Close scrutiny into every slice of the apparel supply chain can turn up key
areas where your company can achieve greater visibility.
Time squeezed out of the supply chain means more time and resources your
company can devote to objectives of your choice.
Perhaps you would choose to add this valuable time to the front end, to
creating and designing your products? Or maybe you would like to give yourself
more room farther down the chain, so that you can make split-second line changes
on a dime to respond to market trends?
Apparel has identified these 10 segments of the apparel supply chain where
you can improve your visibility and thus lower costs, speed product and improve
your overall decision-making abilities.
The apparel supply chain really begins at the point of creative spark inside
the designer's mind. While it may not be possible to capture these inchoate
musings in a file, you can come pretty close with product data management (PDM)
or product lifecycle management (PLM) solutions that allow users to save and
manage ideas, materials and product data in one place that provides visibility
into the process for everyone involved. With PDM/PLM, companies can streamline,
automate and maintain one version of the truth for a broad range of
pre-production processes. There are software solutions for concept/design
development and collaboration that capture designs and ideas digitally and store
them in one place that can be accessed by multiple parties and built upon. Other
tools enable specification management, acting as databases for style data,
grading rules and measurements, and providing a mechanism for communicating this
data via the Internet to contractors. Yet other packages focus on streamlining
the sample-making process, tracking sample fabric orders, fabric inventory and
fit sessions. And a core element of most PDM/PLM solutions is functionality for
workflow and line calendar management. Some players in this space include:
Gerber, Lectra, Freeborders, Porini, Assyst, Computer Generated Solutions (CGS),
Business Management Systems (BMS), PTC, MatrixOne, New Generation Computing
(NGC), GEAC and Intentia.
It overlaps with product development, but deserves its own category. Clear
protocols, improved calibration methods, engineered color standards and new
software solutions from companies such as Datacolor, She-Lyn/GretagMacBeth,
Color Solutions International, Archroma/Clariant and eWarna can
go a long way toward eliminating the time and expense of sending multiple lab
dip "submits" across the oceans via courier and provide a company with greater
visibility into its color supply chain. Â Opting for "science" over "art," many
companies are improving visibility and speeding time to market by basing
decisions on spectral data sent via Internet �even if they do demand a physical
swatch for final approval. Members of the American Association of Textile
Chemists and Colorists (AATCC), such as Sears, Target and May Merchandising,
have been at the forefront of developing best practices for color management. At
Sears, for example, physical swatches, visual evaluations, subjective
communications and Excel spreadsheets are being supplanted by digital standards
and communication. Â The retailer is doing spectral evaluations of submits, and
saving results in a database that can be tracked with reporting tools. Â These
color anagement initiatives have shortened Sears' timeline considerably, says
Rebecca Leu, director of CAD, color and packaging. "Visual evaluation is still
necessary, and tracking is still cumbersome," she adds, but progress is ongoing.
Sears' goal is to increase its use of virtual evaluation tools and procedures,
Web-based communication and color standard reflectance data.
Where's my stuff? It's a question that, unfortunately, is asked too often in
the apparel industry, but with the apparel supply chain increasingly fragmented
among multiple manufacturing and consolidation points, keeping track of product
can be a major problem. Solutions for tracking products from the factory to the
retail warehouse �whether in-house or through third-party logistics (3PL)
providers such as Crowley Logistics, Federal Express, UPS, Maersk and Seaboard
Marine �are giving apparel companies new insight into their supply lines and
the ability to change
direction on a dime. This can be particularly beneficial if you are trying to
track different items for the same collection or ensemble, coming from different
countries. 3PLs can streamline the supply chain in other ways, says Don Moscoe,
CEO of the online sportswear and equipment retailer BoardZone. His Toronto-based
company had some unique difficulties arising from its high volume of sales to
the United States.
To begin with, BoardZone, based in Canada, couldn't get U.S. quota to import
its snowboard jackets. Secondly, the company had to pay a $25 brokerage fee for
each package shipped across the border. Â BoardZone enlisted the help of UPS,
which solved both problems. Now the company can buy direct and have its jackets
shipped straight to a U.S.-based UPS warehouse, avoiding quota problems. As for
the brokerage fee, UPS now consolidates 40 to 50 orders in one shipment, so the
$25 is spread over many orders, instead of one. Â Finally, Moscoe notes one
other interesting
benefit: Supply chain invisibility. With the solutions from UPS, the consumer
is ultimately unaware of where his goods originate, and does not have to worry
about the hassle of having product shipped internationally.
