Trinity

TRINITY

FINAL PROJECT FASM 420 GLOBAL SOURCING | PROFESSOR DONALD LEVY CALLOWAY KANDT, ELIZABETH FUCCI, NICOLE NG

TRINITY OUR MISSION To create a solution for the fashion conscious woman who seeks adventures in both the city’s streets and nature’s trails using ecofriendly materials and innovative technology.

OUR VISION To promote change in the fashion industry by minimizing our carbon footprint in bringing environmental issues to light.

COMPANY OVERVIEW LOCATION We are located in Boulder, Colorado, a place tucked into the foothills below The Flatirons. It is one of the nation’s best place to indulge in outdoor sports, as you’ll be able to find 45,000 acres of designated space to hike, ride a bike, climb a mountain, kayak a river and the list goes on.

PRODUCT Trinity offers a selection of hiking boots that is functional yet fashionable. Our boots are made with the wellness of people and the environment in mind.

SOURCING GUIDELINES As a business and as a brand, Trinity recognizes the impact it can have on the earth and those living in it. With that power, comes a certain responsibility; that responsibility is the priority and the very core of the company, ingrained into all aspects of the business from design to production to sourcing and even human resources. Trinity’s code of conduct reflects and supports the beliefs and mission of the brand to be socially and environmentally responsible. This goes hand in hand with our goal of consistently creating a product with made-to-last, quality materials.

• Female • 28 • Middle-upper class, adventurous, driven, athletic, tests limits, balances work & play • VALS: innovator and experiencer

CUSTOMER PROFILE

PRODUCTS ankle001 Sleek leather boot with edgy overlaying ankle strap Size: 5.5 - 11 Price: $190

worker001 Sleek leather worker booth with edgy overlaying strap Size: 5.5 - 11 Price: $235

hiking001 Sleek leather hiking boot with shoelaces that tie off in the back Size: 5.5 - 11 Price: $240

lace001 Sleek leather knee high hiking boot that ties all the way up Size: 5.5 - 11 Price: $240

COUNTRY ANALYSIS

C HI NA

Location: China is located in Eastern Asia and borders

the following seas: East China, Korea, Yellow, and South China. China lies in between North Korea and Vietnam.

Its geographic coordinates is 35 00 North, 105 00 East.

Sustainability: Much of China is under forest cover.

China understands and studies environmental issues and solutions, but is currently not enforcing many new policies or initiating change. Pollution is a constant issue and has reached harmful levels. China still uses coal as its primary energy source, which is inhibiting progress. Mining, industrial waste dumping, and polluted water irrigation is the root of the problem of soil contamination in China. However, the country is making some effort, and has actually overtaken the United States in the category of installed renewable energy capacity, such as wind turbines and solar panels.

Fair Labor Laws: The government initiated the Hukou

system in 2012, which eliminates the differential treatment between the rural and urban populations, thus giving migrant workers access to social security and other benefits. The amount of poverty and inequality is going down, and the 12th fiveyear plan aims to keep that going by increasing social welfare payments, raising wages and improving healthcare. A factor that may inhibit this is the overwhelming and ever-rising population.

Technology: China is certainly equipped for advanced

research, with several R&D institutions. The country is becoming more and more relevant with an impressive presence in the world of science and technology thanks to the R&D pacts with over 150 other countries. China has many scientists, graduates from the China Academy of Science, holding key positions in over 1.000 international scientific organizations in which they are a member.

Trade: China is currently working to add eight more Free Trade

Agreements to its already existing 14 FTA’s that it has maintains with trade and investment partnering countries. China’s FTA partners are ASEAN, Singapore, Pakistan, New Zealand, Chile, Peru, Costa Rica, Iceland, Switzerland, Hong Kong, Macao, Korea, Australia and Taiwan. China has a trade agreement with the United States through the World Trade Organization Accession.

The agreement signed with the United States preceding China’s accession remains a good general guide to the obligations China entered into with its WTO partners. The US and China in existence today has a Bilateral Investment Treaty set in place.

Cost: GDP is $11.4 trillion and at a growth rate of 6.7% (2016).

China has been the destination of choice for production of global clothing brands for the world over the last several decades.

Rising labor cost, and a global economic slowdown have resulted in slower growth in this sector, as neighboring countries have begun to take over more and more of the low cost production.

I TALY

Location: Southern Europe, a peninsula extending into

the central Mediterranean Sea, northeast of Tunisia. Strategic location dominating central Mediterranean as well as southern sea and air approaches to Western Europe.

Sustainability: Unlike other countries in EU, Italy does

not have any legal requirements for sustainability. However businesses and farmers are encouraged to improve environmental standards and act responsibly. Financial incentives are given to local businesses and regions who practice sustainable farming.

Yet there isn’t a uniform sustainability criteria have not yet been defined.

Fair Labor Laws: Average 19 EUR/hr 15 EUR/hr for manufacturing

Technology: The biotechnology market is taking off (third largest in Europe)

Trade Agreements

- Italy has been a WTO member since 1 January 1995 and a member of GATT since 30 May 1950. All EU member States are WTO members.

