Executive Summery
Bangladesh achieved striking growth in export of readymade garments and other textile products in 2007 as earning by the country’s prime industrial sectors grew by more than $2 billion, to $9.2 billion last year.
The RMG sector increased its production capacity in the quota-free post-MFA regime, and the very competitive prices of Bangladeshi apparels ensured robust growth inexpert. in 2007, Bangladesh earned $252 million by exporting other textile products: home textiles fetched $213 billion and textile fabrics $39 million. Earning of the RMG sector, which is responsible for more than ire-fourth of the country’s total export revenue, grew by nearly 30 per cent over the year.
The export-oriented RMG sector has made crucial contribution to this abovementioned transformation of the Bangladesh economy. While traditional export sector could not yield expected results, the RMG sector gradually injected dynamism in the export as well as iii the domestic economy though backward and forward linkage economic activities.
Bangladesh economy s basically driven by RMG sector, contributing around 76% to national Export income. Developing country leaders rightly claim that the RFH has unfairly restricted experts ‘ital to their development Industrialized countries first drew up the Liza Fashion Wear (Pvt.) Ltd to protect their own garment producers.
The Bangladesh RMG industry, with its woven and knit sub-components, is a pre-dominantly export oriented sector, with 95 per cent of the woven and 90 per cent of the knit exports being directed to foreign markets. Bangladesh’s RMG export earning stood at 6.58 billion U.S dollars in F006. In 2000 the sector contributed 76.6% of the total Bangladesh export of 5.0 billion dollars the same year. RMG export in FY2006 was equivalent to 9.5% of Bangladesh’s GDP over the corresponding year. At present the local value addition by the RMG sector is estimated to be 76%. Within the apparels sector, Bangladesh has been able to accomplish product Diversification. The increasing importance of the apparel sector in the Bangladesh economy is best brought out by its share in the country’s incremental export growth. Growth of RMG sector has spawned a whole new set of linkage industries and facilitated expansion of many service sector activities. As show in Table, the RMG sector has overwhelmingly high backward linkage with textile sector providing fabrics, yam and other ancillaries. Since then the RMG sector has undergone important changes, with substantial movements in terms of enhanced value addition Tough the country had some base in cotton textile industry even before the emergence of export-oriented RMG sector, its linkage with global market was insignificant. Realizing the .importance of the backward linkage industry in terms of supplying export quality yarn and fabric to satisfy the need of the growing RMG sector, the Bangladesh government took an early initiative to declare the textile sector as a thrust sector. Since the textile policy was put in place ii I995, the sector registered remarkable growth. In response to the incentive provided by the government and a ready market provided by the RMG industry, private sector came forward to invest in backward linkage industries.
Company’s Situation:
Bangladesh economy is basically driven by RMG sector, contributing around 76% to national Export income. Liza Fashion Wear (Pvt.) Ltd Human strength, Production set up & process, Channel & Network with backward linkage providers enable them to facilitate world class Garments quality at minimum cost. They arc already tested in the field of Knit, Woven and Sweater industries through providing on time delivery service to their customers.
To supply best quality apparels with competitive price as per market demand within the stipulated time by complying all societal and ecological interests. At Liza Fashion Wear (Pvt) Ltd you will have excellent infrastructure and highly experienced & skilled personnel to attain your objective through playing representatives role to monitor and assure product quality7as per demand
Research Proposal:
Situation of Rayon Knitwear Wear (Pvt.) Ltd as a business of buying house/merchandising in Bangladesh.
Research on:
Garments merchandising business in Bangladesh: Case study of Rayon Knit wear ltd
Under the Agreement on Readymade Garment Sector, Rayon Knit Wear quota has created competition from year 1996. Primarily it was a family owned business now Consists of Three Knit and One Woven Factory. All the factories are l00% export-oriented and the group’s merchandizing & marketing responsibility is taken care by CINTRON Ltd. This is very significant for any developing garments exporting countries
The issues of the report:
This report has written about garment manufacture merchandise or buying house from yarn to export. It is an invaluable aid either as an intensive self-study course or as a useful reference, have also touched on dyeing and finishing which is my area and covered some important key points to remind garment merchandisers. I am sure this report will prove indispensable of my efficiency in garments sector and buying house
Industry.
