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Showing posts with label Garments Merchandising. Show all posts
Showing posts with label Garments Merchandising. Show all posts

A Letter of Credit is a payment term generally used for international sales transactions. It is basically a mechanism, which allows importers/buyers to offer secure terms of payment to exporters/sellers in which a bank (or more than one bank) gets involved. The technical term for Letter of credit is 'Documentary Credit'. At the very outset one must understand is that Letters of credit deal in documents, not goods. The idea in an international trade transaction is to shift the risk from the actual buyer to a bank. Thus a LC (as it is commonly referred to) is a payment undertaking given by a bank to the seller and is issued on behalf of the applicant i.e. the buyer. The Buyer is the Applicant and the Seller is the Beneficiary. The Bank that issues the LC is referred to as the Issuing Bank which is generally in the country of the Buyer. The Bank that Advises the LC to the Seller is called the Advising Bank which is generally in the country of the Seller.
The specified bank makes the payment upon the successful presentation of the required documents by the seller within the specified time frame. Note that the Bank scrutinizes the 'documents' and not the 'goods' for making payment. Thus the process works both in favor of both the buyer and the seller. The Seller gets assured that if documents are presented on time and in the way that they have been requested on the LC the payment will be made and Buyer on the other hand is assured that the bank will thoroughly examine these presented documents and ensure that they meet the terms and conditions stipulated in the LC.


Typically the documents requested in a Letter of Credit are the following:

1.L/c application from
2.Valid trade license.
3.Import registration corticated (lrc)
4.Tin or inmates declaration
5.Memorandum of association
6.Indent pr Performa Invoice
7.Photographs
8.Bank gurrntee certificate
9.Agreement form
10.Insurance coverage
11.Commercial invoice
12.Transport document such as a Bill of lading or Airway bill,
13. Insurance document;
14.Inspection Certificate
15.Certificate of Origin


But there could be others too.

Letters of credit (LC) deal in documents, not goods. The LC could be 'irrevocable' or 'revocable'. An irrevocable LC cannot be changed unless both the buyer and seller agree. Whereas in a revocable LC changes to the LC can be made without the consent of the beneficiary. A 'sight' LC means that payment is made immediately to the beneficiary/seller/exporter upon presentation of the correct documents in the required time frame. A 'time' or 'date' LC will specify when payment will be made at a future date and upon presentation of the required documents.

Essential Principles Governing Law Within the United States, Article 5 of the Uniform Commercial Code (UCC) governs L/Cs. Article 5 is founded on two principles:
(1) the L/C,s independence from the underlying business transaction, and
 (2) strict compliance with documentary requirements.

1) Strict Compliance
How strict compliance? Some courts insist upon literal compliance, so that a misspelled name or typographical error voids the exporter's/beneficiary's/seller's demand for payment. Other courts require payment upon substantial compliance with documentary requirements. The bank may insist upon strict compliance with the requirements of the L/C. In the absence of conformity with the L/C, the Seller cannot force payment and the bank pays at its own risk. Sellers should be careful and remember that the bank may insist upon strict compliance with all documentary requirements in the LC. If the documents do not conform, the bank should give the seller prompt, detailed notice, specifying all discrepancies and shortfalls.

2) The Independence Doctrine
Letters of credit deal in documents, not goods. L/Cs are purely documentary transactions, separate and independent from the underlying contract between the Buyer and the Seller. The bank honoring the L/C is concerned only to see that the documents conform with the requirements in the L/C. If the documents conform, the bank will pay, and obtain reimbursement from the Buyer/Applicant. The bank need not look past the documents to examine the underlying sale of merchandise or the product itself. The letter of credit is independent from the underlying transaction and, except in rare cases of fraud or forgery, the issuing bank must honor conforming documents. Thus, Sellers are given protections that the issuing bank must honor its demand for payment (which complies with the terms of the L/C) regardless of whether the goods conform with the underlying sale contract.

3 Most Common Reasons why Letters of Credit Fail
1) Time Lines:
The letter of credit should have an expiration date that gives sufficient time to the seller to get all the tasks specified and the documents required in the LC. If the letter of credit expires, the seller is left with no protection. Most LC s fail because Sellers/Exporters/Beneficiaries were unable to perform within the specified time frame in the LC. Three dates are of importance in an LC:

a) The date by when shipment should have occurred. The date on the Bill of Lading.
b) The date by when documents have to be presented to the Bank
c) The expiry date of the LC itself.

A good source to give you an idea of the timelines would be your freight forwarding agent. As a seller check with your freight forwarding agent to see if you would be in a position to comply.

2) Discrepancy within the Letter of Credit:
Letters of credit could also have discrepancies. Even a discrepancy as small as a missing period or comma can render the document invalid. Thus, the earlier in the process the letter of credit is examined, the more time is available to identify and fix the problem. This is another common reason why LCs fail.

3) Compliance with the Documents and Conditions within the Letter of Credit.
Letters of credit are about documents and not facts; the inability to produce a given document at the right time will nullify the letter of credit. As a Seller/Exporter/Beneficiary you should try and run the compliance issues with the various department or individuals involved within your organization to see if compliance would be a problem. And if so, have the LC amended before shipping the goods.
Learning the Terminology of Exporting

INCOTERMS (TRANSPORTATION)
Shipping terms set the parameters for international shipments, specify points of origin and destination, outline conditions under which title is transferred from seller to buyer, and determine which party is responsible for shipping costs. They also indicate which party assumes the cost if merchandise is lost or damaged during transit. To provide a common terminology for international shipping, INCOTERMS (International Commercial Terms) have been developed under the auspices of the International Chamber of Commerce.

