SESSION III HOW INDUSTRY EXPERTS ADDRESS SUPPLY OPPORTUNITIES

1
SESSION IIIHOW INDUSTRY EXPERTS ADDRESS SUPPLY
OPPORTUNITIES

• MODERATED
• BY
• CHARLIE GILBERT
• CHARLES GILBERT ASSOC., INC.

2
PANELIST

• TED TAYLOR - VP TARGET SOURCING SERVICES/AMC
  TARGET/AMC
• STEVE DI BLASI - VP MFG. LANIER CLOTHES DIV. OF
  OXFORD IND.
• ROGER MCDIVITT - COO HORNY TOAD

3
RANK THE FOLLOWING

• Initial and Final Cost
• Service Level Impact on Inventory
• Demand Cycle
• Hemisphere
• Direct Ship to Store
• Political Risk
• Any other

4
WHAT IS YOUR PLAN B?

• FOR THE FAILED LOGISTICS LIKE
• SHIP SINKS
• DOCK STRIKES
• POLITICAL UPHEAVAL
• EARTH QUAKE
• TSUNAMI
• HURRICANE

5
QUOTE FROM CARLOS ARIAS OF KORAMSA

• If buyers are rewarded for first cost, Central
  America doesnt have a chance. On the other hand
  if buyers are asked to look at GMROI, were
  enormously competitive.

6
TED TAYLOR VP TARGET SOURCING SERVICES/AMC

• THE THIRD LARGEST SOURCING ORG. IN THE WORLD
• HAS A 90 YEAR HISTORY OF PRODUCT DEVELOPMENT,
  SOURCING, QUALITY ASSURANCE
• 55 OFFICES WORLDWIDE
• SOURCE FOR TARGET, LORD TAYLOR, BLOOMINGDALES,
  BON TON, BOSCOVS, TJX, SAKS, THINGS REMEMBERED,
  LINEN SOURCE AND OTHERS
• TED GRADUATED FROM LASALLE UNI.

7
STEVE DIBLASI VP MFG. LANIER CLOTHES DIV. OF
OXFORD

• CURRENTLY RESP. FOR GLOBAL SOURCING AND MFG. OF
  TAILORED CLOTHES BOTH BRANDED AND PRIVATE LABEL
• HAS SERVED IN A NUMBER OF CAPACITIES AT LANIER
  OVER 15 YRS.
• AT ONE TIME OWNED A TAILOR SHOP IN PHILA. AND IS
  A 3RD GEN. TAILOR

8
ROGER MCDIVITT COO HORNY TOAD

• BEGAN HIS CAREER MAKING ALPINE CLIMBING EQUIP.
  FOR THE PREDECESSOR OF PATAGONIA(30 yrs)
• INSTRUMENTAL IN DEVELOPING FAIR LABOR ASSOC.
• HELPED CARHARTT START THEIR SOURCING ORG.

9
EEC/AAFA Conference January, 2007
10
Associated Merchandising Corporation History
1916 Founded by Lincoln Filene, inheritor of
Filenes Department Store in 1901 and co-founder
of Federated Department Stores in 1929, to
establish an association in which retailers could
work together to exchange ideas and information.
The cooperative concept became a reality called
the Retail Research Association (RRA)
1918 The Associated Merchandising Corporation is
formed
1920s AMC goes international, opening buying
offices in Shanghai, Paris, London, and Berlin
1998 AMC is acquired by the Dayton Hudson
Corporation
2006 Target Sourcing Services/AMC 3rd Largest
Sourcing Organization with over 3 billion in
shipments
11
Department Store Group
CATALOGUE/INTERNET
SPECIALTY STORES
DEPARTMENT STORES
Target.com
OFF PRICE STORES
MASS MERCHANTS
12
Target Sourcing Services/AMC Worldwide Offices
MILAN, ITALY
POLAND
FLORENCE, ITALY
SEOUL, SOUTH KOREA
UNITED KINGDOM
TIANJIN, CHINA
MINNEAPOLIS, USA
FRANCE
QINGDAO, CHINA
ISTANBUL, TURKEY
NEW YORK, USA
SHANGHAI, CHINA
PORTUGAL
PAKISTAN
GUANGZHOU, CHINA
SPAIN
DONGGUAN, CHINA
DENIZLI, TURKEY
SHENZHEN, CHINA
THAILAND
TAIWAN
GUADALAJARA, MEXICO
EGYPT
HONG KONG
ISRAEL
NEW DELHI, INDIA
PHILIPPINES
BANGALORE, INDIA
SRI LANKA
HO CHI MINH CITY, VIETNAM
DHAKA, BANGLADESH
CHITTAGONG, BANGLADESH
INDONESIA
SINGAPORE
MALAYSIA
LEGEND
OPERATING LOCATIONS 51
13
Evolving Sourcing
14
Strategic Sourcing Criteria
Raw Materials
Apparel
Home Furnishings
Labor Force
Infrastructure
Political
Banking
Logistics
Speed to Market
Trade Relations
Global Balance
15
(No Transcript)
16
Global Sourcing in Todays Environment

• Where in the world are my clothes?

17
Sourcing Matrix
18
Product
3 Dimensional Expression Silhouette Detail
19
Process
In-Line Quality Audits Statistical Quality
Audits Marking / Grading Systems Electronic
Data Interchange Inventory Controls
20
Compliance
Oxford Terms of Engagement Environment, Health,
Safety Fair, legal labor practices WRAP Custome
r Audits Conflicting Requirements C-TPAT
Certified
21
Capacity
Multi-Line Product Quota charges Quota
Limitations TPL
22
Fabric Sourcing
Vertical operation Close proximity Reduce cycle
time
23
Trade Agreements
Duty Free Quota Elimination Short
Supply Details, Details, Details
24
Cycle Time
Faster is Better Hemisphere Integrity Transit
Time Inventory costs Speed has a price
25
Cost
Program Cost FOB Investment Direct Ship Terms
26
Political Stability
Experience Lower risk Relationship
27
(No Transcript)
28
Plan B

• Pre-Approved Compliant Facilities
• Multiple facilities in various locations
• On going approval process
• Strength of Oxford

29
Contingency Re-Cap

• Low Risk countries
• Excess Capacity
• Pre-Approval
• Multiple Carriers

30
Lanier Clothes Global Sourcing
31
QUESTIONS

• If looking for high tech or Perf. Characteristics
  of fabric does that change your sourcing
  decision?
• Have you sourced anything in Far East and had
  problems that caused you to come back to this
  Hemisphere?
• Do you see pricing pressures from raw material,
  labor, etc in Far East?
• What is your process for making a decision to
  switch your sourcing strategy from East to West
  or West to East?