Objective:
Broad Objective
To find out the impact of Rayon Knit Wear Ltd phase out on our economy.
Specific Objective
To find out the annual export volume
To find out the major items
To find out the buyer behavior.
To find out the potential & promising market
To find out the Government responsibilities and actions
Methodology
Secondary data has been collected from BKMEA, Grtifote Export Promotion Bereave and & international textile magazine and relevant economic bulletin.
The source of Primary data is of Interviewing with some key person’s. Chairman managing directors and Executive directors of industry. As it is not impossible to get some variation of these comments & Sometime 1 have to use Judgmental Methods to draw some conclusion.
Based on the information collected from the latest secondary & primary data, the report is prepared and analyzed. Based on the analysis some recommendations have been made to make some directions that we need to follow.
This Report focuses mainly on the following areas:
Rayon Knit Wear and its features
Pasentation of the Background of the Garments Sector of Bangladesh
The current position and potential market penetration capabi1i of the competing countries.
HOW to do foreign negotiation.
Introduction
Bangladesh achieved striking growth in export of readymade garments and other textile products n 2007 as earning by the country’s prime industrial sectors grew by more than $2 billion, to $9.2 billion last year.
Industry analysts observe that the confidence of global buyers in Bangladeshi suppliers is growing. The RMG sector increased its production capacity in the quota-free post-MFA regime, and the very competitive prices of Bangladeshi apparels ensured robust growth in export. A calculation in monthly exports’ data, provided by the Export Promotion Bureau, shows that with $&933 million earned by the RMG sector alone, export earning of all textile products in 12 months of the past calendar year was $9,185 million.
In 2007 Bangladesh earned $252 million by exporting other textile products: home textiles fetched $2I3 million and textile fabrics $39 million. Growth in these categories ranged between 10 and 80 per cent in the second half of the year. Earning of the RMG sector, which is responsible for more than three-fourth of the country’s total export revenue, grew by nearly 30 per cent over the year.
In 2005, the first year in the post-Multi-Fibre Arrangement era, garment exports grew by 11 per cent to 89 billon. The EPB officially calculates export data in the fiscal year (July-June) format and it has a target of earning at least $9,496 million through RMG sector. The EPB’s latest release on Monday said that earning by the RMG sector from July-December of the current fiscal year (2006-2007) reached $4,730 million, growing by 28 per cent over the same period of the prey previous fiscal year.
At independence in 1971. most observers of the newly emerged country took a pessimistic view about the developmental prospect of Bangladesh. Man thought that the country would remain permanently locked n a below poverty level equilibrium trap’. Although there is little room for complacency Bangladesh has come a long way from there. About two-fifths of the economy is now connected with the global economy through exports, imports, factor and commodity markets; the degree of openness of the economy I currently stands at 76°/o. Bangladesh can now rightfully claim that she has graduated from a predominantly aid receiving nation to a trading nation.
The export-oriented RMG sector has made crucial contribution to this above-mentioned transformation of the Bangladesh economy. The role of our RMG entrepreneurs, domestic fiscal and firanja1, institutional policy support and incentives put in place by successive governments, substantial RMG-supportive linkage activities within the domestic economy and global market opportunities combined to create a story which is, to be honest and true, unparallel in the developing world. When jute and jute goods were losing their traditional markets, with the prospect -t’ drastic fall in forex earnings it is the RMG sector which came in first to replace it, and then to overtake it. While traditional export sector could not yield expected results, the RMG sector gradually injected dynamism in the export as well as in the domestic economy though backward and forward linkage economic activities.
Despite many difficulties faced by the sector over the past years, it continued to show robust performance, competitive strength and, of no less importance, social commitment. RMG’s contribution to Bangladesh economy is well-known, well-appreciated and well respected. However often times the magnitude of its multiplier impact and implications will justify the support that this sector has been given over the past years and also the support it is currently seeking from the government.
