NIFT – TEA KNITWEAR FASHION INSTITUTE
Sayantani Hazra I Final year MBA (AB)
Demand Management of Knitwear Industry in Changing World
- A Special Focus on Fragile Market Trend
(With Reference to Koral International, Tirupur)
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 2
World Knitwear Market Size in US $ Bn.
Source: National Centre for Trade Information, New Delhi
World Knitwear Market Size in US $ bn
249.01267.11
237.5
0
50
100
150
200
250
300
2004 2005 2006 (e)
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 3
Top Knit Apparel Exporting Countries of the World in the year 2005 - 06
Source: Apparel Export Promotion Council, India
ExportersValues exported in 2004 (US$ bn)
Values exported in 2005 (US$ bn)
Annual growth in 2004 - 05 (%)
Share in World exports (%)
World 117.36 124.79 6.33 100.00
China 25.80 30.87 19.65 24.74
Hong Kong 12.20 13.32 9.18 10.67
Italy 6.83 6.71 -1.76 5.38
Turkey 6.26 6.35 1.44 5.09
Germany 4.44 4.44 0.00 3.56
Bangladesh 2.39 3.48 45.61 2.79
India 2.47 3.20 29.55 2.56
France 3.03 3.19 5.28 2.56
Belgium 2.39 2.69 12.55 2.16
USA 2.70 2.58 -4.44 2.07
Top 10 Total 68.51 76.83 12.14 61.57
Top Knit Apparel Exporting Countries of the World in the year 2005 - 06
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 4
Top Knit Apparel Importing Countries of the World in the year 2005 - 06
Source: Apparel Export Promotion Council, India
ImportersValues imported in 2004 (US$ bn)
Values imported in 2005 (US$ bn)
Annual growth in 2004 - 05 (%)
Share in World Imports (%)
World 120.14 124.22 3.40 100.00
USA 33.04 33.29 0.76 26.80
Germany 10.68 10.40 -2.62 8.37
Japan 9.19 9.79 6.53 7.88
UK 8.83 9.26 4.87 7.45
Hong Kong 8.81 9.24 4.88 7.44
France 7.11 7.59 6.75 6.11
Italy 4.79 5.15 7.52 4.15
Belgium 2.99 3.26 9.03 2.62
Spain 3.58 2.76 -22.91 2.22
Netherlands 2.69 2.50 -7.06 2.01
Top 10 Total 91.71 93.24 1.67 75.06
Top Knit Apparel Importing Countries of the World in the year 2005 - 06
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 5
Indian Exports of Knit Apparel
Source: Apparel Export Promotion Council, India
2004 2005
World 2641.3 3191.1 20.82% -
USA 589.5 937.3 58.99% 29.37%
Germany 256.8 369.7 43.97% 11.58%
UK 277.4 329.2 18.68% 10.32%
France 211.1 256.4 21.45% 8.04%
Italy 144.9 176.5 21.78% 5.53%
UAE 226.3 160.4 -29.14% 5.03%
Canada 150.9 139.8 -7.40% 4.38%
Netherland 102.4 122.7 19.88% 3.85%
Spain 72.2 119.3 65.15% 3.74%
Denmark 42.6 67.8 59.14% 2.12%
Total for top 10 2074.1 2678.9 29.16% 83.95%
Annual growth in 2004 - 05
Exports Value in US$ Mn Share in India's Exports Knit Apparel
2005
Indian Exports of Knit Apparel
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 6
USA's Knit Apparel Imports in US$ Mn.
Source: Department of Commerce, USA
USA's Knit Apparel Imports in US$ Mn
33040 3329035528
240963005118
626 937 11630
10000
20000
30000
40000
2004 2005 2006
World China India
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 7
Tirupur Knitwear Exports by Volume
Source: www.fibre2fashion.com/industry-article
Tirupur Knitwear Exports by Volume
0
150
300
450
600
750
Qu
antit
y in
Mill
ion
pie
ces
-20
-10
0
10
20
30
40
50
Pe
rcen
tage
Quantity 257 294 339 368 410 372 345 370 391 527 733
Growth 14 15 9 12 -9 -7 7 6 35 39
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (e)
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 8
Tirupur Knitwear Exports by Value
Source: www.fibre2fashion.com/industry-article
Tirupur Knitwear Exports by Value
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Va
lue
in M
illio
n U
S$
-10
0
10
20
30
40
50
Pe
rce
nta
ge
Value 544 604 617 690 762 719 667 794 919 1,260 1,831
Growth 11 2 12 10 -6 -7 19 16 37 45
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (e)
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 9
The Demand Management Process
Monitoring demand
Identifying and analysing demand variance
Managing demand variance
Managing demand risk
• Understand the customer taste and lifestyle
• Identifying variance (e.g., rapid growth rates or relative differences)
• Identifying root causes of variance
• Managing demand through – Best Customer
Experience – Partnering/Virtu
al Integration
• Annual supply/demand Gap Analysis
• Development of alternatives
• Consistent garments quality
• Product development
• Latest Fashion
• Demand/Supply collaboration with suppliers
• Right product to the right consumers
• Tailored to meet specific needs of the customer
• Demand uncertainties – the predictability of the demand for a product
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 10
Scope of the study
Worldwide demand for knitwear products is growing vastly. In 2006, China retains the leader position in clothing export followed by Hong Kong, Italy, Turkey. India holding seventh position.
