Are the procurement strategies different on different industries?Examples and success cases in Fashion industry by Albert Barceló and Joan Clavé

In order to understand the importance of the procurement management we need to know exactly what is it. So, as it is explained in Deltabid, a platform pioneer in supplier information, procurement management is known as “the systematic approach used for buying all the goods and services needed for a company to stay sustainable”.

Managing well this key division, will add value to all your company’s business practices and will save you both time and money. This process is based on managing the ordering, receipt, review and approval of items from suppliers. As it is a complex process, is divided in different parts:

1. Identify needs: knowing if company needs goods or services is essential to choose which service or product will fit best.
2. Finding and qualifying the suppliers: by using your own supplier databases or looking for some information on Internet you can assemble a list of potential providers.
3. Requesting proposals: based on the results you obtain on your request proposals, you will know with who you need to negotiate.
4. Negotiating with suppliers: to get the best conditions regarding prices, terms and delivery is important to deal and treat with suppliers.
5. Contracting: when both parts (the buyer and the supplier) seem to reach an agreement, you sign a contract.
6. Delivery: you need to evaluate all the quality standards that meet your requirements.
7. Analyzing results: once the whole process is complete, it is important to analyze and evaluate the success and record some observations for future projects.

Despite the possibility of applicate similar strategies in different industries, each one has its own necessities and characteristics, so that there are procurement strategies differences between them.

Fashion Industry exit cases

ZARA

Amancio Ortega’s firm’s exit is largely explained for its supply chain strategy which is described in 7 rules:

1. Produce in small lot

2. Centralize design and product development

3. Utilize work cell organization

4. Control scheduling strictly

5. Keep production in-house

6. Automate production and warehouse facilities

7. Adhere to all rules

“See now, buy now”

Burrberry initially and Tom Ford Ralph Lauren and Tommy Hilifiger later adopted this approach which consists in make new collections instantanly availabe to buy.

This strategy needs full support of the supply chain in order to produce the quantity of stock necessary to supply the potencial large initial orders but it also has a high level of risk because if those orders don’t come in, they are the ones left with the stock.

So that, it requires a strong bound of trust between suppliers and buyers, buyers need to know that suppliers will be avable to provide whatever they need with any added presures and suppliers need to belive that buyer’s designs would sell.

Albert Barceló and Joan Clavé