EXPORT MANAGEMENT

• Introduction to Export management
• Introduction to Tec packs and garment costings
• Logistics

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BY

Mrs. Navneeta

Introduction to Export Management

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Export? Import?

• Export involves selling of good and services from the domestic country to a foreign country. Whereas Import refers to purchase of foreign products and bringing into one's home country.

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• For eg. India import oil from gulf countries and export IT services to western world.

Advantages of Export – Import�

• Global Markets can be captured so that country will earn foreign exchange.
• Exports Generate huge Employment opportunities.
• Economy of Country will be developed.
• As no Country can self sustain by itself Exports and Imports are Necessary for their functioning and growth.
• Import can help Countries to access best technologies available and best products and services in the world.
• Cheap resourcing of products can be possible through Imports by globally Procurement goods and services.
• Imports can improve countries Standard of living of people of that country.

Disadvantages of Export – Import�

• Exporting Depleting resources like crude oil , minerals , ores Countries will lose valuable resources which can never be replenished.
• Export products are subject to quality standards any bad quality products which are exported will result in Country reputation and remarks on countries.
• Low Value Addition Exports will be earning less Foreign exchange
• Foreign Goods are substituting domestic goods so domestic manufactures may lose their business and this may cause to total collapse of local industry.
• Foreign exchange loss to country by importing goods .
• Import will discourage local manufacturing and inflation may cause .
• unemployment may increase .

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Roles and Responsibilities of Export Manager

• Administer all export of goods and ensure compliance to all organizational policies and procedures and monitor all financial and currency processes and transactions and manage all communication with export authorities for all required countries.

Roles and Responsibilities of Export Manager

• Administer all export of goods 
• Ensure compliance 
• Monitor all financial and currency processes 
• Manage transactions
• Manage all communication with export authorities
• Design and implement all export strategies
•  Prepare all export documents
• Schedule efficient shipping activities 

Export Management as a career option

• Marketing, documentation, shipping and packaging departments of global business entities including MNCs and other international trading houses. Lastly, an export executive can always take up self employment and start his own export venture. Many Indian export executives have written their own success stories in India and abroad.

Top exporter Countries

Apparel Industry : India

• Indian apparel industry contributes to 14% of industrial production, 4% to GDP, 17% to export industry.
• Providing employment to 35 Million people, and indirect to 47 Million people.
• Total estimation in USD is 55 Billion with 64% domestic consumption
• India is ranked as 5th largest exporter of RMG in the world. Source

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Indian apparel exports..

Export markets for India and manufacturing hubs

Introduction to

Tech packs

and

Garment Costings

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Techpacks

• A tech pack is an informative sheet that designers create to communicate with a manufacturer all the necessary components needed to construct a product. Typically designers will include measurements, materials, colors, trim, hardware, grading, labels, tags, etc.

Significance of Techpacks

• Reduces mistakes
• Improves relationships
• Controls costs
• Reduces lead times and delays

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Parts of Techpacks

• Measurement sheet
• Garment technical design or flat sketch
• Fabric specification
• Colour specification
• Trim specification
• Embroidery design scan or sample
• Embroidery placement
• Seam and stitch specification and placement
• Point of measurement
• Testing methods
• Graphic specification
• Graphic placement
• Colour combo
• Style no.
• Other technical data related to garment construction

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• Sample of the garment developed by buyer for reference (depends upon buyer)
• Scan copy of the printed fabric
• Trim sample (depends upon buyer)
• Hard pattern
• Soft copy of pattern

Techpacks

• PDF in folders
• Buyer’s Techpacks
• Q/A

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Costing

• It is defined as the amount of expenditure (actual or notional) incurred on or attributable to a product or to ascertain the cost of a product.¹

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•  It is the process for estimating the total resource investment required to merchandise, produce, and market a product.²

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• ¹ N.K Prasad. Principles and Practice of Cost Accounting, Book Syndicate Private Limited, 1988 (8^th Edition), p.4.
• ² Ruth.E. Glock and I.Kunz Grace, Apparel Manufacturing: Sewn Product Analysis, New Jersey, Prentice-Hall Inc., 1995, p. 286-291.

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Pricing Formula

• Cost of goods + markup=wholesale selling price
• Cost of goods=RM cost+ Direct Labour+ O/H+ Profit
• CMT
• LDP
• Mark-up (gross margin)=marketing and selling costs+ PD costs+ distribution costs+ general and admin expenses
• Wholesale selling pricing=price the manufacturer charges retailer for each garment

Costing

• Choose ANY product and estimate (assuming that someone has to manufacture it)
• Cost
• price
• Material required to make it
• process flow of manufacturing
• Compare cost, wholesale price and MRP

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Exercise for costing

Activity Cond.

What are the resources in a clothing manufacturing business?

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Costing Sop in folder..