Bangladesh economy is basically driven by RMG sector, contributing around 76% to national Export income. Liza Fashion Wear (pvt.) ltd. Human strength, Production set up & process, Channel & Network with backward linkage providers enable them to facilitate world class Garments quality at minimum cost. They are already tested in the field of Knit, Woven and
Sweater industries through providing on time delivery service to their customers.
To supply best quality apparels with competitive price as per market demand within the stipulated time by complying all societal and ecological interests. At Liza Fashion Wear (Pvt.) Ltd. you will have excellent infrastructure and highly experienced & skilled personnel to attain your objective through playing representatives role to monitor and assure product quality as per your demand.
Contribution in GDP, Export Earnings and Local Currency Retention and foreign Exchange Earnings by the Sector
The Bangladesh RMG industry, with its woven and knit sub-components, is a pre-dominantly
export oriented sector, with and 90 per cent of the knit exports being directed to foreign markets. The cumulative foreign currency earnings by the sector since 2005, when first export was registered, is estimated at n dollars. Bangladesh’s RMG export earning stood at 6.58 billion US dollars in FY 2007. In 2006 this sector contributed 68% of the total Bangladesh export of 5.9 billion dollars in the same year. RMG export in FY2006 was equivalent to 9.5% of Bangladesh’s GDP over the corresponding year. At present the local value addition by the RMG sector is estimated to be %. Accordingly, local value addition by the sector in 2006 was about 2.1 billion US dollars which was equivalent to 4.3% of GDP for the same year. The value addition created by the sector itself is estimated at 30% to 40% of total RMG export earnings which amounted to about 1.2 billion dollars or equivalent to 2.4°/a of GDP
If we consider that the total manufacturing sector’s contribution to GDP was about 20.8% in FY2006, it would be seen that RMG sector contributed about 25.5% of the manufacturing GDP in FY 2007
Diversification
Within the apparels sector, Bangladesh has been able to accomplish product diversification. MG sector has been able to extend its product line from T-shirts, ordinary shirts, shorts. Women’s and children’s wear to shirts of complicated designs and jackets;
Sect oral contribution
Backward and Forward Linkages
Growth of RMG sector has spawned a whole new set of linkage industries and facilitated expansion of many service sector activities. The RMG industry not only propelled the growth of spinning, weaving, dyeing and finishing industries, production of accessories and spare parts, but also rendered large externalities by contributing to other economic activities in such areas as banking, insurance, real estate, packaging, hotels and tourism, recycling, consumer goods utility services and transportation.
As shown in Table, the RMG sector has overwhelmingly high backward linkage with textile sector providing fabrics, yarn and other ancillaries. It has important backward linkage with utilities such as electricity, gas, and machinery and spare parts supplying sectors. It has forward linkage with transport, communication, banking and insurance and trade services. Besides, there is a considerable subcontracting linkage within the sector. The buying house also plays important role towards bringing the manufacturers and buyers of the finished goods closer. As the input/output table shows, the RMG value-added ratio to output stood at 19% in 1993-94. Since then the R\G sector has undergone important changes, with substantial movements in terms of enhanced value addition. Direct value addition by the RMG was estimated to be about 2S%.
Though the country had some base in cotton textile industry even before the emergence of export-oriented RMG sector, its linkage with global market was insignificant. Realizing the importance of the backward linkage industry in terms of supplying export quality yarn and fabric to satisfy the need of the growing RMG sector, the Bangladesh government took an early initiative to declare the textile sector as a thrust sector. Since the textile policy was put in place in 1°95 :w sector registered remarkable growth. In response to the incentive provided by the government and a ready market provided by the RMG industry, private sector came forward to invest in backward linkage industries. Backward linkages and other related activities marked remarkable progress in the last decade, particularly since mid-I 990s.
