Retail Case Study

(Definition) FABRIK – Seeks to understand, control and reduce costs within the upstream of retail supply chains.

(Definition) FABRIK – Seeks to understand, control and reduce costs within the upstream of retail supply chains.

Fendale has extensive experience and expertise within the global logistics arena. Our exclusive service “FABRIK “focuses on the supply of fabric and trim to retail manufacturing facilities globally.

Fabrik is an all-inclusive service that involves the consolidated and shipment of raw materials by air, ocean and road World-wide.

When it comes to trading and shipping during challenging times, an efficient well organised supply chain can make a significant difference, with the key target to give the retailer a competitive edge using our FABRIK system. We work alongside retail buying teams to establish a bridge that offers both simplicity for the buyer but also ensures conformity to all international shipping regulation and requirement.

The supply chain of the future must have strong technology and process capabilities as essential foundation elements.

We have created a system that allows retailers to understand, control and ultimately reduce costs within the upstream of their supply chain.

Fendale has worked alongside many buying departments in many different global retail companies. We have extensive knowledge of how the departments operate and understand exactly what the buyers and merchandisers require. The experience gained during this period has allowed us to build an extensive data base of product type, allowing us to confidently confirm pricing for long periods (Per buying season). We advise pricing to buying teams on a per garment / metre / unit basis rather than per CBM / kilo as would be usual for a logistics company.

This allows for our pricing to be easily attributed to garment savings or trim pack savings.

We can consolidate and move fabric and trim globally by air and ocean. We deploy a consultative approach to education when it comes to assisting buying teams in the negotiation and arrangement of fabric contracts and terms – prior to any global movement taking place. We can arrange for buying workshops, we also produce educational material such as explainer videos and brochures for the teams so that the process and concept are understood.

BENEFITS:

  • Cost reductions
  • Greater visibility
  • Increased buying leverage
  • Better efficiency
  • Improved control

KEY POINTS TO CONSIDER:

  • Supply chain success begins with the upstream supply chain. Problems here create exponential problems in the mid-stream and especially downstream segments – Airfreight of finished product.
  • Retail supply chains, especially with omnichannel, are about the “Pull “not push of product through the supply chain. The pull demand makes supply chain integration and the upstream supply chain more important.
  • The majority of the supply chain cost is determined by the efficiency of the upstream processes and how the stakeholders interact.
  • A focus on this area typically yields greater results and have a positive impact on both Mid-stream and Downstream activities and costs. Requires strong systems and supplier co-ordination possibly via a Control Tower type of solution.
  • Upstream optimization requires a holistic approach to ensure that the concerns and needs of the respective stakeholders are recognised and addressed.
  • It is possible to break out specific areas of the upstream supply chain and tackle these for quick wins, such as freight consolidation.

Critical to any successful change within the upstream is the need to consider actual Incoterms. The standardisation and understanding of Incoterms within the upstream is crucial for success.

Incoterms are commercial terms that, properly utilized, provide precision in who does what and when in the logistics chain. The international Chamber of Commerce publishes these terms after extensive consultation. They define the role and responsibility of the buyer and seller as to who must do which part of the physical move, who provides what documentation, and who is responsible for risk and the insurance to mitigate this risk. All this is done with the Incoterms three-letter trade term, followed by a place where the buyer and sellers’ responsibilities transfer.

REGULARLY USED TERMS:

  • Ex-works: applicable when the delivered goods are at the disposal of the buyer at the seller’s location. The seller is not liable for the clearance of the goods for exports, and it helps the buyer in understanding the actual cost of the purchased product.
  • Free On Board: in this case, the seller is responsible for delivering the god and products on the vessel chosen by the buyer. However, the seller is not responsible for any damage to goods while onboard.
  • Cost, Insurance and Freight: the seller is responsible for timely delivery and proper delivery of goods on the port of buyer’s preference. The seller covers all the damage and risk of loss through freight insurance.

WHERE DO PROBLEMS ARISE?

Inco Terms are added into the Contract for Sale. These are generally negotiated by buying teams and not logistics professionals. A logistics professional should be on hand for the early negotiations to ensure any contracted product is moved in accordance with that which has been agreed.

Since logistics interacts with every department of the company, it requires teamwork and thorough integration. The broad spectrum of interactions requires the engineering of effective supply chain methodology and well -integrated implementation.

From the movement of products and information to cost and proper system integration, these colossal challenges have a significant impact on customer satisfaction and the values of both the logistics and retail industry.

CONCLUSION:

Fabrik by Ferndale; Educates, Improves Pricing, is Faster, Improves Control and Visibility within the Upstream.