FASM 420 - Global Sourcing - Donald Levy Fall 2018
1818 Courtenee Ross,Madison Musico, Caroline Miller, Brennan Cooper
Overview -1818 focuses on using eco-friendly and sustainable materials for leather accessories. Each product has elements of sustainability and is completely vegan. -1818: The year patent leather was first massproduced
Selling Proposition: 1818 products will provide complete transparency from the start of the production process to the consumer’s doorstep. Consumers will have knowledge of where each product is sourced and made. Each good sent out will have an individual stamp that promotes inclusivity. Our product’s quality will be unmatched to its competitors and consumers will feel good about buying into product that is conscious. Type of ownership: Private
Organization Chart BOARD OF DIRECTORS
GENERAL PRESIDENT
MARKETING MANAGER
PRODUCTION MANAGER
SALES DEPARTMENT
PURCHASE DEPARTMENT
PUBLIC RELATIONS
CUSTOMER SERVICE CENTER
ADMINISTRATION MANAGER
SAMPLING DEPARTMENT
ADMINISTRATION DEPARTMENT
PRODUCTION DEPARTMENT
FINANCIAL DEPARTMENT
DEVELOPMENT DEPARTMENT
PERSONNEL DEPARTMENT
QUALITY DEPARTMENT
LOGISTICS DEPARTMENT
Products Accessories -Handbags -Totes -Fanny packs -Belts -Shoes -Wallets
Inspiration
Theme Vintage, retro, with a modern twist
Brick-and-Mortar Space E-commerce In-store
Value Statement
“Modern. Classic. Future-driven.�
Mission Statement
Our mission is to provide high quality, original and timeless products - drawing from a eclection of influences - to a style-savvy woman on-the-go.
Vision Statement Combining the essence of craftsmanship with contemporary design, our vision is to encapsulate over 200 years of leather production into one, future-driven product.
Target Market Demographics: “The Young Ladies who Brunch”
-Upper mid-range annual income ($50,000 - $100,000) -Professional, working women (ages 25-55) -Includes younger, affluent women (25-35) or “New Money” -Refined and sophisticated -Single, college-educated -Career-driven
Target Market Behavioral: How does she buy? -Draws style inspiration from the hippy ‘70s and space-age ‘60s -Penchant for social media use -Buys classic, vintage pieces (leather goods, accessories, fragrance etc.) -Supports up-and-coming, young designers -Buys beliefs: supports companies driven by socio-political causes
Target Market Geographics -Lives in -Lives in or rented -Stays in
a populated metropolis an apartment, penthouse home an AirBnB on vacation
Model Companies -Rescues raw materials, transforming them into sustainable and ethical luxury lifestyle accessories -Won the IE award for sustainability in luxury -50% of proceeds go to charity -Partnered with Burberry to tackle waste created by the leather goods industry
-The first vegetarian luxury brand -Famous for vegan and ethical designs -A pioneer in luxury sustainable and ethical fashion -An ethical-movement initiator
-Eco-friendly, ethical and sustainable -The lining of every bag is made from recycled plastic bottles -Recieved the 2017 Best of Vegan Awards Vegan Company of the Year
Supplier Code of Conduct
Supplier Code of Conduct
Supplier Code of Conduct
Sourcing Guidelines
Sourcing Guidelines
Vendor Scorecard
Human Rights <90%
>80%
>60%
>30%
>0
A
B
C
D
F
Policy
Description
Score Minimum Requirement
1818 Modern Slavery Policy for Internal Staff
As according to the ILO with Prevention of Underage Labor, 1818 will not knowingly use suppliers who employ slave labor, support human trafficking, fail to comply with legal maximum working hours as specified by each country laws, and employ individuals who are under the age of 16.
Employee Feedback
Employee approval will be measured with an annual survey.
85%
Annual and Interim Human Rights Audit
Developed in consultation with our external partners specialising in human rights, the audit will measure modern slavery indicators, the most common risk areas and suggested course-ofaction.
100%
100%
Sustainability <90%
>80%
>60%
>30%
>0
A
B
C
D
F
Policy
Description
Score Minimum Requirement
Environmental Protection Agency Compliance
Vendors must limit waste acidity and wastes containing sulfides and chromium to curb the emission of volatile organic compounds into the air.
90%
“PETA-approved Vegan” logo
1818 is allowed to sell its accessories with with the logo to highlight its vegan, animal-free offerings.
e-Learning Code of Conduct Training
Employees must obtain an online certification, scoring >80%, in 1818’s current Code of Conduct upon hire and in the event of revision.