- Italy and the United States are partners in the ongoing Transatlantic Trade and Investment Partnership (T-TIP) negotiations. T-TIP is an ambitious, comprehensive, and highstandard trade and investment agreement that aims to bolster the strong U.S.-EU relationship, add to the more than 13 million American and EU jobs supported by transatlantic trade and investment, and help unlock opportunity for American families, workers, businesses, farmers and ranchers through increased access to European markets for Made-in-America goods and services.

- (In negotiation) Friends of Ambition (NAMA)

Cost

GDP: 2.15 trillion USD

COUNTRY

V I ET NAM

Location: South China Sea coast of the Indo-Chinese peninsula

Sustainability: Vietnam has environmental laws such as;

Mineral Law, Law of the Protection of Public Health, Forest Protection and Development Law, Petroleum Law, Land Law, Water Resource Law, and the Enterprise Law. In 2015, Strengthening Capacity and Institutional Reform for Green Growth and Sustainable Development (CIGG) was launched.

The primary aim of the project is to provide assistance in capacity building and policy development for the proper implementation of the country’s green growth strategy, at both national and provincial levels. World Bank is helping Da Nang, Vietnam-Sustainable Urban Energy and Emissions Planning (SUEEP) process, which provides a framework to help cities mobilize financially and carry out a series of investments in energy efficiency and green infrastructure.

Fair Labor Laws: National Assembly of Vietnam passed new Labor Code (10/2012/QH13) on June 18, 2012

Technology: In 2012, Vietnam approved the strategy for science and development for the period 2011–2020. The strategy aims to increase the value of hi-tech products to around 45% of

ANALYSIS

the GDP by 2020. The strategy also aims to increase the number of officers in charge of scientific research and technological development to nine persons per 10,000 people. In January 2016, ex-prime Minister Nguyen Tan Dung approved a plan to develop the country’s telecommunications network up to 2020, with a target of 40–45% of fixed broadband penetration by 2020.

The plan is to achieve coverage of at least 95% residential areas with 3G/4G services with average speed of downstream speed of 4 Mbps in urban and 2 Mbps in rural areas.

Trade Agreements: TPP (Trans-Pacific Partnership)

agreement, member of WTO (World Trade Organization), ASEAN (Association of Southeast Asian Nations)

Cost: GDP (2016): 163.52 billion, 6.38 GDP growth rate; GDP (2020): 206.88 billion, 5.92 GDP growth rate

COUNTRY SELECTION China In the first quarter of 2016, the quantity of leather shoes produced by medium and large sized manufactures totaled 970 million pairs with a year-on-year rise of 1.1%. Exports of all kinds of shoes totaled 2.28 billion pairs with a value of USD 10.48 billion, down by 7.7% and 13.2 % respectively year-on-year. Imports reached 28.45 million pairs totaling USD 660 million, up 19.6% and 11.9% respectively compared to last year.

Among the export figures, upper leather shoes accounted for 160 million pairs at a value of USD 2.1 billion, down 18.9% and 24.1% respectively while imports amounted to 7.16 million pairs and USD 300 million, a decline of 6.1% and 8.5% respectively. China remains the largest global footwear manufacturer, supplying products to countries all over the world. Leather shoes is the largest product segment of the industry.

Leather shoe production and exports has grown steadily over the five years through 2015, increasing at an estimated yearly rate of 5.9%.

Recently, international competition and manufacturing being transferred to Southeast Asia has challenged the industry. Still, from 2010 to 2015,, industry revenue grew about 6.6% each year.

It a l y Italy is well known for its leather goods, including leather for footwear.

They process about 60% adult cattle, 10% sheep, 10% goats, 8% calves and 0.4% of reptiles and pigs. The leather production is primarily (50%) footwear, 20% leather goods, 19% leather furnishing and 5% bookbinding and accessories. The rest are for clothing and car interiors.

Their tanning industry is also the most internationalized sector, with exports to approximately 120 countries. Regardless of the strong global competition, Italy still leads with production reaching 20% of the world’s production.

Vi e t n a m With over 90 million people currently in Vietnam, footwear has become a very attractive category to both local and international manufacturers.

In order to attract customers, most domestic manufacturers will focus on launching new designs, improving the quality and expanding their distribution networks. Meanwhile, international brands will concentrate on organizing promotional events. Vietnam has a growing economy with several laws for sustainability. There are adequate laws in place for labor.

SUPPLIER ANALYSIS China

Damco China Ltd. Tianjin Branch

“Our global presence, local on-the–ground experience and consistent high quality solutions have made Damco a recognized provider of supply chain and transport solutions to the retail industry. Our end-toend supply chain and transport solutions include the management of all activities from raw material sourcing, through to production, shipping, and delivery of the final product to the customer."

“Our proven solutions demonstrate that green supply chains are lean supply chains – good for both business and the environment.“ “Within Damco we promote an open reporting culture involving collaboration and active dialogue between all stakeholders to effectively manage Health and Safety risks. We seek to encourage an environment of awareness, participation and continuous improvement in all aspects of Health & Safety, which we call “Constant Care”.”

