Build Your Business: Management

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May 7, 2018

Similar to order entry, your shop’s purchasing department also can impact the overall speed with which your business operates.

Let’s consider not only consumable supplies, but also garments and other items necessary to run a shop. Many businesses in this industry have different methods or people assigned to these tasks, but here, they will be grouped into one idea: purchasing.

There are two types of purchasing tasks. One is for general supplies, which involves the materials needed to run a shop. The other involves decisions that are associated with an order in the system

GENERAL SUPPLIES
1. Control. Have supplies on hand so they are in easy reach when needed. This includes everything from shirts, ink and thread to markers, tape, pens and paper. However, expenses for supplies are tied to your cash flow. Evaluate the history of items you constantly buy. Find and list the most commonly purchased items you use.
How do you know when something needs to be purchased? Do you have a system or is it based on verbal notification. Either way, how you control purchasing can directly affect your shop’s profitability. It pays to have a firm grasp of the process.

2. Organize. Your shop’s supplies should be organized in one location, where staff can find anything from a bucket of black ink to packing tape. Designate an area on a shelf for each item and set minimum levels for each product. Write the product name, SKU and supplier on a card and place it in front of the last item. When the card is visible, it’s time for the purchasing department to order the item.

3. Automation. One supplier, Ryonet, is making this task easier with its new Quick Order app. Shop owners or managers can create a shopping list and set ordering levels. Once the account is created, authorized staff members can place orders using their phones.

Other vendors, such as Uline, Grainger, GSG, Nazdar, Midwest Sign & Screen and others have easy ways to order and create checklists for commonly purchased supplies. And apparel distributors have account setups that enable you to purchase inventory. Depending on how much you buy, most offer free shipping if you meet the criteria.
Make sure to order exactly what you need. It can be difficult for some distributors to correct mistakes, so order carefully.

PURCHASING FOR ORDERS
This is a reactionary process. Most shops don’t keep much product in stock, instead relying on apparel distributors to supply the blanks needed for customers’ orders. For some, purchasing goes beyond apparel blanks. Jobs may need custom woven neck labels, hangtags, special packaging, or metallic ink or thread.
Production can’t advance these jobs into action until such items are available. If order entry is set up correctly, the ship date triggers the action for other departments’ tasks, including purchasing.

1. Comprehension. The purchasing department must understand your shop’s production schedule to make the correct decisions — not what to buy, but when it should arrive. There is nothing worse than having a rush order for an important client, but 30 shirts of a certain size are missing because they were on backorder or are coming from another warehouse.

The purchasing department must understand when a job should begin production to hit the intended shipping date. Delivery must be one business day before production starts.

The key to effective purchasing lies in understanding what happens when the product arrives. Let’s say those missing 30 shirts must be sourced from a warehouse that can ship them via ground freight in three days. What happens if they don’t arrive until a business day after the job is slated to start? Instead of only expediting the incoming delivery on the missing shirts, the shop now must expedite the entire finished order to meet the client’s delivery date.

This is called stepping over a dollar to save a dime, and it doesn’t work.

2. Information. Your shop’s purchasing agent should include tracking numbers for goods in the order’s notes. This way, its whereabouts easily can be tracked by anyone who needs to know. Other notes showing the quantity ordered, where shipping will originate and delivery date can save a lot of time for other shop personnel trying to make decisions for the order.

This idea isn’t limited to garments. Other items, such as hangtags, polybags, ink, thread or special packaging may be necessary to complete orders. Adding notes for these items helps your team schedule and deploy labor, and prioritize accordingly.

Also, ensure your purchasing department adds identifying details to the order, including the customer’s purchase-order number, name or another identifier if it is written on the vendor’s packing slip when the item arrives. This is a good standard practice in the receiving department, but it doesn’t work unless purchasing plays along.

3. Monster Orders. If your shop has ever been lucky enough to work on gigantic orders, the purchasing department also can help with a few things in that regard.
First, find out if the supplier is sending the inventory on skids or if it will be floor-loaded. Skids can be unloaded by a forklift in minutes, while floor-loaded inventory requires a team of employees to spend an afternoon unpacking and sorting boxes. You don’t want surprises here.

If possible, request a delivery appointment on the day the goods will arrive. Not only will this help with production planning, but you can ensure the correct labor is arranged if the inventory is floor-loaded.

4. Quality Control. Errors happen, the two most common of which are ordering the wrong color or entering quantities in the wrong fields. Though easily made, such errors must be controlled. Making these types of mistakes on critical or rush orders can result in a lost customer if the problem gets out of control.
One tried-and-true method of ensuring quality in the purchasing process is a simple checklist. If airplane pilots can do it before takeoff, your team can do it before clicking the order button.

GET FEEDBACK
A few times a year, schedule a short meeting with everyone that is influenced by your purchasing team. Which of their decisions or habits impact others in your shop? Don’t make this a finger-pointing exercise, but one of constructive criticism.

The only way your team can get better is to learn about challenges. What works? What are the opportunities for improvement? Who has an idea that could work?

Shops purchase thousands of products each year. That money should be spent in the best possible way. Get the opinions of the people who use the products, as well as those in the receiving department who check in the goods. Consider also getting customers’ opinions.

Many shop owners often don’t even know or realize why they use certain products. When asked, they simply say, “We’ve always done it this way.” This doesn’t mean it’s wrong, but is there a better way?

What or how the purchasing department makes decisions has a tremendous impact with your shop, so there should be stakeholder involvement in the process. That’s how speed increases.

Marshall Atkinson, owner of Atkinson Consulting LLC, is a decorated-apparel industry production and efficiency expert who focuses on operational efficiency, continuous improvement, workflow strategy, business planning and more. For more information or to comment on this article, email Marshall at marshall@marshallatkinson.com.