3763 Final Exam Study Guide Overview of the Apparel Industry Textile Industry Fiber manufacturer Yarn spinners Converters Dyers Printers Finishers Wholesale representatives who sell fabrics and findings to apparel producers Apparel Industry Apparel manufacturers and contractors Apparel wholesale reps and direct importers who sell garments to retailers Apparel retailers including department and specialty stores boutiques chain stores mass merchandisers discount stores warehouse retailers etc Traditional manufacturing is when there is complete responsibility of production of garment starting with design Refer to sources of raw materials as their vendors or suppliers Manufacturer Contractor Provide labor and equipment to produce merchandise for manufacturers and manufacturing retailers they profit from their labor Must complete their work satisfactorily and in the time frame agreed upon but they assume no risk for the success or failure of particular styles Range from freelancers who perform design or pattern making work to large companies that provide a wide variety of tasks A contractor that performs all the production operations to produce a style is called a cut make and trim contractor Vertical Integration Significantly impacts a firm s competition advantage in getting the right product to market at the right time and the right price When the SAME firm is responsible for multiple steps in the production or marketing of an apparel PRODUCT Fully vertical company controls all the steps in the process Horizontal Integration Prioritizes the acquisition or licensing of companies or brands that make or sell similar products to expand market penetration and reduce competition Acquiring another firm and or competitor at the same stage of the supply chain Inside shops vertical integration consolidate supply chain of manufacturing by acquiring companies at other stages in the supply chain When manufacturers operate their own factories Fewer communication problems Tighter control over quality processes and procedures Move control over timing making it easier to meet delivery dates Saving time and transportation costs if garments are made domestically Easier to ensure work is done in compliance with human rights and environmental regulations Outside shops companies that exclusively use independent contractors No investment in plants and equipment s Fewer employee training needs and fewer personnel problems and demands No need to buy and maintain factories and equipment as business grows No need to employ workers between seasons if the business slows The ability to perform specialty work as needed Wholesale reps agents of apparel manufacturing companies they sell finished garments to retail buyers The reps sell to retail buyers at trade shows and in showrooms at market centers and make on site visits to buyers to show them new lines Wholesale Retailers Sell to the ultimate consumers Traditional retailers buy finished apparel products from domestic manufacturers and or direct importers and sell these goods to consumers Manufacturing retailer serves a dual role that of the manufacturer responsible for producing private label brands and that of the traditional retailer selling finished goods to the consumer Branded apparel developed by a manufacturer and sold to many retailers under the trademarked brand name Created under a label and sold at wholesale for distribution to retailers who also carry other brands Private label apparel merchandise developed by or for a specific retailer it is exclusive to a specific retailer and gives retailers more control over the production and assortment of products they offer to consumers provide exclusivity and customization Import to buy goods from another country Export to sell goods to another country Trade deficit when a country imports more goods than it exports Tariff a tax on imported goods Quota an annual limit on the volume of a product that may be imported Embargo prohibition of importing a product Trade Dress refers to the shape and features of the product itself that are not only distinctive but also identify the manufacturer of the product Patent exclusive right to produce an item CMT cut make and trim a contractor that performs all the production operations to produce a style Subcontractor perform specialty work for other contractors and manufacturers quickly and economically pleating quilting embroidery and screen printing Licensing the process by which a manufacturer licensee pays a fee to an individual or company licensor for the privilege of affixing the licensor s name trademark or logo to the licensee s products Landed Cost the end cost of an internationally shipped item This includes purchase price freight insurance and other costs and may sometimes include duties and taxes FOB free on board meaning that the buyer pays for transportation of the goods NAFTA policy creating a single North American market for goods originating in the United States Canada and Mexico EU European Union trading bloc of European countries TFPIA Textile Fiber products Identification Act Federal law requiring that all apparel sold in the United States have a label that identifies fiber content manufacturer and country of origin Replaced General Agreement on Tariffs ad Trade GATT and Agreement on Textiles and World Trade Organization WTO Clothing ATC Fundamental of WTO Promotion of free trade through reduction of tariff trade barriers Equalization of trade among countries Quality to cost ratio How much you are willing to pay to have quality measured against what they will give up in order to have a lower price Detection after the event Tolerates waste raises cost loses orders destroys jobs Prevention before the event Avoids waste lowers cost gains orders protects jobs Labeling RN RN stands for Registered Identification Number Businesses can use this number on product labels in lieu of the company name Knockoff copy or near copy of a design under a different brand name Counterfeit fakes or copies of currently popular brands accompanied by the illegal trademark Copyright the exclusive right to reproduce a work of art the design must contain original works of authorship that is pictorial graphic or sculptural features that are identified separately from the article on which the design appears Fiber Yarn Fabric Fiber the raw materials from which fabrics are made they are the basic building blocks of a fabric Physical features determine performance Two types Natural
View Full Document
Unlocking...