SOURCING AND PURCHASING
Refers to the activities carried out to identify potential suppliers, carry out negotiations, place orders and monitor deliveries.
Sourcing and purchasing
LILIANE LÉOPOLD-ROYER, PURCHASING AND SOURCING DIRECTOR, JUNIOR AND FASHION DIVISION - MANAGING DIRECTOR, ROYER INDIA
To offer the consumer a product that totally meets his expectations and is available when he needs it, you have to have set up a highly efficient sourcing system upstream.
The 4 secrets behind good sourcing
Working out the production parameters
When you’re having a new model made, the sourcing phase is essential. Since 1981, the Royer Group has maintained close control over this key phase through its extensive knowledge of the markets. First of all, you have to work out the volumes in relation to the final consumer price you’re looking for. Two totally indissociable components. You also have to consider exchange rates (for the non-Euro zones), customs duties (for zones outside Europe) and the price of raw materials, which will inevitably affect the consumer price. You then have to build in the type of construction and quality you expect in order to refine your choice of partner country. Then comes the choice of supplier, based on factory production capacity. The Royer Group can then rely on the relationships it has built up over the years with respect for the country’s codes and culture.
Knowing the specialisations in the production countries
Each country has its own know-how, often linked to its history. Due to the presence of tanneries over many centuries, India specialises in leather. Vietnam has considerable expertise in vulcanised canvas and Bangladesh relies on its jute crop to produce its espadrilles, while Indonesia specialises in children’s models. In Europe, we choose Portugal for men’s and women’s casual shoes, while Spain is recognised for its "city“ models with leather soles and, of course, espadrilles. Italy remains the absolute "must“ for elegance.
Basing your choices on human relations
The best selection criterion involves meeting the supplier, without any preconceived ideas.
We need to visit the factory and check the production conditions, as ethics is one of the Royer Group’s key values. At a time when CSR (Corporate Social Responsibility) has become an essential rite of passage for companies, the ROYER Group already had a CSR policy when it acquired Kickers in 2008 and joined the B.S.C.I (Business Social Compliance Initiative)*. Through this, it is committed to complying with the principles laid down in the Universal Declaration of Human Rights, the International Convention relating to Children’s Rights and those laid down in the International Labour Convention. Some factories already comply with the BSCI code of conduct and are even at a higher level, i.e. SA 8000.
We need to look at the workstations, touch the products, etc. These are all elements that will tips the scales one way or the other. We also need to establish reciprocal trusting relations with our suppliers and help them add to their expertise.
Being on the lookout and anticipating macroeconomic changes.
To be reactive in the face of the Group’s strategic issues and changing customer expectations, prospecting, attendance at major trade fairs and monitoring are essential in ensuring that we work with the best suppliers for each brand. This involves a great deal of travel, which, along with the work of our local directors, allows the Royer Group to remain attentive to opportunities. In addition, we need to build in the economic parameters in the producer countries, such as variations in exchange rates and customs duties, labour and raw material costs, in order to offer the right product at the best price at the end of the line.