SOURCING ASSIGNMENT
Marks and Spencer’s limited collection features a number of different garments and materials, ranging from Turkey for Denim and Acrylics to Indonesia for embellished dresses their range also covers accessories, shoes and handbags. Therefore they are going to need several different countries to cover the sourcing of the entire of their range. So, for the Purpose of this report I am going to look at the countries Turkey, China and Romania as they were the most prominent among the supply base.
In the last 10 years Turkey has been steadily producing more and more clothing for the UK Highstreet. It is regarded as a great maker of Denim and currently owns a 21.8% share of the UK textile exports. The advantages of using a supplier based in Turkey include Short lead times, meaning repeat orders can be quickly processed should the demand for a particular product increase dramatically. Large Cotton supply, where other countries supplies of cotton are scares due to the 2010 Cotton Crisis, turkey produces around 900 000 tons of cotton annually placing themselves 6th in the world. This means that whilst other areas are still trying to recover from the effects Turkey found an increase in demand of work. Turkey is a first world country with lots of schooling and freedom, their workers are much less likely to be exploited than other countries in the middle east who are not as well developed. Also, the Turkish textile industry is known for good reputation for producing quality garments with excellent attention to detail, and as Marks and Spencer is expected to produce good quality long lasting garments it is in their favour to use a Turkish supplier for their clothing so they can produce the quality of garment their customer base anticipates. However, there are some disadvantages to using a Turkish supplier. Such as, communication barriers – negotiations may become difficult as different parties speak different languages, thus leading to a breakdown in communication which may lead to troubles with ordering and shipping. In this case working through an agent would be useful as they act as a go between you and the supplier. They also have a poor reputation for human rights and corruption M&S would have to take this into consideration before sourcing from a country whose ethical values may conflict with their own.

China has been at the forefront of the manufacturing industry for many years now. 1 in 6 of every garment imported into the UK comes from China. The advantages of using a supplier from China include; Reliability, China have a great history of manufacturing quality garments at low prices. Meaning you can reach a higher margin and therefore make more money. China have an ever growing economy so the risk of production being interrupted by political unrest is small unlike many repressed countries in the Middle East. They are very technically advanced and so can carry out more skilled manufacturing skills that may be required for some of M&S’s product. On the other hand the disadvantages include; time, the lead time for China is very long, with it taking an average of 25 days to ship products by sea to Great Britain alone. This means that should the need arise to reorder a product in time to meet a demand it will be difficult and delayed. In this case it is wise to contact a closer to supplier in Europe and approve samples from them so they are available with a suitable product if a reorder is needed urgently. Also, the time difference between China and the UK is particularly inconvenient meaning it may be difficult to contact a supplier and gain a quick response unlike European suppliers.

Romania has been steadily increasing its clothing manufacture business over the past 10 years. In 1998 it became the largest exporter of clothing in Eastern Europe and has become a real competitor in the clothing manufacturing market. Because of Romania’s geographical proximity it has a very short lead time and transportation time can be as little as 1 to 3 days for customers in the EU, at the same time labour cost are much lower than other Eastern European countries which is why Romania has been steadily overtaking previously thriving clothing industries such as Poland, Czech Republic and Hungary. Communication may be easier than places in the Middle and Far East because the time zones are more familiar. As well as all this manufacturers that were once based solely in countries such as Germany are expanding into Romania – so trusted and established manufacturers are setting up new factories in low labour cost areas. On the other hand the low labour costs could be due to exploitation of the workers, monitoring would have to be rigorous to ensure M&S can strike the right balance between meeting profit margins and ensuring fair working conditions and pay. Basic communication breakdowns could occur as both parties speak a different language and the workers are less skilled than countries who have been manufacturing for longer such as China.
