Overview
When your creative business grows, working with suppliers and sub-contractors to produce your goods can become an essential part of your business, along with continuing to design, create, market and distribute new product ranges.

This factsheet explains how your creative business can work effectively with manufacturers and highlights potential problem areas.

Why work with manufacturers and sub-contractors?
When your creative business starts to grow, it will become increasingly unlikely that you will be able to produce all the products yourself. So you will need manufacturers or sub-contractors to manage this aspect. Production will need to be delegated if:

• The quantities become too great for you to be able to deliver in time and on budget
• If you want to focus on the creative and development side and less on the production side
• Or if you haven’t got the skills and techniques to produce the goods that you designed

How not to work with manufacturers?
In the world of product design there seems to be a major communication gap between designers and manufacturers. Many design graduates approach manufacturers in the hope they will take them on, pay them a good design fee and produce and distribute the designed products against a good royalty.

This manufacturing culture is more prevalent in European countries such as Italy and Spain. However, relatively few UK manufacturers use external designers, and most successful in-house or external designers will have years of extensive technical and commercial training.

The reality is that as a designer you will need to buy the production services from the manufacturer, who in return will produce your prototype or samples and a specified amount of goods. You will then be responsible for the stock, distribution and marketing.

There is an increasing interest in bridging the gap between designers and manufacturers in this country, predominantly supported with government grants to improve innovation within the UK manufacturing industry. Organisations that provide support in this area are:

• www.industryforum.net
• Hidden Art
• The Design Trust (Eureka Project)
• Furniture Works

Issues of outsourcing
There are a number issues that need to be carefully managed if you are going to outsource the production of your business. These issues can be separated into three areas:

Cost Control
A major problem when working with manufacturers can be controlling costs and cash flow. The longer it takes between ordering the goods and paying for them and then actually selling the products, the harder it is for your to maintain a healthy cash flow and make a profit. If this period lasts a couple of weeks or months, it could mean that you have less working capital as your money is tied up in stock, which can be very costly.

Additional costs related to keeping stock are the storage and insurance of the goods, and the increased risk of damaged or un-sellable products.

Quality Control
If you are not doing the production yourself you will need to delegate it to someone who can and as a result will lose control over quality and delivering on time. A general rule is that the bigger the geographical distance between you and your manufacturers or sub-contractors, the harder it is to control quality. This is because it becomes more difficult to have a face-to-face discussion about quality, the lead times will increase and quality standards might be different where the production is taking place, than in the UK.

Costs will increase dramatically if work has to be redone due to mistakes or inferior quality. There will be an increase in time spent on the production of the goods, as well as administration and meeting time, and the cost of returning the goods. It is far better to get the quality right the first time around!

Building a relationship
The more important you are to the supplier or sub-contractor the more interested they will be in working with you. You can increase your importance by:

• Ordering larger quantities more frequently
• Paying on time
• Clearly communicating your needs
• Presenting how you will market your/their products and are planning to increase your sales

The Supplier Risk Analysis
The Supplier Risk Analysis highlights potential risks that are involved when sub-contracting. Being aware of them can help make your selection of suppliers easier, ensures a better relationship and a more effective process - all of which will have a positive impact on the success of your business. The following aspects need to be considered as part of this analysis:

• Availability: Are there plenty of suppliers locally - do you need to research potential suppliers in the UK - or is there only one supplier in the world, without whom you would be unable to produce your goods?
• Geography: Have you got local suppliers with whom you can arrange a meeting at short notice to discuss potential problems, have you got a supplier who you can meet occasionally, or do you deal with your supplier via an agent and is it very difficult to get a face-to-face meeting?
• Ordering of materials: Are your raw materials easily available or harder to obtain, or do you require a very complex combination of rare materials?
• Tooling and production techniques: Are the tooling or techniques readily available to produce your goods, is special tooling needed but you own it and provide special skills training, or are the tooling and techniques highly specialised resulting in training and production being time-consuming and expensive?
• Quality: How high does the quality of the produced goods need to be for you and your clients? How easy is it for you to train the manufacturer in the required quality standards? How easy is it for the supplier or sub-contractor to produce prototypes or samples to your standard?
• Lead times: How important is it that you deliver your products on time to your customers?
• Quantity: Is the supplier prepared to produce the quantities you require by the time you need them and at an affordable price? How easy is it for the supplier to produce and supply additional quantities at short notice?
• Amendments: How easy is it for the manufacturer or sub-contractor to make changes to their production? How willing is the manufacturer or sub-contractor to amend their production?
• Negotiation: How important are you to this supplier in terms of potential sales, profit or profile and in relation to their other clients? Are you able to negotiate a better deal in terms of time delivery, quality or price?
• Reliability: How reliable and stable is your manufacturer or sub-contractor? Are they a well-established and professional organisation or do you need to rely on one critical person to do the job for you?

Improving communication
Communicating clearly and concisely with your suppliers and sub-contractors allows you to operate more efficiently as there will be less re-work and stress involved. Written confirmation is of vital importance in this process, to ensure your expectations are met.

The following documents might be useful in this process:

• Confidentiality agreement: agreement from you to the supplier to ensure all information about your business and designs remain confidential
• First make sample only: report written by you to the supplier, giving information on required and actual measured sizes on vital points of the sample garment, plus additional comments
• Docket instruction: instruction to the supplier with exact details of fabrics and lining, sketches with front and back view, colours, information on samples
• Specification Sheet: instructions to the supplier with exact details of measurements at vital points, seam allowances, and location of buttons and button holes
• Quality report: report written by you to the supplier, giving information on the amount of samples checked, the size required and actual size measured on vital points, and a detailed description of what was correct or incorrect
• Order: your written confirmation to order the garments, with exact details of styles, type of garment, fabrics, colours, units and prices, as well as delivery dates and addresses

Further information

The Fashion Capital website has got templates of these and other useful documents available online for free.

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