Geoff Krasnov offers apparel/clothing/garment manufacturing and sourcing news.

Friday, January 21, 2011

PLAN AHEAD- Procure inventory now!

Yesterday, I ordered more yarn to replenish inventories. To my chagrin, I fond prices have escalated yet another 18% since last months purchases. I spoke with several people close to the supply chain and all are concerned about outages late in the third quarter. It is also expected that prices will continue to escalate. Although Style Source does run a stock inventory position the cost of that inventory has risen close to 70%. This means that capitalization of inventory and carrying costs have risen accordingly. Although it makes some sense to increase inventory position in greige goods to ameliorate the possible shortages later in the year we must watch our spending and where cash is tied up to insure liquidity. Thus, we are HIGHLY recommending to our customers they consider funding dedicated greige goods inventories as insurance for supply for the second half of 2011. We will strive to maintain a strong stock position in all fabrics, but all it takes are several larger unplanned orders to create a short term shortage that may take much longer to replenish. We are all in this together, and, as yor supplier and partner, are doing all we can to communicate the urgency of this situation. Google some articles on "cotton shortage" or cotton fiber prices" to educate yourself and make decisions that will insure your success in 2011!


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