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In 2020, more than 50% of garment factories are likely to lose money by working with SHEIN.
60%~70% of SHEIN’s orders are small orders, usually no more than 200 pieces of single color.According to the feedback from the supplier, under normal circumstances, SHEIN will choose 4 sizes (S/M/L/XL) for larger sizes of clothing, and 6 sizes (S/M/L/XL/XXL) for trial production and testing. Most of the orders received are about 500~800 pieces.
SHEIN’s delivery time is very strict. The test order (also called development order) is 5 days, and the reordering production is 7 days.And the delivery time includes the time to buy fabrics, accessories and so on.
According to the feedback of the merchants, they don’t like the orders of Zhuotian Commerce (SHEIN purchasing company name) very much, they are too tired and may not make money.
The orders of SHEIN’s Amazon store will be sent directly by the clothing manufacturer, and the supplier will help SHEIN complete product inspection, labeling, packaging, shipping and other operations.(Relatively weak risk control)
It can be seen from the above information that SHEIN’s reverse transformation effect on the industry, which needs feedback, is mainly based on its scale advantage. In fact, the transformation of the entire production and operation mode of merchants is not much.SHEIN hot style clothing development success rate is not high, probably with ordinary clothing sellers fairly, but its ability of supply chain management is cow, large scale, its influence is stronger, is better on the effect of supplier management, mainly is the fast response ability, so it’s bigger than in the cross-border clothing’s reputation, take advantage of the response time to fast, expand sales.
I. Disclosure of SHEIN’s supplier management
In general, supplier management mainly includes the following three aspects:
1. Supplier introduction, including supplier selection, evaluation, guidance, trial production and subsequent introduction of the first batch of products.
Feedback from SHEIN current suppliers, the suppliers of barriers to entry is not high, do not like foreign companies such as ZARA management supplier, need based on checklists, investigating the supplier, and ask the suppliers to provide information about the company, such as the size of the market, the company’s basic business situation, the main products of core competitiveness,Or even key customers.After reviewing these information, the effectiveness of the on-site production process and quality management system should be audited, and the AVL(Approval Vendor List) list can be evaluated based on the results of the two audits.From the information available, it is estimated that SHEIN’s entry threshold for suppliers has not been refined to this extent.Although I have not read SHEIN’s evaluation criteria for suppliers, according to the feedback from suppliers, SHEIN values delivery time, cost and quality most.It involves less evaluation of suppliers, feedback, business guidance and so on.
2. Supplier performance management, including new product introduction management, volume product delivery management, product quality, supplier ranking, supplier rewards and punishments, etc.
Supplier performance management is the core part of supplier management. After the introduction of a new supplier, whether it can grow into a core supplier for long-term cooperation is mainly evaluated based on its performance.The supplier performance appraisal standard is actually the value orientation of the company’s management of suppliers. This time, the supplier gave feedback on SHEIN’s requirements on the cost, delivery date and quality of orders, but there was little feedback information.Therefore, it can be inferred that SHEIN does not pay too much attention to strategies such as supplier performance management and supporting supplier growth.However, in the actual process of cooperation, such as product design, cost improvement, service quality and other issues, the establishment of strategic relationship after successful cooperation, even joint development, the formation of symbiotic ecological circle, industrial belt and so on, are all based on the business cooperation after the two sides to run in, can form a stable cooperative relationship.These normal supplier growth management measures, it seems to involve still less.
In addition to performance management, supplier management should also include the following aspects:
1) Hold regular meetings.Such as weekly, monthly, quarterly, annual meeting, etc.For platform-based companies, due to the large number of suppliers, the regular meetings are generally held in a long period and will be held in batches such as grades, categories and rankings.
2) Performance ranking and feedback.It is very important for suppliers to know their position in the supplier rankings, so that healthy competition can be driven by rankings.Moreover, the standards of supplier performance ranking are the rules that suppliers should abide by.
In addition, from the perspective of cooperation types, according to the feedback from suppliers, Zhuotian business cooperation mainly includes two types: OEM and ODM
(1) OEM type of contract workers do not package materials, mainly earn processing fees.OEM type contract labor and materials, in addition to the processing costs, and the opportunity to earn a little on the material.
(2) ODM type, that is, after the supplier designs the style, it sends SHEIN to check the payment. If the supplier agrees to its production, it will generally choose the cooperation type of labor contract.
Either way, the delivery time is almost tight. SHEIN quality control personnel will spot check the finished products, and rework will be required if any problems are found.
3) After-sale management.If there is a problem with the product delivered by the supplier, the supplier needs to deal with it by itself.Due to the problems related to the supplier itself, there is less feedback information in this part.
3. Supplier’s withdrawal, including supplier’s shipment processing, settlement, contract termination, etc.
According to the feedback from suppliers, SHEIN has little management on suppliers’ withdrawal and basically has no withdrawal procedure. In most cases, cooperation is ord-driven and SHEIN is strong. SHEIN is not responsible for the tail goods of a cloth when the quantity produced is different from the quantity required by SHEIN.According to feedback, the current market has a special receipt of such tail goods, brand sales.

Based on the above conclusions, we can roughly get SHEIN’s supplier management strategy:
1, SHEIN preliminary phase of the supplier management is still in the relatively straightforward, because of its small bulk orders, style more, on the whole amount and the actual situation of the larger, relatively large number of suppliers, management of the supplier basically pursues is order driven model, are not in a clear supplier management mode.
2. SHEIN has a great influence in the industry and basically has an absolute advantage. Suppliers are based on compliance without any room for feedback.In addition, according to the feedback of some suppliers, in order to meet the delivery date of SHEIN, they need to work overtime, or even stop the orders of other customers, so as not to Delay the delivery date of SHEIN.

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