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Logistics

Logistics

• Logistics involves the movement of products from point of origin to point of consumption.
• A product produced at one point has very little value to the prospective customer unless it is moved to the point where it will be consumed.
• Transportation achieves this movement.

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Factors Influencing Transportation Costs/Pricing

• Product- Related Factors
• Density- weight to volume ration
• Stowability- degree to which product can fill the available space
• Handling- Ease or difficulty of handling
• Liability- Products those are easily damaged, those that are subject to higher rates of theft or pilferage cost more transportation.

Factors Influencing Transportation Costs/Pricing

• Market Related Factors-
• Degree of intramode and intermode competition
• Location of markets
• Nature and extent of government regulation and transportation carriers
• Balance or imbalance of freight traffic in territory
• Seasonality of product movement
• Domestic or International Transportation

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Transportation Service Characteristics

• The most important transportation service characteristics affecting customer service levels are
• Dependability (Consistency of service)
• Time in transit
• Market Coverage
• Flexibility ( w.r.t. the variety of products that can be handled and meeting special needs of shippers)
• Loss and damage performance
• Ability of the carrier to provide more that just basic transportation service

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Transportation Modes

5 Transportation Modes

• Motor
• Rail
• Air
• Water
• Pipeline

Motor

• Motor carriage is the most widely used mode
• Motor carriers dominate for LTL shipments
• The average length of haul for motor carriers is approx. 500 miles
• Motor carriers offer flexibility and versatility
• General Freight and specialty carriers

Motor

• Benefits/ Advantages:
• – Door-to-door service
• – Flexibility
• – Reliability
• – Can reach remote locations
• – Speed
• • Challenges:
• • Multi point octroi
• • Multi point police checks
• • Unauthorized local levy
• • Poor conditions of road
• • Mostly unorganized

• National Highways=96,260 (approx. as of 2015)
• • State highway= 1,80,000 (approx)
• • Operating cost of truck=Rs. 25-30 per KM
• (approx)

Rail

• Rail transport cost less than air and motor carriage
• Rail transport lacks the versatility and flexibility of motor carriers due to fixed tracks
• Railroads have an average length of haul of approximately 688 miles.
• Has its fixed schedule
• Trailer-on-flatcar(TOFC) and Container-on-flatcar(COFC)

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Railways

• Good for Larger loads, long distance transportation.
• • Transport all types of goods-mostly the bulk items like Coal,
• Iron ore, Cement, Fertilizers, Petroleum, Heavy Machineries,
• Raw materials, Finished products, live cattle etc.
• • High fixed cost due to infrastructure of railway tracks etc
• • Variable cost reduces as compared to other modes
• • Slow speed due to consolidation of wagons
• • Monopoly Carrier
• • Route / service limitations can be over come by multimodal
• transportation.

• No of stations= (around) 7,112
• • Rail Network= (around) 115,000 KM(Track), 65,808 KM (Route)
• Broad gauge (1,676 mm (5 ft 6 in)) lines= 105,000 Km
• Meter Gauge (1,000 mm
• Standard Gauge (1,435 mm)
• Narrow Gauge (762 mm)
• No of Wagons=2,39,281 (approx.)

Air

• Smaller Segment compared to others
• High cost of air freight
• Air provides fast time-in-transit
• Dedicated air cargo carriers and also in passenger aircrafts

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Airways

• Fastest and less hazardous.
• • Fixed cost is little low than other
• • High variable cost due to fuel, maintenance, labour
• USED FOR
•  lightweight, high value and highly perishable items.
•  urgent delivery
•  critical maintenance
•  passenger, cargo etc
• Disadvantage
• Overall HIGH COST
• WEATHER DISTURBANCE
• Limited routs

Water

• Best suited for high bulk, low value commodities
• Containerized shipments
• VLCCs ( Very large crude carriers)
• Four Forms-
• Inland waterways (rivers/canals)
• Lakes
• Coastal and intercostal ocean
• International deep sea

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Pipeline

• Able to transport only a limited number of products, including natural gas, crude oil, petroleum products, water, chemicals, and slurry products
• Offers high service levels at low cost
• Flows of products are monitored and controlled by computer
• Climatic conditions have minimal effects
• Not labor intensive

Comparison of Domestic Transportation Modes- Economic Characteristics

Comparison of Domestic Transportation Modes- Service Characteristics

TRANSPORTATION TERMS

• • Consignment (GOODS SHIPPED)
• • Transportation mode (Form)
• • Container (large box)
• • Rights-of-way (legally permitted routes)
• • Consignor (sender of goods shipment, seller)
• • Consignee (receiver of goods shipment, buyer)
• • Carrier (services of transporting goods)
• • Public carrier (services to general public at non discriminatory pricing)
• • Private carrier (services to own organisation)