All letters of credit contain these elements:
  • A payment undertaking given by the bank (issuing bank)
  • On behalf of the buyer (applicant)
  • To pay a seller (beneficiary)
  • A given amount of money
  • On presentation of specified documents representing the supply of goods
  • Within specific time limits
  • These documents conforming to terms and conditions set out in the letter of credit
  • Documents to be presented at a specified place.

The stages of the letter of credit:
1.    Buyer and seller agree terms, including means of transport, period of credit offered (if any), latest date of shipment, Incomer to be used

2.    Buyer applies to bank for issue of letter of credit. Bank will evaluate buyer's credit standing, and may require cash cover and/or reduction of other lending limits

3.    Issuing bank issues L/C, sending it to the Advising bank by airmail or (more commonly) electronic means such as telex or SWIFT

4.    Advising bank establishes authenticity of the letter of credit using signature books or test codes, then informs seller (beneficiary). Advising bank MAY confirm L/C, i.e. add its own payment undertaking

5.    Seller should now check that L/C matches commercial agreement, and that all its terms and conditions can be satisfied, (e.g. all documents can be obtained in good time.) If there is anything that may cause a problem, an AMENDMENT must be requested.

6.    Seller ships the goods, then assembles the documents called for the L/C (invoice, transport document etc.) Before presenting the documents to the bank, the seller should check them for discrepancies with the L/C, and correct the documents where necessary.

7.    The documents are presented to a bank, often the Advising bank. The Advising bank checks the documents against the L/C. If the documents are compliant, the bank pays the seller and forwards the documents to the Issuing bank

8.    The Issuing bank now checks the documents itself. If they are in order (and it is a sight L/C), it reimburses the seller's bank immediately

9.    The Issuing bank debits the buyer and releases the documents (including transport document), so that the buyer can claim the goods from the carrier.

 
 Different kinds of L/C :
1. Revocable L/C/irrevocable L/C
2. Confirmed L/C/unconfirmed L/C
3. Sight L/C/since L/C
4. Transferable L/C/untransferable L/C
5. Divisible L/C/indivisible L/C
6. Revolving L/C
7. L/C with T/T reimbursement clause
8. Without recourse L/C/with recourse L/C
9. Documentary L/C/clean L/C
10. Deferred payment L/C/anticipatory L/C
11. Back to back L/Reciprocal L/C
12. TSraveller's L/C(or: circular L/C)

 1. Unconfirmed LC:
 If your credit is unconfirmed neither the advising bank or any nominated bank commits to pay under the credit. Therefore no cash cover is required at the point of establishing the LC, saving possible interest charge on borrowed funds. Payment can be made to the supplier at any time within the validity of the LC, before or after shipment as agreed by both the buyer and seller. Unconfirmed LC also eliminates the ˜confirmation charge" which is the most significant overseas bank charge.

2. Documentary L.C:
A documentary L.C is one which provides for bills to be accompanied by the documents of title to goods. Such as bill of lading, invoice and the marine insurance policy of insurance etc

3. Clean letter of credit:
If there is no condition attach to the bill and the issuing bank makes payment up to a limit of credit, the letter of credit is called clean or open letter of credit. It is payable to the exporter according to his will.

4. Fix Letter of credit:
The amount of this type of letter of credit remains the same within a fix period. When the original fixed amount is used fresh credit is necessary. In other words, a fixed L.C. is that which is available for a fixed total amount payable in one or more than one drafts.

5. Confirmed LC:
 Confirmation of LC could be backed by dollar or local currency borrowings or by outright payment of cash. The LC may be confirmed from the beginning of the transaction or at any point in the life of the LC.

6. Revolving LC:
 If you deal with a particular supplier on a very regular basis, you may save administrative time, effort and bank charges by setting up a revolving credit. This can be set up to revolve either by time or amount to mirror workflow, such as production runs or growth seasons. The major advantage being the savings made in local bank charges by grouping various LC under one Revolving LC.

7. Standby LC:
 Like a bank guarantee, a standby LC is payable on first demand, usually against the beneficiary's simple declaration of non-performance, accompanied by minimal support documentation. This offers the seller maximum control over the claims process. This is ideal for contracts involving regular monthly/periodic shipments. The supplier may wish to be secured against default in payment in open account trading or Bills for collection. Standby LC reduces the bank charges associated with LC transactions, while still providing maximum security for the supplier on various shipments. No cash cover is required for import transactions and payments are made when due eliminating both interest expense and exchange rate risk. Standby LC combines the security associated with LC with the flexibility and reduced cost associated with Bills for collection transactions.

8. An irrevocable LC:
An irrevocable LC cannot be changed unless both the buyer and seller agree. Whereas in a revocable LC changes to the LC can be made without the consent of the beneficiary. A 'sight' LC means that payment is made immediately to the beneficiary/seller/exporter upon presentation of the correct documents in the required time frame. A 'time' or 'date' LC will specify when payment will be made at a future date and upon presentation of the required documents.





