The language of the Apparel Industry
Clothing manufacturing companies, apparel businesses (both wholesale and retail), warehouses, and any other components that are involved in either the production or distribution of that product have a unique language. After 41 years of being in the apparel industry I picked up all of the industry language. I now teach apparel classes as a professor at several colleges and have been the managing partner at AIMS since the days the apparel software company began. It is imperative that if you want to do business in this industry, you must first learn the internal semantics.
There are many key words and acronyms within the industry that apparel companies around the world use daily to convey their business needs. Let’s start off with one of the most essential key acronyms, which I also happen to come up with for my students, PLADS.
- P rodution/Manufacturing and Importing
- L ogistics/Shipping
- A ccounting/Finance
- D esign/Merchandising
- S ales/Marketing
These five key items together, make for a successful business. Just like you have 5 fingers, there are five key components in PLADS and when you close those 5 fingers and make a fist, you have a strong and successful organization. If you were to remove one of your fingers (or in our case) take one of the key components out, that fist would weaken, your business would be missing a key item in running efficiently.
Businesses today are running at a much faster pace than ever. In this day of great technology, no one has time for snail mail, inputting hand written orders, etc. An apparel ERP software is like the muscles in your hand which has several functions. When moved properly the muscles make the hand move. Technology is a key factor that lets everything run seamlessly together and efficiently. The employees at a company are like the joints connected to the muscles they direct everything. Therefore, companies with talented employees that can use a strong ERP system to manage operations, take orders electronically, use automated emails to communicate, and do thousands of other tasks automatically run the most efficient businesses in the apparel industry.
Knowing the correct words, abbreviations, and acronyms whether it is internally with peers or with buyers, vendors, suppliers, etc. will take you a long way. So, why do we use special words and acronyms you ask? It’s simple… convenience! We, the fast-paced fashion industry, have demanded the need to make things shorter and quicker. The saying “Time is money” could not be any more relevant now than now.
What is an acronym?
Acronyms are shorter forms of words or phrases. These abbreviations and acronyms come into play daily, especially when certain written or verbal processes of your business are standard and routine. For example, “Yves Saint Laurent” is often written as “YSL.” You can see how writing the three-letter acronym can save you a lot of time and keep your business documents and purchase orders from sounding repetitive, and plus, how many people really want to say that name over and over again??? LOL (laughing out loud)
Once you understand the key elements of running a successful business, you should familiarize yourself with key acronyms that are used daily in various processes of the industry such as:
- UOM – Unit of Measure (yards, gross, dozen, unit)
- BOM – Bill of Material (list parts required to assemble product)
- WIP – Work in Process (goods in the process of being made/not yet in inventory)
- OTS – Open to Sell (stock + WIP – Orders = OTS)
- OTB – Open to Buy (for retail buyers, this is money or merchandise budgeted for purchase during a time period that has not been ordered)
- CMT – Cut, Make, Trim (full package production of garment offshore or domestic)
- FOB – Freight on Board or Free on Board
“FOB shipping point” or FOB origin” indicates that the buyer pays the shipping cost and takes responsibility for the goods when they leave the sellers premises. “FOB destination” designates the seller will pay shipping costs and remain responsible for the goods until the buyer takes possession.
- LDP – Landed – Duty- Paid (total cost of finished garments entering the U.S. including transport and import duty fees)
- CAD – Computer Aided Design (textile, pattern, storyboards, etc.)
- CAM – Computer Aided Manufacturing (cutting machines and digitizing pattern)
- CAB – Computer Aided Business (QuickBooks, AIMS ERP Software, etc.)
- ERP – Enterprise Resource Planning
ERP systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems such as AIMS360 automate this activity with an integrated software application or applications.
- MRP – Material Requirements Planning
MRP is a production planning and inventory control system used to manage manufacturing processes. Most are software based.
- PLM – Product Lifecycle Management (managing the product lifecycle from a-z)
- FTC – Federal Trade Commission (issues RN# for clothing manufactures)
- RN# – Registration Number (identifies manufacturer of clothing and must be on care label)
- RMA/RA # – Return Merchandise Authorization (number given for returns)
- EDI – Electronic Data Interchange
EDI is used primarily by department stores and larger companies and is a set of standards (software) for exchanging information/automated P.O.’s, returns, creating, transmitting and receiving documents.
Here are some other key acronyms that you you should look up and understand:
These are just a few of the many key acronyms that will help your business move forward. Once you understand and have mastered the language of the industry you find it easier to communicate and build your business.
Aside from being the industry’s leading apparel software, AIMS has been teaching “Understanding Apparel Principles and Costing” to aspiring fashionistas for over 16 years in trade schools and universities throughout the U.S. Classes are currently being taught at FIDM, Los Angeles Trade Technical College, Art Institute of CA San Diego, Cal Poly Pomona AMM, UCLA Extension, and Saddleback College Irvine, CA.
For a more detailed list of acronyms and to learn how AIMS can help grow your apparel business, please contact us today!