• FRIGHT FORWARDERS (CONSOLIDATE SMALL SHIPMENTS INTO LARGE ONES– FORWARD TO COMMON DESTINATION)
• • BILL OF LADING ( DOCUMENT REPRESENTING CONTRACT BETWEEN BUYER & SELLER, GIVES DETAILS TO SHIPER,RECEIPT OF GOODS & CONFERS RESPONSIBILITY TO CARRIER FOR TRANSRORTATION BY LEGAL TRANSFER OF OWNRSHIP)
• • FREIGHT BILL (INVOICE OF THE CARRIER, MAY BE PREPAID OR ON TIME OF DELIVERY)

MODES OF TRANSPORTATION

• MULTIMODAL OR INTERMODAL:
• • COMBINING OF 2 OR MORE MODES OF TRANSPORTATION
• • SERVICES LINKING 2 NODAL LOCATIONS
• • REASONS: LIMITED ACCESSIBILITY OF RAIL, WATER, PIPELINE & AIR MODES
• • Eg. COMBINATION OF RAIL & ROAD MAY PROVIDE THE LONG DISTANCE
• ECONOMY OF RAIL & HIGH ACCESSIBILITY OF ROAD TOGATHER
• • Eg. RAIL-WATER COMBINATION COULD YIELD THE SPEED & LOWER COST
• • DISADVANTAGE : TRANSFER OF CARGO FROM ONE MODE TO ANOTHER
• BUT COULD BE SOLVED BY USE OF CONTAINERS

Piggyback TOFC

• Piggy Back :
• Piggyback transportation refers to
• the transportation of goods where
• one transportation unit is carried on
• the back of something else.
• Trailer-on-Flatcar (TOFC)
• “Piggybacking” :
• The goods are packed in trailers and
• hauled by tractors to the railway
• station. At the station, the trailers are
• moved onto railway flat cars and the
• transport tractors, which stay behind,
• be then disconnected. At destination,
• tractors again haul the trailers to the
• warehouses of the consignee.

COFC

• COFC (Container-On-Flatcar): This type of piggybacking facilitates multiple containers to be transported on a flat cars.

Roadtrailers

• Roadrailers: (For bi-modal transportation) – These are specially designed trailers which can run on road as well as on rails.

• Fishy Back: It is a combination of road and water transport. Fishy back/ train ship/ containership are examples of the oldest mode of the intermodal transport. They utilize waterways, which are one of the least expensive methods for line- haul movement. The fishy back, concepts load a truck trailer, railcar, or container on to ship for transportation.
• Birdy Back: It is a combination of road and airways and is generally used in International shipments Air- truck movements usually provide service and flexibility comparable to straight motor freight.
• Land Bridge (TranShip): A variant of this intermodal option is the “LAND BRIDGE” concept, which moves containers by a combination of sea and rail. The land bridge concept is based on the benefit of ocean and rail combination that utilize a single tariff, which is lower than the total cost of the separate rates. The-goods can be transported by water transferring the shipment to surface transport and again finish destination will be placed on a rail car and transported to Chennai from where it will again be loaded on a vessel for transferring to say port Blaire.

ROLL-ON ROLL-OFF (RO-RO)

• RORO means Roll-on/roll-off, where loaded trucks are directly carried by railway wagons to their destination. Ships also act as a ferry for loaded trucks. The trucks Drives onto the ship, the ship sails to the destination Port, and the trucks drives off the ship to deliver the goods.

Containerization

• Containerization is a system of intermodal freight transport using intermodal containers (also called shipping containers and ISOcontainers) made of weathering steel. The containers have standardized dimensions. They can be loaded and unloaded, stacked, transported efficiently over long distances, and transferred from one mode of transport to another—container ships, rail transport flatcars, and semi-trailer trucks—without being opened.

Container Dimension:

• – Length : 20Ft, 40Ft, 45 Ft
• – Width : 8Ft
• – Height: 8.6 Ft & 9.6Ft
• – TEU (Twenty-foot Equivalent Unit):
• – It is a standard unit for describing a ship's cargo
• carrying capacity, or a shipping terminal's cargo
• handling capacity. A standard twenty-foot
• (20x8x8.6 feet) container equals One TEU.

Benefits of containerization

• 1. Secure the goods from damages like breakage & pilferage during transportation
• 2. Ease of Handling
• 3. Lessen transit time due to fast loading, unloading,
• checking etc.
• 4. Less documentation
• 5. Less Insurance cost due to low risk of loss.
• 6. Improve overall efficiency in operation.
• 7. It reduces overall transportation costs.
• 8. Least requirement of protective packaging.

Types of containers

• General purpose containers
• • Tank Containers
• • Refrigerated containers
• • High Cube containers
• • Ventilated Containers
• • Open-Top containers
• • Hard-Top containers
• • Flat containers
• • Platform containers