It a l y Calzaturificio Carisma

Calzaturificio Carisma is an innovative company with people who know how to combine skill, passion and team spirit. Founded in 1951, they are experienced in footwear especially footwear. They have been certified with the ISO 9001 quality certification for their level of workmanship and quality in materials used. They have also been certified with the Social Accountability 8000 Certification as they are committed to social responsibility. Showing respect for people and environment to further develop their home territory with constant devotion to quality service, efficiency and innovation. Burberry is one of their top customers.

Vi e t n a m Innolux Group

“Goodyear shoes were traditionally made in Italy, France, Spain and the UK. More recently, the Japanese had embraced their production as well.

However, with the rising labor costs in both Europe and Japan, factories that produced Goodyear shoes using traditional methods have almost vanished. Production moved elsewhere, and over the last 10 years, the techniques and know-how were brought to Asia.

One key benefit of having a Goodyear welt construction is it allows the shoe to be resoled repeatedly, giving it a much longer lifespan than that of an average shoe – in some cases, for up to 20 years, providing the upper part of the shoe is well maintained. Another benefit of the process is having a shoe that’s relatively water-resistant due to the welt-sole construction. Some of the top-end brands that sell dress shoes created with the Goodyear welt process include Alden, Church, Crockett & Jones, Loake Shoes, and Wildsmith Shoes”

STRATEGY CONCLUSION As a business and as a brand, Trinity recognizes the impact it can have on the earth and those living in it. Trinity’s code of conduct reflects and supports the beliefs and mission of the brand to be socially and environmentally responsible. This goes hand in hand with our goal of consistently creating a product with made-to-last, quality materials. China, Italy and Vietnam are the best match as they meet the requirements for both cost and product.

APPENDIX

COUNTRY RANKING

SUPPLIER RANKING

MONTHLY LINEPLAN UNIT BREAKDOWN

COST SHEETS

COST

SHEETS

COST SHEETS

TECH PACKS

TECH

PACKS

TECH PACKS

REFERENCES - https://books.google.com/books?id=n13UlYto0RkC&pg=PA52&lpg=PA52&dq=markup+for+hiking+boots&source=bl&ots=Bmj2Zviu_O&sig=lUF478ynStskBLDGXbpaxGxYcsU&hl=en&sa=X&ved=0ahUKEwj6s4b_y67QAhVrhlQKHe0aBKoQ6AEINzAE#v=onepage&q=markup%20for%20hiking%20boots&f=false - http://www.merrell.com/US/en/blog?url=%2F/merrell_us/whatsinside-a-hiking-shoe/ - http://us.vibram.com - http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Italy%20 and%20Sustainable%20Agriculture%20Overview%20_Rome_Italy_2-11-2013.pdf - http://www.leatherfor.us/en/leather/38-0-About-leather.html - http://www.calzcarisma.com/ITA/ - http://www.damco.com/en/about-damco/company-movie_video-page - http://www.colorado.com/cities-and-towns/boulder - https://www.timberland.com - http://www.americanshoefactory.com/category-s/42.htm - http://www.dutycalculator.com/dc/86322205/shoes-footwear/shoeswith-leather-upper-man-made-sole/men-ankle-boots/import-dutyrate-for-importing-la-sportiva-hiking-boots-from-united-states-tocanada-is-18/ - https://www.apllogistics.com/wps/portal/apll/!ut/p/ z0/04_Sj9CPykssy0xPLMnMz0vMAfIjo8zi_d0tnd3dLYzc3S0DLQ08Q8L8DMP8nY1c3Yz0C7IdFQEc6sHU/p0/IZ7_41E6IG82GG7M80I3L8U6DCPOR4=CZ6_OG9CGG82GG9Q90ITVN1VOC2EF2=MECTX!QCPAPLL_ContentLibQCPAPLLQCPAPLL_SA_HomeQCPSA-RegionsQCPSA-SouthEastAsiaQCP==/p0/ IZ7_41E6IG82GG7M80I3L8U6DCPOR4=CZ6_OG9CGG82GG9Q90ITVN1VOC2EF2=MECTX!QCPAPLL_ContentLibQCPAPLLQCPAPLL_ SA_HomeQCPSA-RegionsQCPSA-SouthEastAsiaQCPVietnamQCP==/ p0/IZ7_41E6IG82GG7M80I3L8U6DCPOR4=CZ6_OG9CGG82GG9Q90ITVN1VOC2EF2=MECTX!QCPAPLL_ContentLibQCPAPLLQCPAPLL_SA_HomeQCPSA-AboutUsQCPSA-SustainabilityQCP==/#Z7_41E6IG82GG7M80I3L8U6DCPOR4 - https://panjiva.com/Carisma-Srl-Calzaturificio/3899822?q=footwear

FINAL PROJECT FASM 420 GLOBAL SOURCING | PROFESSOR DONALD LEVY CALLOWAY KANDT, ELIZABETH FUCCI, NICOLE NG