TFG Apparel Supply Company

Positioning

TFG Apparel Supply Company (TFGA) is a strategic supplier of apparel and accessories to the group’s trading divisions, its primary function being to manage the supply of locally made apparel. It has no factories of its own but works closely with several local cut, make and trim (CMT) contractors with whom the group has long-standing relationships. It operates a full design studio for womenswear and childrenswear, and a facility for preproduction and production.

The division also co-ordinates the group’s activities in the fields of merchandise sourcing, shipping and quality assurance.

Further details of the sourcing and shipping operations are mentioned below in this report.

The division’s quality assurance unit provides a technical service to the group’s apparel trading divisions, to the homeware division and to TFGA itself. Quality standards and processes are continually reviewed in order to ensure that product quality is world-class and that local and international best practices are adopted.

TFGA’s in-house textile testing laboratory provides a testing service of international standard to TFGA and other divisions of the group and to the group’s outside supply base.

Review of the year

The quota system introduced by the Department of Trade and Industry, setting limits on the quantity of fabric and finished apparel which can be imported from China, has been in place for more than a year. One of its consequences, acutely felt in the past year, has been an inability on the part of local apparel manufacturers to obtain the types and quantities of fabric which are needed for some of the products desired by retailers. Thus negative effects have been felt throughout the supply chain, with a particularly strong blow to the CMT base.

The TFGA division and other traders in similar positions have therefore found it necessary to attempt to find alternative sources of supply from regions other than China. While these new supply possibilities have been explored, the local manufacturing capability, and particularly the CMT sector, has been greatly weakened, and TFGA has had to make strenuous efforts to assist its cluster of CMT contractors to stay in business.

Meanwhile China itself can no longer be looked upon as the prolific and reliable exporter which it has been until recently. This is the result of a number of internal factors including the appreciation of China’s currency against the US Dollar and some other currencies (including the Rand), rising worker remuneration and social upliftment, increased internal demand, environmental issues, reductions in export rebates and logistical issues in the run-up to the Olympic Games. The change in China’s status as an exporter reinforces the group’s need to have a wider network of sources of apparel, fabric and other products.

Through these more difficult times TFGA has continued to support its local CMT base, as well as encouraging the creation and implementation of transparent and collaborative partnerships with certain other suppliers. Greater consolidation within the CMT and textile base would stand the group in good stead for the future.

The shipping department continued to run efficiently and to add value to the procurement process by which the group’s trading divisions receive stocks of merchandise. The external clearing and forwarding agencies used by the division have once again given outstanding service.

Strategy

The group’s supply chain initiative, mentioned elsewhere in this annual report and outlined in the report of the previous year, has taken on added momentum. The aim of this initiative is to bring about improvements throughout the supply chain by a series of measures which amount to vertical streamlining. Among the benefits of the initiative will be improvements in stock turns, reliability, processes, compliance and other areas of the group’s activities.

TFGA’s main suppliers have supported a broad-based black economic empowerment (BBBEE) supplier development project that has been worked out by the group’s sub-committee on BBBEE procurement and enterprise development.

A drive is under way to up-skill and provide career enhancement for the division’s staff complement. The division continued with its leadership academy, which over the years has given staff members an opportunity to grow and progress within the group.

Prospects

TFGA will continue to advance the supply chain initiative in the forthcoming period. The positive outcomes of this should enhance the group’s capabilities for the future with emphasis on shorter lead times, guaranteed quality, enhanced reliability and the reduction of waste within the supply chain. All this should contribute to more reliable delivery and improved stock turns for the trading divisions.