Apart from the demography analysis and market trend, now a day apparel market mostly depending on the mood, behaviour and buying habits of the consumer.
People likes knitwear garment much as casual dress according to their range of styles, colours and mood
Fashion in garment industry as usual playing a fragile role. Uncertainty of demand for knitwear product variety is still on the higher side
Mass customisation and digital printing for meeting unpredictable demand levels, for luxury goods, uncertain customer wants and for heterogeneous demand.
USA, EU (25), and Canada all together constitute approx 74% share in world exports of knitted garments from India.
Knitwear industry in Tirupur are not utilising the full capacity because of flexi demand
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 11
Objectives
In knitting industry demand management is highly required for smooth and steady business.
Demographic analysis is not enough to forecasting the demand. Psycho graphic influences also need to analysis.
High innovation and fashion content are the main aspects of demand creations.
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 12
Analysis: Current Knit Apparel Business Trends
Global
Market
Continuous
advances in
IT
Increasing
outsourcing
Short
product life
cycle
Expanding
product
variety
CURRENT
BUSINESS TRENDS
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 13
Analysis: Company’s Operating Model
Inventory
Customer Plan
Product Due Date
Confirmed Orders
Finished Product
Shipping Orders
Order Management
Customer Expectations
Production Unit
Capable to
Promise
Transportation Planning
Available to
promise
Demand Plan
Supply Planning
New Product Development
Merchandizing & Selling
Promotion
Demand Planning
Plan
Outside Supply
Strategic, Marketing,
& Operations Planning
Raw Material
Exporting
Demand Plan
Customer
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 14
Analysis: Import Order Placement Type
Placement of new orders
Direct82%
Indirect18%
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 15
Analysis: The Initiatives Company Take to Increase the Orders
Company’s initiatives to increase the import
orders
Trade shows15%
Others8%
Association's member
10%
Sales promotion
32%
Advertisement35%
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 16
Analysis: Demand Type and Production
Knit apparel demand classification
Fixed22%
Variable78%
Production Size Estimations
Weekly4%
Fortnightly12%
Monthly23%
Seasonally61%
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 17
Analysis: Time Require to Execute a Standard Order
1.23%4.08%
22.54%
72.15%
0.00%
20.00%
40.00%
60.00%
80.00%
One week Two weeks One month > Month
Time require to execute a standard order
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 18
Analysis: Measurement to Quantify the Demand
Demand measurements
73%
16%
8%3%
Qualitative Methods Time Series Projection Methods
Causal Methods Others
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 19
Analysis: Managing Supply with Respect to Variable Demand
Payment
Analysis
Resources
Productivity
Analysis
Inventory
Optimisation
Modelling
Procurement
Risk
Modelling
Spending
Category
Supplier
Performance
Analysis
Supply
Management
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 20
Analysis: Same Order Repetition and New Order Rejection Rate
Import order repetition in a year
13.08%
59.65%
4.93%
22.34%
0.00%
20.00%
40.00%
60.00%
80.00%
5 times 10 times 20 times Not at all
81.42%
14.38%4.20% 0.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
0-10% 10-20% 20-30% >30%
New order rejection rate in a year
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 21
Analysis: Factors Influencing Purchase
Factor considering while purchasing Knit Apparel
Price39%
Quality25%
Durability3%
Outlook5%
Comfort6%Style
12%Brand10%
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 22
Analysis: Level of Satisfaction
Satisfaction level (Knit Apparel)
Extremely Satisfied
69%
So-So21%
Extremely Dissatisfied
10%
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 23
Analysis: Attributes Consider Most while Placing the Imports Orders
Attributes consider most for the imports orders
8%
37% 39%
7% 7%
2%
0%
10%
20%
30%
40%
50%
Age group and lifestyle ofconsumers - 8%
P rice range - 37%
Consistent quality offabrics/garments - 39%
P roduct developmentcapabilities - 7%
Compliance with codes ofconduct - 7%
Other - 2%
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 24
Findings & Recommendations
Manufactures to maintain a good knowledge base on fashion markets and interpret the fashion market as well.
The price and the consistent quality are the high criterion for selection of a knit garment.
Tirupur knit industry is expected that efficiency in production process and high productivity would affect the price and quality as well which help them to compete head-on with the biggest low cost suppliers from other developing counties.
Low repetition rate is not the cause of concern for import orders unless and until knit company has good product development capability.
Demand uncertainty or risk is pretty high in knit apparel business.
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 25
Scope of Improvement
The survey focused mainly on the demand and marketing aspect and not on sales. In depth survey of the distribution channel also needs to be conducted to know the preferences of the buyers well.
The impact of demand variability on pricing and inventory replenishment decisions is not touched.
A measurement requires to identify the effective supply chain strategy in knit industry.
The possibility of any kind of alteration in the product or the product line has been totally eliminated in this project.
The possibility of the new product in the global market has also been neglected. The new product development frequency also needs to be studied.
A cost benefit analysis based on this survey may be designed to know the feasibility of the various promotional strategies.
NIFT – TEA KNITWEAR FASHION INSTITUTE
Demand Management of Knitwear Industry in Changing World Sayantani Hazra I Final year MBA (AB) 26
NE Q?
Thank you all