Step-by-step process:

- Buyer and seller agree to conduct business. The seller wants a letter of credit to guarantee payment.

- Buyer applies to his bank for a letter of credit in favor of the seller.

- Buyer's bank approves the credit risk of the buyer, issues and forwards the credit to its correspondent bank (advising or confirming). The correspondent bank is usually located in the same geographical location as the seller (beneficiary).

- Advising bank will authenticate the credit and forward the original credit to the seller (beneficiary).

- Seller (beneficiary) ships the goods, then verifies and develops the documentary requirements to support the letter of credit. Documentary requirements may vary greatly depending on the perceived risk involved in dealing with a particular company.

- Seller presents the required documents to the advising or confirming bank to be processed for payment.

- Advising or confirming bank examines the documents for compliance with the terms and conditions of the letter of credit.

- If the documents are correct, the advising or confirming bank will claim the funds by:
  • Debiting the account of the issuing bank.
  • Waiting until the issuing bank remits, after receiving the documents.
  • Reimburse on another bank as required in the credit.


- Advising or confirming bank will forward the documents to the issuing bank.
Issuing bank will examine the documents for compliance. If they are in order, the issuing bank will debit the buyer's account.

- Issuing bank then forwards the documents to the buyer.

Letter of Credit(L/C) Work Flowchart for Garments Manufacturing Business | Letter of Credit Operation Procedures

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A Letter of Credit is a payment term generally used for international sales transactions. It is basically a mechanism, which allows importers/buyers to offer secure terms of payment to exporters/sellers in which a bank (or more than one bank) gets involved. The technical term for Letter of credit is 'Documentary Credit'. At the very outset one must understand is that Letters of credit deal in documents, not goods. The idea in an international trade transaction is to shift the risk from the actual buyer to a bank. Thus a LC (as it is commonly referred to) is a payment undertaking given by a bank to the seller and is issued on behalf of the applicant i.e. the buyer. The Buyer is the Applicant and the Seller is the Beneficiary. The Bank that issues the LC is referred to as the Issuing Bank which is generally in the country of the Buyer. The Bank that Advises the LC to the Seller is called the Advising Bank which is generally in the country of the Seller.
The specified bank makes the payment upon the successful presentation of the required documents by the seller within the specified time frame. Note that the Bank scrutinizes the 'documents' and not the 'goods' for making payment. Thus the process works both in favor of both the buyer and the seller. The Seller gets assured that if documents are presented on time and in the way that they have been requested on the LC the payment will be made and Buyer on the other hand is assured that the bank will thoroughly examine these presented documents and ensure that they meet the terms and conditions stipulated in the LC.


Typically the documents requested in a Letter of Credit are the following:

1.L/c application from
2.Valid trade license.
3.Import registration corticated (lrc)
4.Tin or inmates declaration
5.Memorandum of association
6.Indent pr Performa Invoice
7.Photographs
8.Bank gurrntee certificate
9.Agreement form
10.Insurance coverage
11.Commercial invoice
12.Transport document such as a Bill of lading or Airway bill,
13. Insurance document;
14.Inspection Certificate
15.Certificate of Origin


But there could be others too.

Letters of credit (LC) deal in documents, not goods. The LC could be 'irrevocable' or 'revocable'. An irrevocable LC cannot be changed unless both the buyer and seller agree. Whereas in a revocable LC changes to the LC can be made without the consent of the beneficiary. A 'sight' LC means that payment is made immediately to the beneficiary/seller/exporter upon presentation of the correct documents in the required time frame. A 'time' or 'date' LC will specify when payment will be made at a future date and upon presentation of the required documents.

Essential Principles Governing Law Within the United States, Article 5 of the Uniform Commercial Code (UCC) governs L/Cs. Article 5 is founded on two principles:
(1) the L/C,s independence from the underlying business transaction, and
 (2) strict compliance with documentary requirements.

1) Strict Compliance
How strict compliance? Some courts insist upon literal compliance, so that a misspelled name or typographical error voids the exporter's/beneficiary's/seller's demand for payment. Other courts require payment upon substantial compliance with documentary requirements. The bank may insist upon strict compliance with the requirements of the L/C. In the absence of conformity with the L/C, the Seller cannot force payment and the bank pays at its own risk. Sellers should be careful and remember that the bank may insist upon strict compliance with all documentary requirements in the LC. If the documents do not conform, the bank should give the seller prompt, detailed notice, specifying all discrepancies and shortfalls.

2) The Independence Doctrine
Letters of credit deal in documents, not goods. L/Cs are purely documentary transactions, separate and independent from the underlying contract between the Buyer and the Seller. The bank honoring the L/C is concerned only to see that the documents conform with the requirements in the L/C. If the documents conform, the bank will pay, and obtain reimbursement from the Buyer/Applicant. The bank need not look past the documents to examine the underlying sale of merchandise or the product itself. The letter of credit is independent from the underlying transaction and, except in rare cases of fraud or forgery, the issuing bank must honor conforming documents. Thus, Sellers are given protections that the issuing bank must honor its demand for payment (which complies with the terms of the L/C) regardless of whether the goods conform with the underlying sale contract.