About USS 0.5 billion of investment came to the RMG sector in the last five years. Many new mills have come under operation and some others are being set up. As of 2006 Bangladesh Textile Mills Association (BTMA) includes 524 members with 158 Spinning mills, 312 Weaving
mills, and 58 Dyeing and finishing mills which meet a substantive part of cotton yarn requirement for circular knit export, cotton fabric requirement for woven export and domestic requirement for yarn and fabric Again installed capacity in Spinning increased from 0.76 million 1984 to I.46 million in l99S and to 32 million in 2006 (BIMA). Currently BTMA member spinning mills have 3 050 000 spindles
As a Merchandiser you have to know how different countries people behave. If you know themselves than they will be pleased with you and result is good relationship and order. As per Mr Hiddenburg from Germany to make business Internationally you have to
Change yourself.
Change the others.
Change the situation.
France : If you cant speak France, apologize for your lack of knowledge. The France are quite proud of their language and believe that everyone should be able to speak it.
Germany: Germans are also stickers for titles. Try to introduce people using their full, correct little, no matter how long it is. Also Germans shake hand at the beginning and at the end of’ business meeting.
Japan : Most Japanese businessmen know what will be discussed at the meeting, how everyone feels about it, and how it will affect their business before they even get there. The purpose of a meeting is to reach consensus. A flexible agenda is necessary so that discussion how more freely. Foreigners should not try to adhere religiously to a set agenda.
Korea: While doing business with Koreans, Americans need to be sensitive to Korea’s historical relationship with Japan whi5h made a virtual colony of the Korean peninsula. Koreans co not like foreigners to assume that. their culture is the same as Japan’s. However Korean’s do have great respect for Japan’s business acumen and like the Japanese. they still observe Confucian ethics based on respect for authority and the primacy of the group over the individual.
Latin America: Although individual Latin American may vary in terms of business protocol, there are some commonalities. In L.America, it’s de rigueur to make initial face – to- face contact through an outside, liaison who knows the customer’s company well.
The liaison or enchufe, introduces the sales people or business representatives to key players.
The person at the other side of the table; buyer stereotypes
With all these traits in mind you are ready to meet the buyer. Maybe we can prepare ourselves a little bit better for the unexpected if we study the most common types of buyers also and include some advises about how to deal with them successfully;
The Silent Buyer
The fact that the customer remains rather silent does not mean that he Is not considering what is being said. The problem is that it is difficult to know what progress one is making in the negotiation. The answer of course is to involve the client by asking lots of questions. These in the main should be open questions and ideally should reflect the customer’s background rather than the background of the sales representative.
The talkative Buyer
You may find yourself confronted by a compulsive talker, or simply by a client who out-talks you as a sort of defense mechanism. The problem remains the same. Patience is required in order tot sit and let him talk himself out – then in the flow of words you will find little gaps where the customer pauses to think or the right word or phrase, to look at a visual aid or a set of figures, or to pause for breath. Seize this opportunity, not to begin speaking yourself, but simply to use the customers name. Hearing one’s name is a “stopper” in any conversation. Now quickly lock into the conversation by linking back to something which the customer has said, suggesting that you have found this of interest – i.e. “Mr. Johnson, it is interesting that you mentioned the fact that your staff has complained about…”, “Mr. Clark, you must find it disturbing that in spite of the amount of money spent on computers you are still unhappy with the network in your company.
Inevitably the compulsive talker will cut across what you are saying and start speaking again; let him have his head, and watch for the next natural pause and come in as before – and us1rn a visual aid here will help because he looks down at what you have put in front of him he will almost inevitably stop speaking for a few moments.
The Inattentive Buyer
This client may have something to hide – or he may simply be a victim of his own shyness and
Reserve- he doesn’t like to look people in the eye so he fiddles with something to give him an excuse to look away while he cares on the conversation. Ideally we should give him something to play with or look at – so once again a sates aid of some kind can be most useful here. This will focus his attention where we want it, so we have regained control of the, interview.
The Indecisive Buyer
This type of buyer can be particularly difficult – though by no means impossible. If he is unwilling or unable to make up his mind, we should go as far as we can along the road towards making up his mind for him. Start by making suggestions, backed up by benefits of him doing what you suggest. Wherever you can, give him a choice, but make it an easy choice for him to make. Not “Do you want the brown or the green?” but “Which of these do you prefer, they are both suitable and this one is little darker than the other…” When he made a choice, back it up Strongly, “Yes, I think that would be ideal”, and move or, to the next point.