Annual Code of Conduct Audit
Audit comes from our Head of Sustainability and Ethical Trade, who is supported by an Ethical Trade Manager, and reports directly to our Chief Operating Officer.
100%
90%
Shipments and Delivery <90%
>80%
>60%
>30%
>0
A
B
C
D
F
Policy
Description
Score Minimum Requirement
Advanced Shipping Notice
On-time shipments according to ASN policies and procedures
95%
Placement to Shipment Ratio
85% of placements should be shipped, overall.
95%
Floor-Ready Policy
Policy includes proper hang-tags, handbag labeling, sizing standards, price tickets and trash-free packaging.
90%
External Monitors The worldâ&#x20AC;&#x2122;s largest independent factory-based social compliance certification program for the sewn products sector Leader in social compliance education Leading alliance of companies, trade unions and NGOs that promote respect for workersâ&#x20AC;&#x2122; rights around the globe Clean by Design, Apparel Manufacturing and Pollution
Work out the most effective steps companies can take to implement the Base Code in their supply chains
Focuses on improving process efficiency to reduce waste and emissions and improve the environment.
1818 the Company
-Product Categories: Handbags, totes, fanny packs/belt bags, belts, shoes and wallets -We have 3 stores, located in Manhattan, LA and Brooklyn -Our prices range from $200-$700
Country Ranking
Country Analysis We evaluated our countries that ranked the highest in these factors: -Ethical business climate -Proper construction -Accessibility to materials -Wide range of manufacturers -Stability of government -Less risks -Socio-eco-political climate -Compliance with Sourcing Guidelines -Wages and profitability -Fair Labor Laws -Technological Development
CHINA This country was selected for its: -Productive business climate and large economy -Low costs of production and profitability margin -Large textile production of vegan leather and vegan leather products -Access to manufacturers with various costs and skill quality -Investment in sustainability efforts, products and services -High labor force -Use of Artificial Intelligence and superior technological advancements -Rapid prototyping -Compliance with Code of Conduct and Sourcing -Guidelines -Less risk, proven location
JORDAN This country was considered for its: -Vegan leather production, but the quantity was limited -Duty Free Trade Agreement with no duty on leather products (JOFTA) -Large textile production, mostly comprised of knit woven products -Positive US relations in trying to restore peace to Middle Eastern countries. -Rising economy and developing upper middle class -Skilled workers and high quality product for our bag production -Low shipping costs, but longer lead times -Access to advanced machinery for production, but expensive costs -Fairly low risk of late delivery and other issues
INDIA This country was considered for its: -12.9% of global leather production -Flexibility, cheap labor and business economy -Logistics cost savings, contributing to 19% of its GDP -Growing industry, but lack of sustainable efforts -Social-friendly policy -Labor reform to improve unemployment rates -Fairer stability of government, but lack of technological developments
Supplier Analysis -CHINA
-Calvin Brian International Co. Unit A 25 F Legend Tower 7 Shing Kwun Tong Kowloon HK -Calvin Brian is a designing, manufacturing, and wholesaling that started in 2002. They specialize in handbags, wallets, and computer cases. Calvin Brian uses synthetic and natural material that incorporate handmade embroidery, trimming, beading, and stones. -Calvin Brian holds 300-400 skilled workers with years of experience. -They produce high quality PU, PVC, vegan leather, and fabric.
-JORDAN
-INDIA
Covers all kinds of PU dry PU & wet PU, SEMI-PU, Vinyl leather and PVC leather for fashion handbags, shoes lining and upper, automotive upholstery and stationery.
Manufacturer of various products such as; Leather Jackets, Pants Skirts, Coats, Leather Bags, Embroidered Bags, Fashion Bags, Hand Bags, Beaded Purses, and Leather Wallets, Leather Belts etc.
IBAN for artificial leather & fabric Co.ltd.
OBTP APPARELS PVT. LTD
Have strong background (have been around since 1982) and have experience in manufacturing all kinds of synthetic leather. They the first factory in Jordan to have the newest technology and equipment to improve their products and production.
Located in Dehli India and established in 2017
Guarantee â&#x20AC;&#x153;High Quality Product, Competitive Price, Prompt Delivery and Good Serviceâ&#x20AC;?.
Work with the latest machinery and technology in India.
Constantly strive for a sustainablity and constantly work with their team to try their best to provide employment to more and more people.