3 Most Common Reasons why Letters of Credit Fail
1) Time Lines:
The letter of credit should have an expiration date that gives sufficient time to the seller to get all the tasks specified and the documents required in the LC. If the letter of credit expires, the seller is left with no protection. Most LC s fail because Sellers/Exporters/Beneficiaries were unable to perform within the specified time frame in the LC. Three dates are of importance in an LC:

a) The date by when shipment should have occurred. The date on the Bill of Lading.
b) The date by when documents have to be presented to the Bank
c) The expiry date of the LC itself.

A good source to give you an idea of the timelines would be your freight forwarding agent. As a seller check with your freight forwarding agent to see if you would be in a position to comply.

2) Discrepancy within the Letter of Credit:
Letters of credit could also have discrepancies. Even a discrepancy as small as a missing period or comma can render the document invalid. Thus, the earlier in the process the letter of credit is examined, the more time is available to identify and fix the problem. This is another common reason why LCs fail.

3) Compliance with the Documents and Conditions within the Letter of Credit.
Letters of credit are about documents and not facts; the inability to produce a given document at the right time will nullify the letter of credit. As a Seller/Exporter/Beneficiary you should try and run the compliance issues with the various department or individuals involved within your organization to see if compliance would be a problem. And if so, have the LC amended before shipping the goods.
Learning the Terminology of Exporting

INCOTERMS (TRANSPORTATION)
Shipping terms set the parameters for international shipments, specify points of origin and destination, outline conditions under which title is transferred from seller to buyer, and determine which party is responsible for shipping costs. They also indicate which party assumes the cost if merchandise is lost or damaged during transit. To provide a common terminology for international shipping, INCOTERMS (International Commercial Terms) have been developed under the auspices of the International Chamber of Commerce.

All letters of credit contain these elements:
  • A payment undertaking given by the bank (issuing bank)
  • On behalf of the buyer (applicant)
  • To pay a seller (beneficiary)
  • A given amount of money
  • On presentation of specified documents representing the supply of goods
  • Within specific time limits
  • These documents conforming to terms and conditions set out in the letter of credit
  • Documents to be presented at a specified place.

The stages of the letter of credit:
1.    Buyer and seller agree terms, including means of transport, period of credit offered (if any), latest date of shipment, Incomer to be used

2.    Buyer applies to bank for issue of letter of credit. Bank will evaluate buyer's credit standing, and may require cash cover and/or reduction of other lending limits

3.    Issuing bank issues L/C, sending it to the Advising bank by airmail or (more commonly) electronic means such as telex or SWIFT

4.    Advising bank establishes authenticity of the letter of credit using signature books or test codes, then informs seller (beneficiary). Advising bank MAY confirm L/C, i.e. add its own payment undertaking

5.    Seller should now check that L/C matches commercial agreement, and that all its terms and conditions can be satisfied, (e.g. all documents can be obtained in good time.) If there is anything that may cause a problem, an AMENDMENT must be requested.

6.    Seller ships the goods, then assembles the documents called for the L/C (invoice, transport document etc.) Before presenting the documents to the bank, the seller should check them for discrepancies with the L/C, and correct the documents where necessary.

7.    The documents are presented to a bank, often the Advising bank. The Advising bank checks the documents against the L/C. If the documents are compliant, the bank pays the seller and forwards the documents to the Issuing bank

8.    The Issuing bank now checks the documents itself. If they are in order (and it is a sight L/C), it reimburses the seller's bank immediately

9.    The Issuing bank debits the buyer and releases the documents (including transport document), so that the buyer can claim the goods from the carrier.

 
 Different kinds of L/C :
1. Revocable L/C/irrevocable L/C
2. Confirmed L/C/unconfirmed L/C
3. Sight L/C/since L/C
4. Transferable L/C/untransferable L/C
5. Divisible L/C/indivisible L/C
6. Revolving L/C
7. L/C with T/T reimbursement clause
8. Without recourse L/C/with recourse L/C
9. Documentary L/C/clean L/C
10. Deferred payment L/C/anticipatory L/C
11. Back to back L/Reciprocal L/C
12. TSraveller's L/C(or: circular L/C)

 1. Unconfirmed LC:
 If your credit is unconfirmed neither the advising bank or any nominated bank commits to pay under the credit. Therefore no cash cover is required at the point of establishing the LC, saving possible interest charge on borrowed funds. Payment can be made to the supplier at any time within the validity of the LC, before or after shipment as agreed by both the buyer and seller. Unconfirmed LC also eliminates the ˜confirmation charge" which is the most significant overseas bank charge.

2. Documentary L.C:
A documentary L.C is one which provides for bills to be accompanied by the documents of title to goods. Such as bill of lading, invoice and the marine insurance policy of insurance etc

3. Clean letter of credit:
If there is no condition attach to the bill and the issuing bank makes payment up to a limit of credit, the letter of credit is called clean or open letter of credit. It is payable to the exporter according to his will.

4. Fix Letter of credit:
The amount of this type of letter of credit remains the same within a fix period. When the original fixed amount is used fresh credit is necessary. In other words, a fixed L.C. is that which is available for a fixed total amount payable in one or more than one drafts.

5. Confirmed LC:
 Confirmation of LC could be backed by dollar or local currency borrowings or by outright payment of cash. The LC may be confirmed from the beginning of the transaction or at any point in the life of the LC.