The old And Experienced Buyer
‘The last thing the older customer wants Is to be “told” things by the sales person especially by those younger than he Is. Why not use his experience, Ask him things rather than tell him things. “What changes have you seen over the last twenty seven years, Mr. Smith’ What have you found to be the beat ways of overcoming this particular difficulty ?” The client who is using his “experience” as the reason for the resistance almost always responds when you encourage him to tell you about his own experience; it may not be as great as his, but it is still very relevant.
Concluding we give a summary of the most important points about what buyers like and dislike in salespeople:
What buyers like in salespeople:
Manner: polite, sincere, alert to their needs
Good sales presentation: clear, concise, well-prepared
Time awareness: appointments, punctuality
Knowledge: own product, own company, customer’s company
Sensitivity to needs: listening, not trying to sell where there is no need
Appearance: smart, fresh, clean (but appropriate to the particular working environment)
And mostly their friendly attitude
Bill of Lading (B/L):
It is a major document if the goods are dispatched by sea.
The document represents:
1. A formal receipt for the goods.
2. The evidence of the contract of carriage of the goods between the shipper of the goods und the shipping company
3. The title to the goods
A bill of lading should include the following details:
A description of the goods in general terms not inconsistent with that in the credit
Identifying marks and numbers, if any
The name of the carrying vessel
Evidence that the goods have been loaded on board the ports of shipment and discharge
The names of shipper, consignee (if not made out “to order”), and name and address of the ‘notify party if any
Whether freight has been paid or is payable at destination the number of original hills of lading issued
The date of issue
The departure date of carrying vessel
Combined transport Bill of Lading
A bill of lading covering carriage by a combination of transport movements where the carrier issuing the bill undertakes responsibility for the goods from a point or place of receipt to a point or place named in the bill of lading. This document is also commonly called a “container bill of lading’ as it is issued by container companies and their agents.
Group age Bill of Lading House Bill of Lading
When the order amount is insufficient to fill a container, the supplier might request that the forwarder combine several orders that are going to the same port of destination into one container to save freight charges for all the parties concerned. The forwarder does this and delivers the container w the shipping lines which treats the container a one shipment and issues one set of bill of lading to the order of the forwarder, who & turn issues “group age bill of lading” or “house bill of lading” to each of the suppliers. These documents merely serve as a delivery order notice or shipping certificate to direct forwarding agents at the port of destination to deliver the goods to the holders of the house bills of lading.
Negotiable Bill of Lading
The bill of lading is consigned to “the order” of the shipper, and blank endorsed on the back to the order of the bank which issues the letter of credit for the buyer.
Non-Negotiable Bill of Lading
The document is consigned to a specific party and delivery by the carrier is to the consignee only. The consignee must produce an original bill of lading in order to take delivery of the goods.
On Bill of Lading
The document confirms that the goods have been loaded on board for shipment, validated by the shipper confirming the name of the vessel and the date of hoarding. This document is always requested by the hank unless otherwise stipulated in the letter of credit.
State Bill of Lading
The bill of lading is tendered to the negotiating bank at so late a date after the negotiating bank could not negotiate the documentary letter of credit before arrival of he goods at the port of destination.
Third party Bill of Lading
This is a bill of lading that does not show the shipper as the beneficiary of the shipment but -rather that the goods are consigned to a third party. Unless Expressly prohibited in the terms of the letter of credit, this type of bill of lading is commonly accepted for negotiation by the banks.
Through Bill of Lading
This is an ordinary bill of lading with the exception that it indicates that the cargo will be unloaded at a port of discharge and then carried to a final destination by another sea carrier. The through bill of lading can also be used for transfers, transshipments, relays, or more then one mode of transport, similar to a combined transport bill of lading.
Unclean Bill of Lading
A hill of lading that bears a superimposed clause or statement Expressing reservations about the condition of the goods or packing. if such remarks are shown on a bill of lading the document will be treated as “unclean” or “claused” and considered a discrepancy by the banks.
House Airway bill
A master airway bill covers the whole shipment a house airway bill is a receipt issued by a forwarder to each separate customer for his shipment in a single airway bill.