These days, it's difficult to separate sourcing from logistics, but we'll
give it a go. We're talking here about that front-end process of sourcing:
requests for quotes (RFQs), specification management, time and action calendars
and everything else involved in negotiating a contract with a factory and
getting the right product manufactured and to the shipping dock in a timely
fashion. Â "Probably one of the biggest problems and probably one of the biggest
reasons CIOs don't sleep at night is the supply chain," says Ed DeMartino, vice
president and CIO of The Children's Place. Having identified four "pain points"
within its organization: 1) the purchase order management process; 2) pipeline
visibility; 3) information collaboration with trading partners; and 4) financial
invoice processing, the company recently started implementation of the
SteppingStones sourcing solution from TradeStone to address these actions.
DeMartino says SteppingStones is a best-of breed solution that is simple,
flexible and can be distributed to trading partners "without having to do an
enormous amount of training and processing." It also met the company's need for
a Java WebSphere (IBM) platform, on which its style development system was
built. "Pipeline visibility is a very critical piece for us," says DeMartino.
The Children's Place often experiences "black holes" within the sourcing process
where it loses visibility to its product, he says, adding that the company needs
to improve communication
with its trading partners so it can have visibility to the product through
the entire process, "from the inception of the merchandise to its being staged
to go via water to get into the country." Knowing where it is in the process
will give The Children's Place more decision-making power to best service its
stores, says DeMartino.
Sometimes the smallest things can cause the biggest problems. "If you go
through customs and your label is wrong, customs can stop your whole shipment,"
says Paul Chamandy, vice president of new business development at Paxar. Indeed,
those little labels carry a lot of weight. Product labels must convey
ever-increasing amounts of information in multiple languages, including care
instructions, country of origin, vendor and style numbers, UPC numbers, carton
contents and more. Missing or incorrect labels can wreak major havoc, causing
shipment delays and other problems.
Solutions from product identification giants such as Avery Dennison,
Checkpoint Systems, Paxar and Shore To Shore can provide companies with
visibility into this crucial part of the supply chain by allowing you to control
the data that's printed thousands of miles away, from your desktop at corporate
headquarters. At Nike, for example, Avery Dennison's InfoChain Express has
improved the accuracy and reliability of Nike's purchase order (PO) process,
according to Steve Hills, manufacturing logistics manager of global apparel
sourcing. Nike uses the solution on the factory floor to print its UCC 128
carton labels, which describe the contents of cartons of shoes or apparel.
"We've gone from a situation where we used hard-copy documents that gave us a
point-in-time set of data to pass to our factories, [to now] having a more
real-time document, and a more automated process at the factory floor," he says.
Call it the payment paper trail. The endless mire of letters of credit,
orders, invoices and payments traditionally involves a lot of paper pushing and
reconciling. Lengthy processing time involves many non-value added tasks, and
late payment can damage relations with supply chain partners. And of course
there are significant document handling costs. (The charges of preparing
documents for one transaction can total in the hundreds of dollars.) But help is
on the way: Automating the financial supply chain "connects buyers, sellers and
their service partners on a hosted, paperless platform with integrated financial
services that results in visible processes, decreased costs, improved cash flows
and streamlined operations," says Kurt Cavano, CEO of TradeCard.
If you're still managing your business by fax and by phone, it's time to
enter the 21 st century. These are processes that add no value, waste time,
create mistakes and redundancies and are completely inefficient, no matter where
they're performed along the supply —or demand �chain. Order entry is no
exception. In the olden days, a retailer would fax or call a manufacturer and
relay an order over the phone, while the representative on the other end
scrambled to write it all down, and then re-entered it into a computer system.
Retailers had no insight into their supply chain, and had to rely on a human
presence on the other end to take orders, answer questions and track problems.
With the advent of the Web, manual processes can be increasingly automated, such
as with CenterStone's Buyer's Page, which is designed to enable retailers to
order online, 24/7, from manufacturers that have implemented the solution.
Buyer's Page also provides visibility into a database of inventory, pricing and
product information, including order status, says Tom Detmer, president and CEO.
On the manufacturing side, the benefits are "incredible" as well, says Alison
Smith, director of operations for Marmot Mountain, a manufacturer of outdoor
sportswear and equipment (with three of its own retail stores). Marmot receives
orders via Buyer's Page from scads of single-door specialty retailers, she says.
Buyer's Page has eliminated the "middleman," interfacing Marmot's back-end order
entry system directly with the retail customer. "A retailer logs in, enters
their order, it comes to us, we look it over and push a button to submit it to
our system," she says. For both parties, the paper trail is eliminated, accuracy
is improved and time and money are saved, all while giving improved visibility
into the retailer's pipeline.
