The year under review saw TFG Apparel Supply Company (TFGA) restructure its business into a more focused design and production unit in line with the changing needs and requirements of the retail trading divisions. TFGA continues to be the procurement partner for Foschini, Markham, Exact! and to a lesser extent our sports division, supplying them with exclusive, in-house designed brands. TFGA now has a staff complement of over 250 employees across five design and manufacturing units. TFGA continues its role in co-ordinating the Group Sourcing, Group Shipping and Group Quality Assurance departments.
TFGA has sustained its presence in the local CMT manufacturing industry and continues the forward development of the local supply base. There is continued commitment to develop these relationships in conjunction with the local textile, outwork and trims industries.
With the introduction of the quota system, which applies to certain categories of ready-made garments imported from China, we continue to build our capacity locally to ensure a regular flow of merchandise to our trading divisions.
Asked to comment on the quota system and the five-year agreement with the unions (to source product in SA), Selwyn Eagle, MD of the manufacturing and sourcing arm of Foschini, says: “What we’ve said is that there’s a two-year plan in place at present and we won’t do something for two years and then just go back to what we were doing before. The process will continue for longer than the quotas are in place.”
Eagle says the issue isn’t just about rigidly enforcing an agreement over the next five years. It’s about establishing relationships within the supply chain.
“We have to teach our suppliers how to deal with us better. An example for us is the sourcing of yarn and fabric locally, which we see as strategic. We’re comfortable we’re going about this the right way, but that doesn’t mean it won’t be an uphill battle.”
Eagle says those who have given commitments to increase sourcing in will meet regularly to give feedback, so the process will monitored.
Concerning the quota plan, Eagle says: “Government has put something in place and you have to react to it. We’ve decided to make it work and we have a good relationship with government and the unions. We have to keep jobs.”
However, he says that the quotas haven’t affected Foschini’s business drastically. “We’ve always dealt very strongly in the SA market.” He’s sceptical about claims that prices will rise sharply as a result of the quotas.
Source: FinWeek (17 May 2007)
Our sourcing department remains focused on procuring our group’s needs and we have maintained our strong partnerships with our various buying offices off-shore.
The group shipping department is run effectively and over the past year the group has benefited from the consolidation of cargo from the various ports we use globally. This area is an integral part of the group, as it is also responsible for foreign currency purchases and payments to all our import suppliers.
The group quality assurance department is active in each of the group’s apparel trading divisions, as well as homeware and furniture. Performance standards are continually reviewed to ensure merchandise is of a world-class standard. There is close co-operation with the group’s suppliers, to assist in the adoption of world-class manufacturing practices. Group Quality Assurance provides suppliers with the use of our in-house textile testing laboratory, which is of an international standard.
With the introduction of TFGA’s restructuring some difficulties were encountered with deliveries to Foschini stores division. Lead time reduction and the change in some buying patterns had an unforeseen negative impact on the timeous delivery of some merchandise. This also had an impact on the productivity of our local CMT base for a period during our summer season. We have now addressed these issues and stock deliveries were restored to normal in December. Each of the new design and manufacturing units are establishing their own handwriting, unique personality and culture in line with that of the respective trading divisions to which they supply merchandise.
These new units are now located within our group’s head office complex and are individually set up with their own unique showrooms, full design facilities and own production and design rooms making each unit very focused. This new way of working has given each unit visibly more ownership and accountability.
Our CMT suppliers are assisted financially from time to time, as well as obtaining assistance from our in-house pool of skills in quality assurance, human resources and production planning.
Our leadership academy continues as an effective development initiative, whilst at the same time it also is a tool for identifying staff with leadership potential. There remains a continued focus by our management team on retention and management of talent across the business. We continue to make steady progress towards our employment equity targets, as well as progressing our corporate social investment initiatives by sponsoring a feeding scheme in the townships.
The introduction of the import restrictions and Chinese quotas were imposed in an endeavour to give the local industry some breathing space to become more competitive, thereby maintaining a sustainable source of employment and ensuring future economic growth. TFGA continues to support the local CMT industry and remains one of the most significant users of this industry in the country.
One of our key focus areas this year is the re-engineering of our supply pipeline to ensure the smooth and reliable flow of product from our suppliers to our customers, which we believe will be of great benefit to them.
The design and manufacturing units will strive to supply innovative product and design to our trading divisions in order to remain the largest apparel supplier to these divisions.
The development of the required skills within the division remains a priority and the establishment of a proper multi-skilling programme will ensure that this is successful. In addition, positive and proactive development plans have been put in place for identified key staff.
BEE supplier development will remain a strategic focus.
TFGA is confident that it can sustain the growth in units being supplied to our trading divisions by delivering on our vision to create and deliver innovative product. Emphasis will be placed on delivery of products with the appropriate value and quality proposition with continually improving time-to-market.