Master Airway bill
A receipt or air consignment note issued by an airline or their authorized agent evidencing the dispatch of merchandise by air freight Usually three originals arc made: one for the consignee, one for the shipper/supplier, and one retained by the issuing carrier.
Shipping Terms
Consignce
The person whose name appears on the bill of lading or airway bill as the party to whom the goods are to he delivered by the carrier.
FCL (fu1l container load)
A fully loaded container which may be in weight or Cubic measurement terms. Contracted by one shipper, and conveyed to one consignee and to one destination.
LCL (less container loud)
A consignment of cargo which does not fill a full container grouped with other consignment for the same destination.
Shipper
This is the person whose name appears on the bill of lading or airway bill as the party who has contracted the carrier to dispatch the goods.
Shipping Marks
These are marks essential to identifying cargo and linking that cargo with specific documents. Because these marks are important as identifiers the marks and numbers should be as simple as possible. Shipping marks include the abbreviated name of buyer. reference number, destination, package number, and container number (if applicable).
Garment on Hangers (GOH)
The garments are packed into the container on hangers.
Flat Packed container (FPC)
The goods are packed into cartons and loaded into the container.
C&F (cost and freight)
The seller/supplier agrees to contract the freight and pay “cost and freight” for loading the goods, cleared for export, on board a vessel and the charges to ship the goods to destination. The buyer bears the risk of the goods from the time they pass the ship’s rail at the port of shipment and pay for the insurance coverage, and for the unloading costs at the port Destination.
CIF (cost insurance freight)
The seller’s price includes all charges, freight and insurance up to the point where the ship carrying the goods arrives at the port of destination; the goods must be cleared for export by the sc1le From that point the buyer has to bear all charges and risks including unloading costs.
CM
This refers to the manufacturing cost and this term means “cost and make”. The buyer supplies all the materials to the manufacturer.
CMQ
This term means cost, make and quality” and is similar to ‘CM’ except that the manufacturer hay to supply the quality as well.
CMT
The term means cost, make and trim”. The buyer provides the fabric, and the supplier makes the garments.
CMTQ
The terra means cost, make. trim and quality”. The buyer has to provide the fabric and the manufacturer makes the garments as well as provides the quota.
FOB
This term means “Free On Board”. ‘File Supplier is responsible for all charges (including export licenses, export taxes etc.) And risks until the goods have passed over the ship’s rail at he port of Shipment th merchandise must be cleared for export The buyer contracts and pays for the freight and bears all risks for loss or damage o the goods as soon as the merchandise passes the ship’s rail. The buyer also pays for all import duties and clears the goods through customs at the point of destination.
FOB Airport (FOA)
This is similar to the term FOB except that the node of transportation is an air carrier the supplier fulfills his obligations after he has delivered the goods to the air carrier. The goods must be cleared for export by the supplier.
Landed Duty paid (LDP)/ Delivered Duty paid(DDP)
The s’1!er fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller bears the risks and costs, including duties, taxes and other charges of delivering the goods thereto, cleared for importation. Under these terms, the seller bears the maximum responsibility, and in this case the seller has to clear the goods both for export and import.
Export License
In Hone Kong, export licenses are needed for all garments and texthe products. The licensees are issued by the Trade Department.
Packing List
This is document that indicates the contents of each individual carton! package in the container. The packing list includes the cubic measurement of the cartons/package, the weight, the number of cartons/packages, the breakdown of the goods by smzeko1or quantity This document is prepared by the seller or the ship-owner and the buyer can specify which- information should be included.
Documents against Acceptance (D/A)
The buyer is allowed to make payment for the goods on credit, its agreed between hint, and the seller. Payment for the merchandise is commonly 60 or 90 days after acceptance of documents. The buyer gains the advantage of not having to pay for the goods for a period of time after accepting the documents. The supplier bears some risk because he will not receive payment until specified period after the documents and titles to the merchandise have been acceptable.
Documents against Payment (DIP)
The supplier agrees to release any documents referring the transfer of title for the merchandise upon payment. Since the goods are produced and shipped before the supplier tenders the required documents for payment. there is some risk to the supplier for demurrage charges if the buyer does not accept the documents and title to the goods.
