test 2 Flashcards
Why does today’s supply chain seem complex compared to 50 years ago?
The percentage of apparel imports has risen from 5 percent to 95 percent
When thinking about the supply chain the “customer” refers to whom?
The entity desiring some material product or service
What about the vendor?
Whomever provides the material product or service to the customer
What is sourcing?
Determining the most cost efficient vendor(s) of services, materials, production or finished goods, or a combination of these at a specified quality and service level for delivery within an identified time frame
Who might do the sourcing in a company?
Usually companies employ specialists
What do the sourcing people decide?
Responsible for acquiring diverse product categories all working under someone in a leadership position
What is just-style? (Research online)
Apparel, garment and textile industry news, analysis and research
What do sourcing individuals have to decide
Make purchasing decisions for a firm after weighing all the criteria
What is CMT?
Cut make trim
What are the benefits of CMT?
The original sourcing company, whether a manufacturer or retailer bears all the costs, and the production contractor (vendor) provides the expertise and equipment for the actual production of the garments. The customer does the product development, sources the fabric for the product line, delivers the fabric to the vendor and pays duties and transport coasts. The CMT vendor does not own the garments it simply contracts to produce them and is paid for that service
What is full package?
The vendor must contribute to and finance most of the manufacturing process including product development and materials sourcing. The sourcing customer requests price quotes from vendors covering all the specific product materials and procedures the customer will require.
What is vendor compliance?
That the performance standards established by the customer are followed in the process of developing and producing the quality and quantity of the merchandise ordered.
Why do you have to sign these terms?
Quality control and accountability
What is deglobalization?
Less outsourcing due to recession
What is a private brand?
Full package production of independent retailers
What is a private brand importer?
If the private brand retailer contracts production of these products offshore
What is the difference between a private brands a private brand importer?
a. Private brand reflects the ownership of an exclusive label by a brand manager or retailer
b. Should the retailer contract production of these products offshore, it becomes a private brand importer
What is Wal-Mart an example of?
Mass merchant
Where did Levi’s start their manufacturing and where do they manufacture now? Why?
Usa, then moved to Mexico, costs are lower
What are some manufactures now considered brand managers? Why do they outsource their production?
Too many responsibilities, now think globally, outsourcing is most cost-effective and time efficient
What are some examples of brand managers listed in our text?
VF Corporation
What is a trade fair?
EVENT DESIGNED TO GET TEXTILE AND APPAREL PRODUCERS, MANUFACTURERS, AND RETAILERS TOGETHER WITH POTENTIAL CUSTOMERS TO FACILITATE EFFICIENT TRANFER OF OWNERSHIP OF PRODUCTS AND SERVICE
Can you find CMT and full package people at trade fairs?
yes
How do you know when the trade fairs happen?
They are published in trade journals such as Women’s Wear Daily
What is MAGIC?
Men’s sportswear tradeshow, but has since expanded
What is pret-a-porter?
Trade show in Europe, couture
What is pret-a-porter?
Trade show in Europe, couture
What are some risks of off-shore production?
High investment in equipment and facilities, additionally the business and/or political climate in another nation can often change rapidly
Why is the initial investment lower for joint ventures?
Is shared ownership of a facility with a business based in another country
Why is the initial investment lower for joint ventures?
The financial risk is shared and there is often a better understanding of the culture
What is licensing?
Extending the value of a brand without actually having to product the new product
How can licensing contribute to counterfeit goods?
People want the “brand name” which is motive for counterfeits
What are sourcing agents and what is their role?
They provide services related to finding materials vendors product development services and production capacity and finished products for other firms
What are key factors for being a sourcing agent?
Determining which option is best for a business at any given time,
Who is Associated Merchandising Corporation?
Provider of apparel-sourcing and product development services for its parent company Target
What is Li & Fung?
Global supply chain managers
What factors influence sourcing option decisions?
Lots of factors to be considered including customs requirements in different countries, manufacturing philosophies, manufacturing control, sourcing calendars, and product development systems
What is agile manufacturing?
Allow quick and easy change over from one product to another without a lot of downtime, making it possible to do much smaller but still profitable production funs
What is lean manufacturing?
Emphasizes efficiency and strives to eliminate waste of time and materials through the entire process, while also improving quality.
What is a sourcing calendar?
Based on the merchandising calendar that sets the classifications of merchandise and the retail selling periods and that provides a time line related to the sequences of merchandise development.
What are specifications?
Detailed graphic and written descriptions of styling, materials, dimensions, production procedures, and finishing instructions for a garment style
Does everyone looking at the specs speak the same language?
not necessarily
How does an accurate tech pack save time and money?
by there being less confusion`
At a minimum, what should a spec pack have?
Written descriptions of styling, a detailed graphic, materials, production procedures, and finishing instructions for a garment style
Could the missing ship date on the pro forma invoice be an issue?
yes
What is the role of a letter of credit in the sourcing process?