6. Revolving LC:
 If you deal with a particular supplier on a very regular basis, you may save administrative time, effort and bank charges by setting up a revolving credit. This can be set up to revolve either by time or amount to mirror workflow, such as production runs or growth seasons. The major advantage being the savings made in local bank charges by grouping various LC under one Revolving LC.

7. Standby LC:
 Like a bank guarantee, a standby LC is payable on first demand, usually against the beneficiary's simple declaration of non-performance, accompanied by minimal support documentation. This offers the seller maximum control over the claims process. This is ideal for contracts involving regular monthly/periodic shipments. The supplier may wish to be secured against default in payment in open account trading or Bills for collection. Standby LC reduces the bank charges associated with LC transactions, while still providing maximum security for the supplier on various shipments. No cash cover is required for import transactions and payments are made when due eliminating both interest expense and exchange rate risk. Standby LC combines the security associated with LC with the flexibility and reduced cost associated with Bills for collection transactions.

8. An irrevocable LC:
An irrevocable LC cannot be changed unless both the buyer and seller agree. Whereas in a revocable LC changes to the LC can be made without the consent of the beneficiary. A 'sight' LC means that payment is made immediately to the beneficiary/seller/exporter upon presentation of the correct documents in the required time frame. A 'time' or 'date' LC will specify when payment will be made at a future date and upon presentation of the required documents.





Step-by-step process:

- Buyer and seller agree to conduct business. The seller wants a letter of credit to guarantee payment.

- Buyer applies to his bank for a letter of credit in favor of the seller.

- Buyer's bank approves the credit risk of the buyer, issues and forwards the credit to its correspondent bank (advising or confirming). The correspondent bank is usually located in the same geographical location as the seller (beneficiary).

- Advising bank will authenticate the credit and forward the original credit to the seller (beneficiary).

- Seller (beneficiary) ships the goods, then verifies and develops the documentary requirements to support the letter of credit. Documentary requirements may vary greatly depending on the perceived risk involved in dealing with a particular company.

- Seller presents the required documents to the advising or confirming bank to be processed for payment.

- Advising or confirming bank examines the documents for compliance with the terms and conditions of the letter of credit.

- If the documents are correct, the advising or confirming bank will claim the funds by:
  • Debiting the account of the issuing bank.
  • Waiting until the issuing bank remits, after receiving the documents.
  • Reimburse on another bank as required in the credit.


- Advising or confirming bank will forward the documents to the issuing bank.
Issuing bank will examine the documents for compliance. If they are in order, the issuing bank will debit the buyer's account.

- Issuing bank then forwards the documents to the buyer.

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Fabric of any garment contains most values for their prices and consumption. To make a garment fabric cost is almost 50% other than all cost. For any given FOB price the price of the fabric contain significant role. Wastage of fabric is affected the garments cost other than all costs, so consumption of fabric should be more or less similar to the actual requirement of fabric to make any garment. Simply consumption shows how many fabric is required to make garment. To get more accuracy of any consumption merchandisers should follow the actual marker considering all the sizes that we can get from CAD. Sometimes we need consumption to give quick costing of any style to the respective buyers. Due to this reason we need just a concept that how many fabric we might be required for the garment. If you have to do this then you can follow the below rules it will help you. Knit Fabric Consumption for making T-Shirt or Trouser we have already discussed and now only the woven part.
 

Consumption Formula for Woven Shirt:




 Some Measurements of any shirt-

Collar- 16"
Chest - 48"
CBL -  31"
HPS - 32.5"
Across Back - 21"
SL - 35"
Arm Hole - 21"
Yoke Height - 5"
Cuff - 9"

Cut able Fabric Width - 44"

Fabric Required for Body Portion-

Length = 32.5" + 5"(yoke) + 3.5" (Al) = 41"
Width = 48"+ 5" (Al) = 53"

= (Length x Width x 12)/(Fabric Width x Unit)
= (42" x 53" x 12) / (44" x 36")
=17.25 yards/dz

Fabric Required for Sleeve Portion-

Length = 24" + 3"(Al) = 27" (Sleeve length will be deduct from from half across back length because here sleeve length have been given from HPS)
Width = 21"+ 1" (Al) = 22"

= (Length x Width x 12)/(Fabric Width x Unit)
= (27" x 22" x 12 x 2 ) / (44" x 36")
=9.42 yards/dz

Total Fabric Requirement =   (17.25 + 9.42) yards/dz = 26.75 yards/dz
If fabric wastage percent is 5%

The total fabric requirement = 26.75 + 1.3 = 28.05 yards/dz

Consumption Formula for Woven Pant:

 
 
Some Measurement

Waist - 35"
Outseam - 42"
Inseam - 3o"
Thigh - 26"
Hip - 44"
Bottom Opening - 18"


Fabric cut able width - 56"

Length = 42" + 2"(Waist Band Height) + 3"(Al) = 45"
(I have considered out seam for length but you can consider inseam along with backrise length and waistband length for total length)

Width = 26"+ 3" (Al) = 29" (In case of 1/2 thigh circular the formula will be multiplied by 4)

Fabric required for making one dz pant

= (Length x Width x 12)/(Fabric Width x Unit)
 = (45" x 29" x 12) / (56" x 36")
=15.88 yards/dz
= consider as 16 yards/dz
Considering 5% wastage
= 16+0.8 yards/dz
=16.8 yards/dz


Dear readers,
If you have any query please send a mail i will really happy if i can solve your problem as well.