Open Account
This is method of payment does not involve the services of a bank, hut is based upon an agreement between the supplier and the buyer. The buyer has no legal obligation to pay the su’pi1er and payment is normally made directly to the supplier The supplier bears some risks as the goods and documents are usually: delivered to the buyer before payment is made.
Letter of Credit (L1C)
A letter of credit (also known as documentary credit) is a document issued by a bank on behalf of an applicant (the buyer) undertaking to make payment to a beneficiary (the seller) up to a stated amount of money, within a prescribed time limit and against stipulated documents.
There are usually two banks nvo1ved in a letter of credit operation. Tile issuing bank is the bank of the buyer and issues the credit the advising bank, usually located in the sellers country is the bank through which the advising bank sends the credit to beneficiary.
Types of credit:
There are three common types of Credit:
1. revocable,
2. irrevocable,
3. irrevocable and confirmed
Revocable credit: this type of credit can be amended or cancelled by the applicant without any prior warning or notice to the beneficiary. More risks are involved for the seller (the beneficiary) as lie will then have to deal directly with the buyer to obtain payment However the buyer has more flexibility.
Irrevocable credit: This type of credit can be amended or cancelled only with the agreement of all parties concerned. It also represent a definite undertaking by the issuing bank to pay provided that the stipulated documents are presented and that the terms and conditions of the credit are complied with.
Irrevocable and confirmed credit: this type of credit involves the undertaking of he sing bank in addition to that of the issui1g bank, it means that the issuing bank request a second bank to add its own conformation to the credit so that the confirming bank is responsible to make payment if the issuing bank fails to pay the beneficiary.
A 1eter of Credit should usually stipulate a requirement for the following documents
Bill of lading
Copy of the certificate of origin
Commercial invoice
Export license
Packing list
Commercial Invoice
A commercial invoice is a business document which records the sale of goods or services between two parties, and by which the seller informs the buyer of the amount to be paid for the goods. Usually, the original and four copies are stipulated in the L/C.
A commercial invoice normally includes the following information:
Date and authorized signature
The correct name and address of both buyer and seller (or the name of the consignee if the goods are not consigned to buyer)
A detailed description of the merchandise purchased strictly corresponding with the description given in the letter of credit, along with quantity, unit price, and total price, all deductions and additional charges included in the price.
Weight of the goods, number of packages, any identifying shipping marks, any import license number, contract number or any other details requested and stipulated in the L/C
Terms of delivery and payment (FOB, CTF, C&F)
The name of the issuing bank and the letter of credit number. The port, of entry for which the merchandise is destined.
The type of currency and rate of exchange
Benefits of L/C : The letter of credit is safe as more secured most convenient settlement method for International Transaction.
Procedure of Imports goods n Bangladesh
1. Procuring IRC (import registration certificate)
2. Price Inquiry
3. Placing & receiving P.1 (Performa Invoice) from the supplier.
Procuring foreign Exchange.
4. Procuring foreign Exchange.
5. Opening L/C (Letter of Credit)
6. Fixation rate & does (document)
8. Customs formalities
9. Clearing goods.
10. Closing transaction
International Trade Procedure at a glance
Common export procedure :
1. Negotiation
2. Contract
3. Implementation.
Stage of buyer sourcing
I. From trade body of different countries
2. Trade association
3. Trade organization
4. From Internet
5. Other suppliers.
Vendor selection criteria:
1. Name & address of the company.
2. Major customer & Market.
3. Capacity monthly or annually.
4. Physical size of plane.
5.NumberofempJoyee.
6. Financial Structure
7. Annual turnover
8. Location of factory/ production
9. Quality standard
10. Price reference (Manufacturing cost)
11. Minimum order quantity.
Art of Order Negotiation
Negotiation is a stimulation way to arrive at acceptable solution to the need for something. Whether it is a need to resolve or difficulty trm; Negotiation is not a contract. It is opportunities established good relationship.