What merchandise do you have? Where is it, and where is it going? Simple
questions, but if you don't have a handle on this constantly changing
information, you can start bleeding financially from expenses that add up
because you are not able to track your goods. This is what was happening at
Coolwear, a popular apparel brand sold in stores such as Sears, JCPenney,
Macy's, Nordstrom and Bloomingdale's. The firm also does private label
manufacturing for many of these same department stores' lines, such as Sears'
Canyon River Blues. Â Adam Eisenstadt, chief of technology, says that Coolwear
had no "peripheral vision" into its business �"no visibility whatsoever into
import tracking, work-in-process, inventory, raw materials inventory �nothing."
It needed the ability to ship its product on time, in the right boxes, with the
right labels, and know what it had and where. It needed to fix problems such as
this: "If JCPenney orders 1,000 of an item, and it gets sent to one of our
distribution facilities in Miami �and for whatever reason they decide that they
can only take 500, and we have 500 pieces lying there, those items sit there,
and don't get resold most of the time," Eisenstadt relates. To improve
visibility into its inventory management �and frankly, into its entire supply
chain �Coolwear implemented Computer Generated Solutions' BlueCherry solution
to "unify all of [its] systems," says Eisenstadt. Among other things, the system
will provide raw material and finished goods tracking, working process and
production information. Its small-package shipping system will integrate
directly with FedEx and UPS. Â Eisenstadt says BlueCherry will replace
Coolwear's "extraordinary" spreadsheets, bringing everything into one central
application. "It's going to do all of our EDI and bring it directly into the
application," says Eisenstadt, who notes that there are 5,000 reporting fields
in the system, which can be dragged and dropped, simply, in any order and
amount, to create relevant reports for management.
Twin sibling to inventory management. It's crucial to know what's in
inventory, and apparel firms and retailers also must be able to harness that
information to move merchandise through the warehouse and to stores quickly and
efficiently. In fact, some retailers are getting a leg up on the warehousing
process by skipping over it altogether �shipping merchandise direct-to-store
from the factory. A wealth of software and technology solutions from the likes
of Manhattan Associates, Real Time Integration Inc., AL Systems, Foxfire
Technologies, GEAC, Logility, SAP and Network Systems International �just to
name a few �are designed to give a company greater visibility into its supply
chain by automating and networking processes such as cross-docking, material
handling, picking and packing, returns and damages control and shipping. But the
biggest news in warehousing these days?  You guessed it �RFID. With
announcements by major retailers METRO, Wal-Mart and Target that they will
implement RFID tagging at the pallet and case level with their respective top
100 suppliers in the coming year, the technology has become top of mind for most
large retailers. RFID systems consist of tags (chips that contain identification
and often other data) and reading devices that convey that information from the
tags to computer systems. At the warehouse level, companies can quickly and
cost-effectively track large amounts of merchandise when tagged cases pass by
the RFID readers, eliminating the need for hand-held scanning of individual bar
codes. While conversion to RFID systems is a costly undertaking, Lee Scott, CEO
of Wal-Mart, remarks: "In the long term, [RFID] will provide benefits for all of
us."
You want me to eat what? Sometimes one of the best ways to gain insight and
visibility into your supply chain is by understanding the culture of the
different stops along the way. This means knowing or defining your own corporate
and brand culture, and understanding that of other apparel businesses,
especially your brand's licensees. For instance, if you are a retailer, it's
important to have insight into the lifestyle image national brands are
projecting. If you know you are carrying a popular urban brand that appeals to
readers of hip-hop music magazines, for example, you won't want to position it
next to Lilly Pulitzer in better women's, right? Cultural connectivity also
means keeping abreast of geo-political developments and cultural differences in
the countries where you produce your goods. Â For instance, are you trying to
negotiate terms with a Chinese factory? Don't refuse the chicken feet �a
Chinese delicacy �offered during lunch. It can also mean following and acting
upon demographic shifts. Maybe much of your distribution is in Hispanic areas �
how can you capitalize on that? One good way to keep your finger on the pulse is
to become active with industry associations, such as the American Apparel and
Footwear Association (AAFA), the National Retail Federation (NRF), the American
Apparel Producers' Network (AAPN) and SEAMS. In addition to offering networking
opportunities, these groups, and others such as the Voluntary Interindustry
Commerce Standards (VICS) Association and the Retail Industry Leaders
Association (RILA), often conduct studies and report on best practices in supply
chain management.
The bottom line: Collaborate with your supply chain partners on many levels
so that they become integral to the success of your business, not separate,
far-removed links. The world is your oyster; so don't just focus on the pearl!