PESTEL
Political- Turkey have a poor reputation for human rights, so much so that their attempts to join the European union have been denied. They also have strong religious links with the Middle East – who are currently in a state of political unrest. There connections may see riots spread to Turkey thus affecting production and importing and exporting to the country. Romania is currently facing accusations of corruption with the political infrastructure and has had major setbacks after the 2009 recession. It may be unwise to commit to large orders from this country if there is a risk production could be disrupted due to import and exports in and out of the country being blocked which has been seen happening in countries with corrupt governments such as Libya.
Economical - The Sterling to Lira exchange rate currently stands at 1GBP – 2.8679TRY. This is good as it has fluctuated a lot lower in the past. Sterling to Yeun stands 1GBP – 9.94199 CYN and finally Sterling to Leu is 1GBP – 5.08026RON. Because of the political unrest in the Middle East oil petrol prices have been increasing as it is becoming more uncertain of its attainability and exportation into the UK. As a result of this the price of manufacturing clothing has increased. M&S need to find ways to cut costs whilst maintaining the high standard of quality expected by our customer base. Furthermore the 2009 recession has increased the cost of living and consumers are spending less on luxury items, M&S will have to work to keep prices competitive and profit up. The UK is expected to experience a ‘double dip’ in early 2012 which may see the British Highstreet struggle. M&S need to prepare for this and keep prices to a minimum and quality at a maximum.
Social – As companies are becoming more aware of the exploitation of factory workers it is becoming our social responsibility to ensure that the factories M&S employ to make their clothing provide good working conditions and fair pay that reaches the minimum wage. Chinas factories have been experiencing strikes as the workers fight for an increase in pay and better working conditions, Whilst M&S would monitor the conditions and pay to assure that they are up to an acceptable standard we also have to take into account meeting profit margins and the assurance that their won’t be disruptions to our buying cycles. At the same time the low labour costs of Romania and Turkey will need monitoring to ensure the employees are receiving good working conditions and pay.
Technical – M&S are one of the most advanced retailers in more technical clothing. ‘Stormwear’, ‘climate control’ and ‘freshtech’ technologies have all been created my M&S technologists. These more advanced products would require a more skilled manufacturer. Most likely to be found in China where technology is advanced whilst Romania and Turkey will be given more simple products as they are less advanced.
Environmental – The importation of goods will no doubt create a carbon footprint as vehicles are used to transport from one destination to another. M&S Plan A sees to ‘reduce operational carbon footprint by 35%’ and to ‘send no operational and construction waste to landfill and reduce our operational waste by 25% and construction waste by 50%’. When sourcing in China M&S need to be conscious of what means on transport they are using so as to keep carbon emissions to an absolute minimum, travelling by boat is more environmentally friendly than by air. Sourcing from countries closer such as Turkey and Romania – which are both in Eastern Europe, would reduce carbon emissions as transport times are cut shorter. The 2010 Cotton Crisis on Pakistan saw freak floods destroy cotton production, this in turn increased its cost and M&S were one of many retailers that had to publically announce that their cotton based clothing would as a result increase in price. The Pakistani cotton industry in still in a state of recovery so it will still be a few years until prices regulate. In the meantime countries such as Turkey have benefited as a large supplier of the material.
Legislative – When sourcing in foreign countries we must assure that we abide by their laws, such as their minimum wages and rest policies. This can vary from province to province in some places such as China. We also need to abide my government set laws such as the limit imposed on exportation from China which will affect the buy amount as we cannot exceed this. Also the EU have strong importation and exportation regulations that M&S will have to abide by when sourcing in Romania.
I will be sourcing all my cotton and denim products from Turkey as they have the best reputation for producing good quality denim and have a large cotton supply. My polyester blend and silk products will be sourced from China as will all technological garments and finally the accessories and bags from Romania.
In conclusion I believe that the combination of the technical advances that can be used to create garments in China, combined with the short lead time of Turkey as well as their excellent reputation for cotton garments and denim and the low labour costs of Romania these three countries make up an excellent supply base and strike a good balance between lead times, specialities and labour costs