Fabric Consumption Formula for Woven Garments | Woven Shirt and Pant Consumption Calculation

Advertisements
Fabric of any garment contains most values for their prices and consumption. To make a garment fabric cost is almost 50% other than all cost. For any given FOB price the price of the fabric contain significant role. Wastage of fabric is affected the garments cost other than all costs, so consumption of fabric should be more or less similar to the actual requirement of fabric to make any garment. Simply consumption shows how many fabric is required to make garment. To get more accuracy of any consumption merchandisers should follow the actual marker considering all the sizes that we can get from CAD. Sometimes we need consumption to give quick costing of any style to the respective buyers. Due to this reason we need just a concept that how many fabric we might be required for the garment. If you have to do this then you can follow the below rules it will help you. Knit Fabric Consumption for making T-Shirt or Trouser we have already discussed and now only the woven part.
 

Consumption Formula for Woven Shirt:




 Some Measurements of any shirt-

Collar- 16"
Chest - 48"
CBL -  31"
HPS - 32.5"
Across Back - 21"
SL - 35"
Arm Hole - 21"
Yoke Height - 5"
Cuff - 9"

Cut able Fabric Width - 44"

Fabric Required for Body Portion-

Length = 32.5" + 5"(yoke) + 3.5" (Al) = 41"
Width = 48"+ 5" (Al) = 53"

= (Length x Width x 12)/(Fabric Width x Unit)
= (42" x 53" x 12) / (44" x 36")
=17.25 yards/dz

Fabric Required for Sleeve Portion-

Length = 24" + 3"(Al) = 27" (Sleeve length will be deduct from from half across back length because here sleeve length have been given from HPS)
Width = 21"+ 1" (Al) = 22"

= (Length x Width x 12)/(Fabric Width x Unit)
= (27" x 22" x 12 x 2 ) / (44" x 36")
=9.42 yards/dz

Total Fabric Requirement =   (17.25 + 9.42) yards/dz = 26.75 yards/dz
If fabric wastage percent is 5%

The total fabric requirement = 26.75 + 1.3 = 28.05 yards/dz

Consumption Formula for Woven Pant:

 
 
Some Measurement

Waist - 35"
Outseam - 42"
Inseam - 3o"
Thigh - 26"
Hip - 44"
Bottom Opening - 18"


Fabric cut able width - 56"

Length = 42" + 2"(Waist Band Height) + 3"(Al) = 45"
(I have considered out seam for length but you can consider inseam along with backrise length and waistband length for total length)

Width = 26"+ 3" (Al) = 29" (In case of 1/2 thigh circular the formula will be multiplied by 4)

Fabric required for making one dz pant

= (Length x Width x 12)/(Fabric Width x Unit)
 = (45" x 29" x 12) / (56" x 36")
=15.88 yards/dz
= consider as 16 yards/dz
Considering 5% wastage
= 16+0.8 yards/dz
=16.8 yards/dz


Dear readers,
If you have any query please send a mail i will really happy if i can solve your problem as well.
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Apparel or Garments Merchandising: Merchandising is generally related to trading where buying and selling is done. Apparel merchandising is related to the entire task related with buyer, suppliers even with factory itself. Further it means the day to day correspondence with buyers for price negotiation, order confirmation, any other approval and updates as well, on the other hand correspondence with suppliers to place orders, follow up with them to get the timely delivery and also to make the payment. It is also related with production planning team, garments production team, washing team and commercial or C&F agents as well. Co-ordination with shipping and documentation department for forwarding the approved shipment and finally keeping track of style status and updating the same to top management and buyer representatives.



Apparel Merchandiser: The person who is responsible to, negotiating to, corresponding to and managing to buyer, suppliers as well as factory people to ship the garments smoothly is known as apparel merchandiser. This is the basic concept of merchandising but the activities and responsibilities of a merchandiser depend on his work place, buyer and vendor rules or regulations.

There are different types of merchandisers available in apparel manufacturing section where job responsibilities may of different.
  • Production Merchandiser
  • Factory Merchandiser
  • Buying Office Merchandiser (Trading and Liaison office)
  • Procurement Merchandiser
  • Fabric Merchandiser
Production Merchandising covers all the area of merchandising except buying or fashion house merchandising.


Key Responsibilities and Activities of a Production/Factory Merchandiser:

i.    An order starts through sample development where merchandiser is responsible to develop the product/garment according to BOM (Bill of Materials) and GSS (Garment Specification Sheet) along with measurement chart sent by buyer.

ii.    Buyer will make comment on development sample whereby they need to change at any section such as fabrication, styling or measurement or any trims where merchandiser will responsible to follow the same and implement them to next sampling.

iii.    Now buyer will ask for costing incorporating with fabric cost, trim cost, CM & wash cost, embroidery cost as well as print cost and the concern merchant will give the same.

iv.    After getting confirmation of an order, merchandiser will book all the raw materials and trims covering this style where fabric will be booked first.

v.    Making production Time and action calendar - based on the process flow of order merchants prepare time and action calendar and indicates who is responsible for the task. This helps merchant to execute an order whether it is on time or behind schedule. Merchants chase department who are running late.

