutions related to the ILO conventions and the recommendations provide important guidance for the administration of labor and for the operations inspection.

 

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Posted by: Muhammad Arif. in General | Date: 15/01/2019

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