Strategy Publication -China was selected, because of its overall business conduction standards, profit capabilities with low cost production, and quality production of vegan leather. Our selected manufacturer is Calvin Brian International Co. -China and its manufacture comply with our Sourcing Guidelines and Code of Conduct in the following ways: Animal Welfare: 100% free of animal byproducts. Raw materials are assessed, approved and monitored. There is full transparency of material sourcing. Commitment to Sustainability: Promotion of high quality standards in terms of EPA codes to limit waste, sulfide and chromium emissions. An annual audit will be conducted at Calvin Brian International Co. to ensure compliance. Human Rights: All members within the supply chain are to be paid fairly with a livable wage, and must have clean, well-maintained working conditions. BiAnnual audits will be made by the Supply Chain Security Director. Chemical Restrictions: To ensure health and safety and its employees, members of the supply chain and product end users, hazardous substance management must be monitored by Calvin Brian Intl. Co. Manufacturer costs:
Duty: $10.10 Labor: $8.87 40 ft. Container: $3,501 Average Margin: 80.1% Average Cost/Unit: $427.59
Strategy Conclusion -This supplier works best for our company profile and our handbags, because of the sophistication of craft that we adhere to in our production quality. -With intricate styles and materials, this supplier works to precision and can best fulfill our order of 2400 units. -Calvin Brian also has access to Gen 5 Lasers for leather engraving for our embossed tags, and they audit and update equipment biannually to ensure quicker lead times on production.
1818 COSTING STRATEGY ANNUAL SALES FORECAST $6,408,000
TOTAL UNITS 12,000
AVERAGE MARGIN % 80%
AVERAGE MARGIN $ $427.59
YOKO BAG
SUKI BAG
Cost: $123.84 Retail: $620.00 Markup: 80%
Cost: $133.34 Retail: $670.00 Markup: 80%
SELENA BAG
CARO BAG
Cost: $118.14 Retail: $595.00 Markup: 80%
Cost: $86.25 Retail: $435.00 Markup: 80%
POPPY BAG Cost: $70.48 Retail: $350.00 Markup: 80%
1818 PRODUCT LINE 01
YOKO BAG #C0309
100% vegan leather handbag with embossed logo, silver hardware. The Yoko Bag has a single strap, secured zippered pocket and hook closure.
$620
02 SUKI BAG #L0681
100% vegan leather medium sized bag. The Suki Bag has 2 straps connecting at center, 2 straps coming out of gold metal grommet rings, front pocket,pocket flap with grommet ring, and gold metal snap closure.
$670
03
SELENA BAG #R7415
100% vegan leather round handbag. The Selena bag is double riveted, pocketed, multi-zipper, and has round edges.It is a casual day bag.
$595
04 CARO BAG #M3826
100% vegan leather hobo handbag, soft and slouchy sihouette, front pocket running from seam to seam, chunky D-rings, YKK zippers, inner magnetic fastenings, and self lined strap stitched edge.
$435
05
POPPY BAG #L0682
100% vegan leather medium size tote bag. Completed with two straps, zipper closure, side zipper pocket, hidden zipper pocket, elasticated mesh pocket, lining matching the outside of the bag and removeable shoulder strap.
$350
Annual Line Plan & Sales Forecast Focuses on improving process efficiency to reduce waste and emissions and improve the environment.
Supplier Ranking The worldâ&#x20AC;&#x2122;s largest independent factorybased social compliance certification program for the sewn products sector Leader in social compliance education
Final Sourcing Strategy Leading alliance of companies, trade unions and NGOs that promote respect for workersâ&#x20AC;&#x2122; rights around the globe Work out the most effective steps companies can take to implement the Base Code in their supply chains
CONCLUSION
Leading alliance of companies, trade unions and NGOs that promote respect for workersâ&#x20AC;&#x2122; rights around the globe Work out the most effective steps companies can take to implement the Base Code in their supply chains
Sources http://wgsn.com http://shopredone.com http://mansurgavriel.com http://urbanoutfitters.com/urbanrenewel https://www.peta.org/living/personal-care-fashion/peta-approved-vegan-logo/ https://environmentallaw.uslegal.com/specific-issues/leather/ https://cdn3.yoox.biz/cloud/stellawp/uploads/2017/08/SMC_Modern-Slavery.pdf http://wrapcompliance.org http://nrdc.org http://ethicaltrade.org http://www.iban.jo https://www.europages.co.uk/POLYNOVA-INDUSTRIES-LTD/00000004617751-427478001.html