Credit is often used to source as the selling of the final goods will provide the money for the sourcing
Why is a consolidator important in the production process?
The person or firm that combines cargo from a number of shippers going to the same destination into one container for the purpose of reducing shipping rates.
Why is it important to understand customs and the paperwork for your shipment?
It is important because you can avoid storage fees at the dock and arrangements can be made for a freight forwarder or other transporter such as a trucking firm
What is trade?
The buying and selling or bartering of goods and services.
What is trade?
The buying and selling or bartering of goods and services.
Who doesn’t support free trade? Why?
People who’s jobs will be outsourced
What is a trade policy?
Policy consisting mainly of a constantly evolving series of official objectives laws and actions designed to influence the flow of exports and imports of goods and services
what determines the trade policy?
primarily determined by a combination of economic perspectives and political positions
What is the difference between an export and import policy?
a. Export policy relates to efforts to sell domestically produced goods and services in foreign markets. May include government sponsored personel and funds to promotwe foreign sales as well as domestic laws that restric the export of selected goods to unfriendly countries
b. Import policy determines the reaalitive avalibility of foreign made goods and services in domestic markets
What’s the difference between protectionism and free trade?
Protectionism seeks to use trade barriers to minimize imports where as free trade relies on market forces to determine the volume and variety of imports
What is the purpose of trade protection?
a. to provent domestic companies from having to compete with foreign companies in their own domestic market
b. a second rationale is to make competition fairer in international markets
What is the responsibility of a customs service?
a. Monitor imports and exports
b. Assess and collect duties
c. Report imports and exports against qoutas
d. Protect the countries boarders against illegal entry
What is WCO
World customs trade organization
what is the mission of WCO?
to improve the effectiveness and efficiency of customs administrators
what measurement system does most of the world use?
metric
What is a tariff?
Most common fornm of trade protection is a tariff schedule establishing the taxes that are collected as duties on imported or exported goods
What is a nominal tariff?
The rates published in each countries tarrif schedule, are the basis of determining how much duty has to be paid on a specified product
What is the difference between a specific tariff and ad valorem tariffs?
a. pecific tariffs
i. are a fixed amount of money per physi- cal unit of product
ii. are easy to apply and administer, espe- cially on standardized goods
iii. provide a degree of protection that varies inversely with changes in import prices
b. Ad valorem tariffs are like a sales tax; they
i. are a fixed percentage of the value of
the product
ii. can be applied to products with a wide
range of product variation
iii. maintain a constant degree of protection, even when prices vary
specific tariffs
i. are a fixed amount of money per physi- cal unit of product
ii. are easy to apply and administer, espe- cially on standardized goods
iii. provide a degree of protection that varies inversely with changes in import prices
Ad valorem tariffs
i. are a fixed percentage of the value of
the product
ii. can be applied to products with a wide
range of product variation
iii. maintain a constant degree of protection, even when prices vary
Are the calculations of duties straightforward? Why or why not?
NO, they are very confusing, because differenbt goods have different taarifs applied to them
What is a free trade zone?
DEFINED AS A PORT OR OTHER SITE WITHIN A NATION DESIGNED FOR DUTY-FREE ENTRY OF SELECTED GOODS TO BE displayed stored or used for manufacturing
Why are free trade zones established?
They provide jobs and the primary suppliers are sourcing companies representing firms from developed countries that seek low cost labor and avoidance of duties on imports
What is a foreign trade zone?
A free trade zone that allows manufacturing for export
What are nontariff trade barriers?
They restrict trade by some means other than applying a tax on import or export of products
Explain exchange rates.
They determine the ration which one currency can be traded for another
Explain quotas.
RESTRICt quantites of goods that can be imported or exported but are most often applied to imports
Explain voluntary export restraints.
They are gentleman’s agreements to restrict trade, because the agreements are not formalized into international law
What are the two purposes of tariffs?
a. To restrict trade
b. To accumulate revenue for the government
What is GATT? When was it established? What is its purpose?
a. General agreement on tariffs and trade
b. 1947
c. provided an international framework that established theground rules for world wide trade among its members called contracting parties
d. primary purpose to reduce trade barrios
What is GATT? When was it established? What is its purpose?
a. General agreement on tariffs and trade
b. 1947
c. provided an international framework that established theground rules for world wide trade among its members called contracting parties
d. primary purpose to reduce trade barrios
What are the trade rounds? What were they called?
a. Multilateral negotiations known as trade rounds
b. Kennedy round, tokuo round, uruguy round
What is the MFA? What did they do?
a. Miltifiber agreement
b. Implemented quota restraints on trade
What replaced the MFA and why?
WTO, world trade organization, it didn’t work
What are the purposes of customs services?
a. Protecting intellectual property rights
b. Monitoring and documenting identities and quantities of imoports and exports
c. Reporting imports and exports against quota
d. Assessing collecting and documenting duties
e. Protecting the countries borders against illegal entry
What does it mean to be customs compliant?
