Three reasons why you should Web-enable the supply chain by Tony Parkinson, Managing Director, Option Systems Limited (OSL)
Companies in the apparel and footwear sectors typically lag behind those from other industries when it comes to implementing new technologies. Yet more and more are now deploying, or considering deploying, Web-enabled supply chain software.
The global nature of the clothing and footwear production process means that different functions can occur in different places, perhaps in multiple locations. As a result, its hard to keep track of whats going on within the supply-chain. The answer lies in an internet-based ERP system: it can provide greater levels of control over a worldwide network of suppliers, sales and production.
Whats more, global partners and suppliers can collaborate, in real time, through a single system right from the design, cost and production of garments through to their picking, packing and shipping. Not only that, they can also reduce logistics costs, speed up delivery times and improve the logistics process by delivering real-time management information from across the supply chain.
Web-enabled supply chain technology is highly flexible, enabling clothing and footwear companies to develop enterprise solutions according to their local and global needs. It can be deployed as an enterprise-wide solution, and target specific areas of the supply chain where inefficiencies may exist.
Communication Communicating with suppliers in other countries has always been problematic due to language barriers, the limitations of telephone lines and incompatible working hours. Fax, and more recently e-mail have enhanced the process considerably, but these methods are still far from perfect since they are essentially modern additions to an out-of-date system.
Web-enabled solutions provide apparel organisations with full visibility of their entire global supply chain, making it easier for them to control their offshore manufacturing and/or near-sourcing operations. Collaborative sourcing systems can remove the potential for inaccuracy, save time and effort as you often dont need to re-enter data, and eliminate third-party translation groups. In addition, suppliers can receive their POs, and enter tracking and shipment details directly into the system to speed up processes and make each aspect of the supply chain more visible.
This electronic communication also helps to ensure operations are not so heavily affected by time-zone issues. It delivers low-cost, efficient communication that integrates the disparate components of the global supply chain into a single process.
Access to the latest markets - Internet shopping offers tempting retail margins and creates an avenue to increase sales or tackle markets without a direct presence. However, the management of Internet sales differs from both high street consumer retail and wholesale both in terms of communications with customers and the physical fulfilment of a high quantity of small orders. Returns rates on apparel can be as high as 75% as customers often buy multiple colours and sizes to try at home, with the intention of returning some of them, which can skew your business reporting.
A Web-based solution gives your business the opportunity to enter the Internet retail market easily and cost-effectively by providing manageable online processes, which are co-ordinated with your complete business model. Any authorised person within the organisation can update the system, ensuring stock and sales figures are accurate throughout both the sales and returns operations.
Design and Development Since the same core set of manufacturers tend to be used, there is an opportunity for apparel companies to become involved in the production process at an early stage. This helps the manufacturer plan capacity, source materials where necessary, provide advice regarding costing reductions and give them immediate feedback in the sampling process. Unfortunately, this opportunity is seldom taken by apparel companies due to communication and access limitations.
Collaborative PLM/PRM solutions enable every participant in the supply chain to work on the same set of data, rather than the last spec pack they received, whilst informing all parties automatically of key changes to specifications, and holding a full history of the evolution of a style. As a result, a companys product flow is cost-effective, up-to-date and, crucially, has the correct quantity and specification.
Work anywhere - Data can be accessed via the Internet from anywhere in the world at any time, enabling staff to work from home, the office, Internet cafes and on the move via mobile devices. The speed, reliability and affordability of high-quality bandwidth are all increasing rapidly, and companies need to take advantage of this to remain competitive.
Sales support - The ability to put your entire catalogue online for internal and consumer access makes administering your supply chain much more cost-effective there are fewer paper-based catalogues and customers do the bulk of order processing themselves. This resource is accessible 24 hours per day, can easily be written to CD or DVD and can be rapidly updated.
Confidently manipulate the supply chain to cut costs - The benefits of low-cost labour have led Western companies to increase the level of activity of their manufacturers to include labelling, tagging and pre-packing goods for direct shipment to distributors. Although cost savings can be considerable, there are problems which offset them, for example poor communication channels that lead to misinformation, and conflicting work hours.
A Web-enabled supply chain allows you to push costs up-stream in the production process, while overseeing the offshore activities with full visibility to ensure you identify issues within the production chain and resolve them before they become problems.
Its not only the sourcing supply chain that offers the opportunity for cost savings. A move towards customers using online resources to place orders, check their accounts, pay their bills and track their shipments will also reduce the level of resources required in your Customer Service department.
Costs of weak supplier competition The specifics of the apparel industry make its supply chain processes far more complex, which has led to domination by the few suppliers who can offer a complete service. A limited number of suppliers monopolise the market because the alternative - sourcing producers of all the constituent parts of your products is often more difficult to manage. The cost implications of this can be dramatic on the bottom line as prices are forced up.
Web-enabled supply chain technology gives you the means to increase the range of suppliers available to your business, because the management of a more diverse supply chain is much simpler. Full visibility and co-ordination of multiple elements within the supply chain enables your business to work with the most cost competitive options available. The result is that your processes will enhance your bottom line, and ease the stress of managing a global supply chain.
OSL is a specialist in the supply of web-based technology to clothing and footwear companies worldwide. Its STYLEman product suite is the most advanced, versatile and innovative supply chain and ERP solutions for these sectors, providing a scalable offering that can support from one to many hundreds of concurrent users Customers include Ben Sherman, Farah, Hi-Tec Sports and Pepe Jeans.