vi.    Handover the Bill of material to sourcing department - Based on tech pack (technical sheet), merchant prepares material requirement sheet. In some cases, merchants develop and purchase few trim by themselves.

vii.    Execution of sourcing trims / accessories - merchants do follow up with supplier for the raw material.

viii.    Preparing production file - Prepares production file with details documents, approvals, samples and swatches and comments on sample from buyer.

ix.     Conduct PP meeting with quality team and production team - merchants conduct pre-production (PP) meeting with production team and quality team. In this meeting merchants discuss style construction details, production plan, PCD and handover production file to the production team. One copy of production file is also made for quality team.

x.    Giving approval of printing, embroidery production and other subcontracting work.

xi.    Execution of orders whether it is running on time.

xii.    Coordination with buyer or buying house if any clarification is required during production.

xiii.    Giving clarification to production and quality team if required related to style workmanship/trims etc.

xiv.    Coordinating with buying house QA or 3rd Party QA for initial/mid and final inspection of shipment.

xv.    Coordination with shipping and documentation department for forwarding the approved shipment.

xvi.    Keeping track of style status and updating the same to top management and buyer representatives.  



Day to Day Job Responsibilities of a Buying Office Merchandiser:

i.    Communicating with buyers by mail (mostly) for new queries as well as updates

ii.    Meeting with vendors and explaining new development requirement to vendor team

iii.    Planning for new season sampling and production orders 

iv.    Collecting of garment samples, trims and different types of swatches from the vendors 

v.    Submission of samples to buyer through courier 

vi.    Follow up with vendors for samples 

vii.    Follow up with buyers for approvals and feedback 
 
viii.    Giving approval on samples where buyer intervention is not required 

ix.    Updating latest comments on particular styles or order to vendor representative 

x.    Update the buyers with the order status at all stages 

xi.    Execution of running orders (production) 

xii.    Visit to vendor site 

xiii.    Sourcing of materials for new development 

xiv.    Preparation of material requirement 

xv.    Selection and finalizing of vendors for the upcoming orders based on vendor’s experience of making similar products 

xvi.    Preparing Purchase order 

xvii.    Costing and negotiation with trim & accessory suppliers 

xviii.    Handle quality issues for sampling as well as production 

xix.    Preparing inspection schedule for shipment and notifying to quality department in the buying house or third party QA. 

xx.    Maintaining files and Accounts 

xxi.    Updating Time and Action calendar


Sampling
The samples decide the ability of an exporter. The buyer will access the exporter and his organization only by the samples. If the samples are of good quality and with reasonable price naturally the buyers will be forced to place the order. So it is essential that the samples should be innovative and with optimum quality. The purpose of sampling is not only to get bulk orders and also give some additional benefits to the exporters. By doing sampling the exporter can estimate the yarn consumption for developing the fabric, a clear idea on costing more ever the manufacturing difficulties. Besides by doing sampling only the exporter can optimize the processing parameters for bulk production, which helps to avoid all kind of bottlenecks. All these works are carried out by the sampling department, which us led by a sampling in charge.

The Details Attached to the Garment Sample
After the confirmation of order, each sample sent t 0 the buyer has the following details attached to it, with the help of a tag. It contains the details pertaining to both, what the buyer has demanded and what supplement fabric/trim etc they have used (if applicable).
  • Date
  • Style No
  • Attention Person
  • Color
  • Fabric
  • Composition
  • Description
  • Quantity
  • Size
  • Store
There may be a separate sampling department in a company. But as the merchandiser is the person who is interacting with the buyers regarding samples and other requirements, this sampling department will work under the supervision of merchandising department. Also as the samples are to be made according to the buyers’ price ranges and quality levels, merchandiser has to advise sampling department suitably.

Work Flowchart of Sampling


The Common Types of Samples Used in Apparel Making are mentioned below-
  • Proto Sample
  • Development Sample
  • Salesmen samples or promotional samples
  • Fit samples
  • Size Set Samples
  • Counter samples or reference samples or approval samples
  • Wash test/Lab test samples
  • Fashion show samples
  • Shade Band Samples
  • Pre-production samples
  • Tag/Sealer Sample
  • Production samples
  • Shipment samples

Garments Merchandising | Day to Day Job Responsibilities of A Buying House and A Factory Merchandiser

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Apparel or Garments Merchandising: Merchandising is generally related to trading where buying and selling is done. Apparel merchandising is related to the entire task related with buyer, suppliers even with factory itself. Further it means the day to day correspondence with buyers for price negotiation, order confirmation, any other approval and updates as well, on the other hand correspondence with suppliers to place orders, follow up with them to get the timely delivery and also to make the payment. It is also related with production planning team, garments production team, washing team and commercial or C&F agents as well. Co-ordination with shipping and documentation department for forwarding the approved shipment and finally keeping track of style status and updating the same to top management and buyer representatives.



Apparel Merchandiser: The person who is responsible to, negotiating to, corresponding to and managing to buyer, suppliers as well as factory people to ship the garments smoothly is known as apparel merchandiser. This is the basic concept of merchandising but the activities and responsibilities of a merchandiser depend on his work place, buyer and vendor rules or regulations.

