Types of Suppliers in Apparel Industry with Advantages and Disadvantages

What is a supplier or vendor?

A supplier is a third party that performs services or functions on behalf of a company. In the apparel industry, suppliers are appointed by an export house or by the buyer. In this article, we will discuss the types of suppliers in apparel industry as well as vendor in apparel industry. Though the apparel industry is capable of producing most of its requirements through in-house manufacturing, it sometimes prefers outside sourcing to in-house manufacturing.

Suppliers in Apparel Industry — Figure 1:vendor in Apparel Industry

Supplier selection process

A common procedure of supplier selection process in apparel industry is given below:

Identify suppliers: A supplier selection process in the apparel industry begins with gathering stakeholders’ opinions and defining the selection criteria. As part of this list, you may include members from your organization’s research and development, purchasing, marketing, quality assurance, and other areas that impact supplier selection. Then, identify a few suppliers to assess their capabilities and compare pricing.
Measure performance: This is the second task of the supplier selection process. To evaluate the performance of the vendor or supplier, a first audit must be conducted. By auditing the supplier, the manufacturer will be able to determine if there are any significant compliance or quality system failures that may impair the manufacturer’s ability to produce top-quality products.
Supplier feedback: Furthermore, supplier self-assessments can be used to identify performance gaps and determine how suppliers understand their own operations. Monitoring informative metrics that direct value to the business is also beneficial.
Certification: As supplier relationships grow stronger, and both parties feel they are receiving positive performances, the supplier may be able to achieve a certified status. It is necessary to maintain a successful performance in order to obtain certification, and a negative compliance outcome from an audit can result in a loss of certification.

Types of Suppliers in Apparel Industry :

There are two types of suppliers in apparel industry. They are

Nominated supplier
Non-nominated supplier

1. Nominated Supplier

The nominated suppliers are the suppliers recommended by the buyers of a particular order. This process was initiated by the buyers in order to increase control over the supply chain of their product. Nominated suppliers are typically recommended for products such as accessories, fabrics, packaging materials, and logistics, which has become more common in recent days.

Advantages of nominated supplier

Advantages of the nominated supplier is given below:

The garment manufacturer saves time by dealing with only one supplier to get one or more materials
The buyer ensures and takes care of quality assurance of the raw materials
As the nominated supplier already has experience in the field, they can be involved in product development.

Disadvantages of Nominated Supplier

Along with these advantages, there are certain disadvantages of nominated supplier. Disadvantages of nominated supplier are given below:

Nominated suppliers may become overconfident about the quality of their products
In the market, there may be a monopoly
Nomination may lead to unethical practices such as corruption by agents and traders
The supplier may sometimes overcharge, resulting in a loss of price competitiveness.

2. Non-nominated Supplier:

Most of the time, the buyer sends the technical information sheet of a particular order and he/she will ask the manufacturers to source raw materials, accessories, and other materials to develop their product. As a result, manufacturers will have access to a variety of vendors/suppliers in their company database as regular suppliers and will select the one that best meets their needs. This types of suppliers is called non-nominated supplier.

Advantages of non-nominated supplier

Due to highly competitive markets, the non-nominated supplier works hard and follows instructions given by the buyer or garment manufacturer.
Exporters of garments may be able to explore the innovative products offered by non-nominated suppliers
Based on raw material availability or technology, manufacturers may also find potential suppliers who can offer high-quality products at low costs.

Disadvantage of non-nominated supplier

The disadvantages of non-nominated suppliers are as follows:

A communication gap between the buyer and supplier may result in flaws in the raw material’s quality
It is difficult to involve these suppliers in the product development process
The buyer will have difficulty controlling areas like social compliance and ethical business practices.

Which Types of Suppliers in apparel industry is better? and why?

Nominated supplier is better than non-nominated supplier because there are two major reasons which is given below:

Nominated suppliers will provide high quality raw materials conforming to the buyer’s specifications so that there will be no quality deviation between companies.
The nominated supplier can avoid unnecessary delays in the order processing. Since they develop raw materials or products specifically for this buyer, they understand the importance.

Due to the above two major reasons, we called nominated supplier is better than non-nominated supplier in apparel industry.

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