Merchandise must be appropriately labeled and prepare submit customs forms and reports according to customs rules and regulations in each importing country
What is intellectual property?
Copyrights, trademarks, patentes, trade secerets and semiconductor chips, inventions or other discoveries that have been registered with government authorites for the same and use by their owner
What is IPR?
Intellectual property rights, the legal protection for intelectuall property
What is a copyright?
A legal right gained by an author composer play writght publisher or distributor to exclusive publication production sale or distribution of a literary, musical dramatic or artistic work
What is a trademark?
A word phrase logo or other graphic symbol used to distinguish one firms products or services from those of other firms
What is trademark infringement?
The act of misleading the public into believing the iteming bearing the trademark/brand name are produced and sold by the owner of the trade mark when they are not
What is pirated?
A term used in the EU; an imitation of the original; counterfeit
What are garment designs protected under?
Garments design have no rights
What is a licensing contract?
A means of transferring intellectual property rights
What is a licenser, licensee, and a royalty?
a. The licenser is the owner of a merchandising property
b. The licensee is the buyer of the rights to usae a merchandise property
c. Fee for the privledge to use a lisence
Licenser
The licenser is the owner of a merchandising property
Licensee
The licensee is the buyer of the rights to usae a merchandise property
Royalty
Fee for the privledge to use a license
How much is a royalty usually?
between 1-15 % wholesale value
what are patent laws?
Patent law grants a monopoly for a limited period of time for the use and development of invention
What is a counterfeit?
Is something that a perpetrator forges, copies or imitates ith out having the right to do so and with the purpose of deceiving or defrauding
What are gray market goods?
Are the original goods but are sold by unauthorized vendors
How do brands try to avoid gray market goods?
Only releasing a select number of signature snaps or button covers to cover the legitimate orders
Where are typical places you can find counterfeit goods?
Street vendors, flea markets, shops
What is a knockoff? What companies create knockoffs?
An imitation usually using lower cost fabric and production methods sold at a lower price
List the ways companies can violate customs.
a. Misrepresentation of country of origin
b. Misclassifications of goods
What is the COO?
country of origin
Is the COO straightforward? Why or why not?
Not at all everything could be made in china then stamped with usa because the final seam was sewn here
What is misclassification of goods?
Classifying something differently under the HS to pay less
If your company was ethical would they participate in misclassification of goods? Why or why not?
Slippery slope I mean its all about money
Does customs evaluate all containers that come through the port? Why or why not?
No too much time, only random?
What does transshipment refer to?
Transferred from one conveyance to another to continue shipment
What does transshipment refer to?
Transferred from one conveyance to another to continue shipment
What is a transshipment center?
Place where goods are consolidated into larger shipments
What is illegal transshipment? Why does it occur?
Shipment of products to a non quota or nontariff port or country changing COO and then reexporting to the intended importing countries, there are economic benefits and risks
What is human trafficking?
Facilitating the emigration of people for monetary gain,
Is human trafficking a new phenomena?
developed in many places in the world hundereds of years aggo
What are UIW’s?
Undocumented immigrant workers
\Who represents management and who represents the workers?
Trade associaions reperesent management and labor unions represent workers
Why do their reps often have conflicting viewpoints?
Retailers want free trade and workers want repesentation
What is a government subsidy?
A payment from a government to a business to defray business costs
what are production subsidies?
A negative trade tax a payment of money from a government to business to defray costs of making goods and commodities
What is one textile/apparel product that had a subsidy?
Wool
Why do developed countries’ views tend to be opposed to those of developing countries?
In developed countries we need the subsidies to maintain an industry as viable, but in other countries they could be making much more money if the US stopped paying the subsidies (EX cotton industry)
What are export subsidies?
A payment from a government to a firm as a reward for exporting products
What are price support programs? What are they sometimes used for?
a. Purchasing and storing products from the market to reduce the supply, relative to demand, to drive up the price
b. Not sure what used for… increase demand?
What is dumping?
Selling a product in another country at less than it is sold in the home country or less than it costs to produce
What does dumping result in?
Results in an import surge that causes a dramatic drop n sales for domestic companies.
What are countervailing duties?
A special tax that increases the price of goods to a competitive level
What is lobbying?
The process of influencing the formation of legislation or the administration of rules, regulations, and policies
What is AAFA? Who do they represent?
American apparel and footwear association AAFA
Who employs lobbyists?
Trade associations and labor unions
What are the preferential trade agreements
A form of economic interrogation created by reducing trade barriers
What are the four trading blocs?
a. Europe and the European Union
b. The Americas and the Caribbean
c. Asia and Oceania
d. The Middle East and Africa
What is the relationship between the countries in these blocs?
a. Each region includes a combo of developed and developing countries
b. The developed countries in a region provide market demand for the products produced with low cost labor in the developing countries.
Who is not a part of the 4 trading blocs?
Commonwealth of Independent States
