We are doing this by forecasting Unit and fabric usage on a 12 month rolling forecast basis which can be increased or decreased dependant on the sales forecast. If we start to forecast usage, the supplier can buy fabric and colour up in advance giving us the ability to react to sales opportunities as they arise. Having the ability to draw on fabric stock takes at least 6 -8 weeks out of the manufacturing process.
Challenges faced when sourcing / resourcing:
Stability of supply – replenishment capabilities Finding socially compliant factories Fluctuations in exchange rates Inflation and rising labour costs in China Large MOQS Manufacturing and Fabric
Order Volumes dictate pricing One important thing to note is that order quantity will affect pricing: order a higher volume and receive a discounted rate; order a smaller volume and pay more per piece.
This is one way suppliers incentivise buyers to order larger quantities. Keep in mind that this needs to be a mutually beneficial transaction.
Lower MOQS incur surcharges ranging from 15% to 100% dependant on quantity required. These surcharges impact our GP% considerably when done on a regular basis. Hence the need for regular forecasting to improve our cost to serve.
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