Packaging
Packaging can ac define a the activities of designing and producing the container of wrapper for the product. Generally would be consider as the silent sells man of the product.
Basically three kind of package are being used by manufacture.
1. Primary package.
2. Secondary package
3. Shipping package.
Primary Package : Insertion a garments into a Polly bag is consider as the primary package of the garments. Full Visibility make the customer to identify the color, size, style and etc.
Secondary Package:
Blister Pot/v of inner carton
Assortment:
1. Solid color solid size
2. Solid color assorted size.
3: Assorted color assorted size.
Say,
M L XL
Red 4 =4
Blue 5 2 =7
Green 1 2 1 =4
The secondary package of garments would be as another Polly bag of inner carton. The container facilities to pack no. of garment pertaining to packing instruction to give the garment protection Make opportunities to sells promotion.
Shipping Package: This refer to packaging necessary for storage or identification or transportation Shipping package container some information. Shipping marks it may be printed/sticker.
Carton – 3 ply, 5 ply, 7 ply.
3 ply use for Inner carton
7 ply use for final packaging.
Various types of Samples or Stages of Samples What are samples?
Samples in the physical form of buyer specification or style of design. It represents must production in garments stage.
Many kind of samples:
1. Marketing samples/Salesman Samples. (From Ready Stock)
2. Counter Samples (As per buyer specification by available fabric, yarn & accessories)
3. Fit Samples/Red tag sample/Proto type Sample (by actual yarn, fabric, accessories)
4. Pre-production Sample/Size set sample/Production Sample.
5. Before Shipping Sample (For custom clearance)
Productivity Measurement Technique.
Many people think that increase production means increase productivity. What is your comment about this?
Productivity = OutputInput
Production = InputTime
Productivity is concern with efficient utilization of resources in producing goods. (Man, Machine, Material, Time).
Strategies to Increase productivity
1. Select main product.
2. Define output & input.
3. Identify the critical operation in the process,
4. Design a data collection system including forms, data sources and data flow.
6. Assign a trained person to handle data processing evaluation monitoring & trend analysis.
7. Explain to all workers the reason for productivity.
8. Give performance feedback using productivity data.
9. Share productivity gains.
10. Improve relation between labor & management 1I; Improve communication system.
11. Improve communication system.
12. Increase the effectiveness of all employees by proper training.
13. Proper utilization of resources.
14. To ensure proper lighting, air circulation and sanitary system.
15. Reduction in turnover of employees
16. In time salary.
17. Arrangement entertainment for employee.
18. Child care center established.
“Model Forms for the Productivity measurement system (PMS)
The person of the forms is to help you to introduce a systematic approach for measuring the “impact of the of the working conditions improvement of your enterprise.
1. Individual production report.
2. Group production report
3. A hindrance personal report.
4. Delivery performance record.
5. Accident record.
6. Preventive record.
7. Customer complain record.
8. Energy consumption record.
9. Employee turnover record.
10. Assign trained people.
Order Follow up
Just after placement of order.
.1. Study order specification sheet
a. Merchandise details,
b. Fabric, accessories.
c. Quality standard.
d. Packaging
e. Transport delivery term & payment condition.
2. Monitoring of contract.
a. Opening and monitoring files.
b. Distribute the order specification details to the respective dept.
c. Sample controlling
d. Obtaining fabric consumption & test report (lab dip).
e. Sourcing of supplier,
f. Prepare purchase documentation.
g. Conformity of purchasing the clothing materials or accessories.
3. Monitoring Import Procedure
a. Banking procedure.
b. Custom
c. Warehouse arrangement.
4. Arrival of Purchase Materials.
a Completion of custom procedure.
b. Inspection follows up.
c. Storing of clothing materials & accessories.
5.Execution factory production:
a. Execution of order.
b. Monitoring production performance.
c. Checking work in progress.
d. Monitoring quality standard.
6. Coordi,ia1ing with buying agent/buyers
a. Lesson maintaining with buying house personnel for related manufacturing issues.
7. Logistical & Distribution 110,1 Arrangement.
a. Freight forwarding follow up/shipment. (Sea/Air freight, B/L, C. Invoice)
