We - KappAhl

STEP 2: PURCHASING
“RIGHT SALEABILITY”
– CENTRAL FOR
PURCHASING
Buyers, just like KappAhl’s designers, have a great responsibility
for ensuring that what ends up on the mannequins, hangers and
shelves in the stores has the right saleability.
The buyers are those who ultimately determine which garments
are to be manufactured, in what volumes and when. The
buyers also set the price of each individual product. We are
known to be good at this, which is shown not least in our low
inventory levels and high margins for the year.
SEVEN PURCHASING OFFICES IN THE WORLD Negotiating
purchase prices is also the job of the buyer. This is done with
the help of purchasing offices in Bangladesh, India, China (2),
Lithuania, Turkey and Ukraine. The buyers can also make
changes in the design of certain garments, for example to
facilitate manufacture.
The buyers are responsible for gross profit on sales of the
garments purchased. They follow up every individual garment
from introductory design and production right to the store.
They are also responsible for deciding whether, and in that case
when, the price of a product must be reduced.
SAFE FASHION – NATURALLY KappAhl’s clothes must be safe
from the health and environment perspective, and free of harmful
substances. To contribute to cleaner production KappAhl
requires that suppliers follow current environmental laws and
that they also meet KappAhl’s own requirements, which are
tougher than Nordic legislation. The company also closely
follows research and development in the chemicals area. You
can read more about this on pages 18–20.
STEP 3: MANUFACTURE
VALUE CHAIN
SECURE PRODUCTION
MODEL
All our production is with external companies. This means that
we are not dependent on any single supplier. It gives great flexibility,
since we can easily change to another supplier of the same
kind, but better when necessary.
In addition the arrangement means that we are not tying up a
lot of capital in factories. We would rather invest the money in
new stores so that we can reach more customers. This way of
doing things also gives us the freedom to change production
methods if our garments should so require.
This would be difficult if we ourselves had invested heavily in
machinery that is restricted to one type of production, requiring
a certain level of capacity utilisation to be profitable.
LARGE NUMBER OF SUPPLIERS TO CHOOSE FROM We buy
in from over 200 suppliers. About 30 producers supply about 60
per cent of the total volume. Most purchases are made in Asia.
Almost 70 per cent of the garments come from there. The rest is
bought in Europe. Purchases and deliveries are co-ordinated by
KappAhl, which cooperates closely with the purchasing offices
throughout Asia and Europe. The purchasing offices follow up
quality, price and code of conduct.
PARTICULAR ABOUT QUALITY We attach great importance to
quality assurance, using clear directives and frequent spot checks
at all stages of the production process. It’s worth it. The percentage
of garments where faults have arisen in production is now
negligible, not even one per thousand.
The purchasing offices also check that the suppliers comply
with KappAhl’s code of conduct and follow up their environmental
work. They also look for new suppliers, monitor timely
and correct deliveries of goods and handle export administration.
In other words, they are KappAhl’s extended arm in important
countries of purchase.
2008/2009 Kappahl 23