Yarn Supplier Selection Guide – Principles And Steps For Selecting Yarn Suppliers

Yarn supplier management has always been an important issue in the procurement of textile enterprises. This paper discusses in detail the principles and steps of selecting yarn suppliers, and the process and standards for selecting yarn suppliers.

The development and management of yarn suppliers is the core of the entire yarn procurement system, and its performance is also related to the performance of the entire yarn procurement department. Generally speaking, yarn supplier development includes yarn supply market competition analysis, search for potential yarn suppliers, evaluation of potential yarn suppliers, inquiry and quotation, negotiation of contract terms, and final yarn supply business choice.

In most multinational textile companies, the basic principle developed by yarn suppliers is the principle of “quality, cost, delivery and service”.

Among the four, the quality factor is the most important. First, it is necessary to confirm whether the yarn supplier has established a stable and effective quality assurance system, and then confirm whether the yarn supplier has the equipment and technology to produce the specific yarn products required ability. The second is cost and price. It is necessary to use the method of value engineering to analyze the cost of the yarn products involved, and to achieve cost savings through win-win price negotiation. In terms of delivery, it is necessary to determine whether the yarn supplier has sufficient production capacity, whether human resources are sufficient, and whether there is any potential to expand yarn production capacity. Last but not least is the record of the yarn supplier’s pre-sale and after-sale service.

Yarn supply market competition analysis

In the process of yarn supplier development, it is first necessary to conduct a competitive analysis on the market of a specific yarn type, to understand who is the market leader of this type of yarn, what is the current market development trend, and the major yarn suppliers What is the positioning of the supplier in the market, so as to have a general understanding of potential yarn suppliers.

For example, in the sweater market, if you need to purchase dyed yarn for making sweaters today, you don’t need to go to those big American factories, because the US has strict environmental protection measures, and the cost of yarn dyeing is very high for them. At the same time, you can also make a suggestion to your colleagues in the design department, try to use the mainstream core spun yarn in the market instead of wool yarn to reduce the cost.

The core-spun yarn market is a less differentiated market, with many suppliers, easy to transport and easy to substitute. In the nylon yarn market, it is more complicated. First of all, nylon yarn products vary widely. Some companies specialize in high Denier industrial nylon yarns; others focus on the daily clothing industry, producing high-elastic nylon yarns. And because the R&D cost of industrial nylon yarn is high, localization is essential. You have to assess whether the supply capacity of industrial nylon yarn in the local market is oversupplied or in short supply, and the characteristics of major nylon yarn suppliers and their competitors Wait until you are prepared.

On the basis of these analyses, the company’s purchasing department can build a preliminary yarn supplier database and make corresponding yarn product classifications. Generally speaking, it is divided into two categories: main material and auxiliary material. The main materials can be further divided into core-spun yarn, blended yarn, etc.; the auxiliary materials can be further divided into nylon yarn, covered yarn, sewing thread, etc.

Find potential suppliers

The next step is to find potential yarn suppliers. After careful analysis of the market, you can get the contact information of yarn suppliers through various public information and open channels. These channels include active inquiries and introductions of yarn suppliers, professional media advertisements, Internet searches, etc.

In this step, the most important thing is to make a preliminary screening of yarn suppliers. It is recommended to use a standardized supplier profile to manage the information provided by yarn suppliers. The information should include: Yarn supplier’s registered place, registered capital, main shareholder structure, production site, equipment, personnel, main products, main customers, production capacity, etc. By analyzing this information, it is possible to evaluate its process capability, stability of supply, reliability of resources, and its comprehensive competitiveness. Among these yarn suppliers, after eliminating the suppliers that are obviously not suitable for further cooperation, a yarn supplier inspection list can be drawn.

Assessment of Potential Yarn Suppliers

Next, it is crucial to arrange a site visit to the yarn supplier. When necessary, the quality department and process engineers can be invited to participate in the audit team. They will not only bring professional knowledge and experience in yarn, but also the experience of joint audit will help the communication and coordination within the textile company.

During the on-site inspection, a unified scorecard should be used for evaluation, and the management system should be reviewed with emphasis, such as work instructions and other documents, quality records, etc. The more important items are:

• Sales contract review, which requires the sales department to evaluate each contract and confirm whether it can be completed on time.
• Supplier management requires the establishment of a list of approved suppliers and effective control procedures.
• Training management, there is a complete training and assessment system for key positions and detailed records.
• Equipment management, maintenance and adjustment of equipment, a sound control system, and complete records.

For measurement management, it is very important to have a complete delivery system for the measurement of instruments.

During the inspection, communicate with the team members in time. At the end of the meeting, summarize the advantages and disadvantages of the yarn supplier, and listen to the explanation of the yarn supplier. If the yarn supplier has the intention to improve, the yarn supplier can be required to provide a report on improvement measures for further evaluation.

Inquiries and quotations

After the yarn supplier audit is completed, an inquiry document is issued to the qualified yarn supplier, generally including specifications, samples, quantity, approximate procurement cycle, required delivery date and other details, and the yarn supplier is required to be within the specified date. Complete the offer. After receiving the quotation, it is necessary to analyze its terms carefully, to clarify the questions thoroughly, and to record it in writing, including fax, e-mail, etc.

The follow-up work is quotation analysis. The quotation contains a lot of information. If possible, ask the yarn supplier to make a cost list quotation, ask it to list the material cost, labor, management expenses, etc., and express the profit margin. Compare quotes from different yarn suppliers and you’ll have an initial idea of their justification.

Negotiation of contract terms

Before the price negotiation, be sure to be fully prepared and set a reasonable target price. For small batches of yarn products, the core of the negotiation is the delivery time, and it is required to provide the ability of rapid production; for the yarn products of assembly line and continuous production, the core is the price. But it must be ensured that the yarn supplier has a reasonable profit margin.

At the same time, price negotiation is an ongoing process, each yarn supplier has its corresponding learning curve, and its cost will continue to drop after a period of supply. Reach strategic alliances with outstanding yarn suppliers, and promote yarn suppliers to propose improvement plans to maximize cost savings.

Choice of final yarn supplier

In fact, every yarn supplier is an expert in the field of yarn and even in the field of textiles. Listening to the advice of yarn suppliers often has unexpected results. There have been yarn suppliers who took the initiative to recommend alternative raw materials, such as replacing wool with core-spun yarn, which can save up to 50% of the cost and fully meet the requirements. This is a price reduction that cannot be achieved simply by negotiation. Through strategic alliances and participation in design, yarn suppliers can effectively help us reduce costs.

Another very important aspect is the hidden cost. Purchasing cycle, inventory, transportation, etc. are all invisible costs. It is necessary to incorporate qualified yarn suppliers into the timely delivery system to minimize inventory and reduce the company’s total cost.