There are different types of merchandisers available in apparel manufacturing section where job responsibilities may of different.
  • Production Merchandiser
  • Factory Merchandiser
  • Buying Office Merchandiser (Trading and Liaison office)
  • Procurement Merchandiser
  • Fabric Merchandiser
Production Merchandising covers all the area of merchandising except buying or fashion house merchandising.


Key Responsibilities and Activities of a Production/Factory Merchandiser:

i.    An order starts through sample development where merchandiser is responsible to develop the product/garment according to BOM (Bill of Materials) and GSS (Garment Specification Sheet) along with measurement chart sent by buyer.

ii.    Buyer will make comment on development sample whereby they need to change at any section such as fabrication, styling or measurement or any trims where merchandiser will responsible to follow the same and implement them to next sampling.

iii.    Now buyer will ask for costing incorporating with fabric cost, trim cost, CM & wash cost, embroidery cost as well as print cost and the concern merchant will give the same.

iv.    After getting confirmation of an order, merchandiser will book all the raw materials and trims covering this style where fabric will be booked first.

v.    Making production Time and action calendar - based on the process flow of order merchants prepare time and action calendar and indicates who is responsible for the task. This helps merchant to execute an order whether it is on time or behind schedule. Merchants chase department who are running late.

vi.    Handover the Bill of material to sourcing department - Based on tech pack (technical sheet), merchant prepares material requirement sheet. In some cases, merchants develop and purchase few trim by themselves.

vii.    Execution of sourcing trims / accessories - merchants do follow up with supplier for the raw material.

viii.    Preparing production file - Prepares production file with details documents, approvals, samples and swatches and comments on sample from buyer.

ix.     Conduct PP meeting with quality team and production team - merchants conduct pre-production (PP) meeting with production team and quality team. In this meeting merchants discuss style construction details, production plan, PCD and handover production file to the production team. One copy of production file is also made for quality team.

x.    Giving approval of printing, embroidery production and other subcontracting work.

xi.    Execution of orders whether it is running on time.

xii.    Coordination with buyer or buying house if any clarification is required during production.

xiii.    Giving clarification to production and quality team if required related to style workmanship/trims etc.

xiv.    Coordinating with buying house QA or 3rd Party QA for initial/mid and final inspection of shipment.

xv.    Coordination with shipping and documentation department for forwarding the approved shipment.

xvi.    Keeping track of style status and updating the same to top management and buyer representatives.  



Day to Day Job Responsibilities of a Buying Office Merchandiser:

i.    Communicating with buyers by mail (mostly) for new queries as well as updates

ii.    Meeting with vendors and explaining new development requirement to vendor team

iii.    Planning for new season sampling and production orders 

iv.    Collecting of garment samples, trims and different types of swatches from the vendors 

v.    Submission of samples to buyer through courier 

vi.    Follow up with vendors for samples 

vii.    Follow up with buyers for approvals and feedback 
 
viii.    Giving approval on samples where buyer intervention is not required 

ix.    Updating latest comments on particular styles or order to vendor representative 

x.    Update the buyers with the order status at all stages 

xi.    Execution of running orders (production) 

xii.    Visit to vendor site 

xiii.    Sourcing of materials for new development 

xiv.    Preparation of material requirement 

xv.    Selection and finalizing of vendors for the upcoming orders based on vendor’s experience of making similar products 

xvi.    Preparing Purchase order 

xvii.    Costing and negotiation with trim & accessory suppliers 

xviii.    Handle quality issues for sampling as well as production 

xix.    Preparing inspection schedule for shipment and notifying to quality department in the buying house or third party QA. 

xx.    Maintaining files and Accounts 

xxi.    Updating Time and Action calendar


Sampling
The samples decide the ability of an exporter. The buyer will access the exporter and his organization only by the samples. If the samples are of good quality and with reasonable price naturally the buyers will be forced to place the order. So it is essential that the samples should be innovative and with optimum quality. The purpose of sampling is not only to get bulk orders and also give some additional benefits to the exporters. By doing sampling the exporter can estimate the yarn consumption for developing the fabric, a clear idea on costing more ever the manufacturing difficulties. Besides by doing sampling only the exporter can optimize the processing parameters for bulk production, which helps to avoid all kind of bottlenecks. All these works are carried out by the sampling department, which us led by a sampling in charge.

The Details Attached to the Garment Sample
After the confirmation of order, each sample sent t 0 the buyer has the following details attached to it, with the help of a tag. It contains the details pertaining to both, what the buyer has demanded and what supplement fabric/trim etc they have used (if applicable).
  • Date
  • Style No
  • Attention Person
  • Color
  • Fabric
  • Composition
  • Description
  • Quantity
  • Size
  • Store
There may be a separate sampling department in a company. But as the merchandiser is the person who is interacting with the buyers regarding samples and other requirements, this sampling department will work under the supervision of merchandising department. Also as the samples are to be made according to the buyers’ price ranges and quality levels, merchandiser has to advise sampling department suitably.

Work Flowchart of Sampling


The Common Types of Samples Used in Apparel Making are mentioned below-
  • Proto Sample
  • Development Sample
  • Salesmen samples or promotional samples
  • Fit samples
  • Size Set Samples
  • Counter samples or reference samples or approval samples
  • Wash test/Lab test samples
  • Fashion show samples
  • Shade Band Samples
  • Pre-production samples
  • Tag/Sealer Sample
  • Production samples
  • Shipment samples
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