Page 67 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes 4.2 Process of Vendor Development

To get an idea of the activities and tasks involved in developing new Supplier Network, we shall
discuss briefly the process of Vendor development.

Identify Supplier
The first task starts with gathering market information and identifying the Suppliers who may
be available locally or overseas. We must assume that in current times with globalisation, the
suppliers are mostly situated in developing countries and in markets like China, S.E Asia etc.
where the cost of production and labour are less. The Merchandiser can obtain the information
from various trade journals, trade directories, internet and more importantly from Trade
Exhibitions as well as from the competition. On the other hand, major suppliers are likely to
embark on a marketing spree and thereby contact the Merchandiser as a potential customer.
Assess the Supplier Capability
Different International Retailers follow different internal processes for validating and assessing
the capability of the Supplier. At the early stages, detailed information about the Supplier’s
Organisation, Management, Technical and Production Capability, Details on quality and history
of business relations and performance etc are sought in the form of Presentation and
documentation.

!
Caution Actual Purchasing is only one stage of the process. Not all decision processes
lead to a purchase.
Visit to Supplier Site and Assessment
Once the Supplier submits or presents the marketing and other information, the Merchandiser
with his team [involving technical, quality and marketing] undertakes a visit to the Supplier site
to assess the capability and obtain firsthand information. Multi National Retail Companies
normally follow strict rules regarding ethical practices and human resource management
including safety and health and expect the Suppliers to follow the same. Site visits help the
Companies assess not only the Supplier’s technical and production capabilities but understand
its management and work culture as well as its adherence to the ethical and moral principles as
well as legislation and HR policies. Suppliers who are serious about their business and in
seeking to service such International Retail Companies will ensure that they set up and follow
international standards that are acceptable to the Buyers.
Sample Submission
On completion of Supplier site visit, if the Merchandiser and his team accept the Supplier’s
capability, they are likely to engage the Supplier in the next stage of sample design development
and submission of trial samples. Such trials can be exhaustive involving the technical and
quality teams from both sides. In fashion industry, the design and sample submission is very
critical in terms of quality as well as time. The sample batch of products submitted are released
to the market to obtain customer feedback or sometimes evaluated internally by the Buyer’s
team. In most cases the Merchandiser provides the detailed product specification, design, quality
and branding details to the Supplier and expects total compliance accordingly.

Task Discuss about Sample Submission.

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