demand management of knitwear industry in changing world

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)


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)



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



Top Knit Apparel Importing Countries of the World in the year 2005 - 06


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



Indian Exports of Knit Apparel


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



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



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)



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)



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



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



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.



Analysis: Current Knit Apparel Business Trends

Global

Market

Continuous

advances in

IT

Increasing

outsourcing

Short

product life

cycle

Expanding

product

variety

CURRENT

BUSINESS TRENDS



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



Analysis: Import Order Placement Type

Placement of new orders

Direct82%

Indirect18%



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%



Analysis: Demand Type and Production

Knit apparel demand classification

Fixed22%

Variable78%

Production Size Estimations

Weekly4%

Fortnightly12%

Monthly23%

Seasonally61%



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



Analysis: Measurement to Quantify the Demand

Demand measurements

73%

16%

8%3%

Qualitative Methods Time Series Projection Methods

Causal Methods Others



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



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



Analysis: Factors Influencing Purchase

Factor considering while purchasing Knit Apparel

Price39%

Quality25%

Durability3%

Outlook5%

Comfort6%Style

12%Brand10%



Analysis: Level of Satisfaction

Satisfaction level (Knit Apparel)

Extremely Satisfied

69%

So-So21%

Extremely Dissatisfied

10%



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%



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.



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.



NE Q?

Thank you all

demand management of knitwear industry in changing world

Business

knitwear garment

knitwear products

demand risk

uncertainty of demand

heterogeneous demand

flexi demand

knitwear product variety

demand plan customer