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Posted Date: 4/1/2003

PLM Coming on Strong

By THOMAS RYAN

Move over PDM. Here comes PLM.

While many apparel vendors continue to get the kinks out of product development management (PDM) systems, a whole new set of communication tools is emerging with promises of drastically shortening lead times, enhancing product innovation and recouping untold efficiencies throughout the supply chain, particularly in pre-production. Called product lifestyle management (PLM), these technologies are seen as the natural evolution of PDM and are expected to take collaboration between all trading partners to another level.

"It's the next generation of PDM," says Laura McCann, president and founder of Zweave Inc., an applications service provider for the fashion industry that is offering a PLM package. "You're not only taking information from CAD and integrating it with PDM, but you are also looking at the entire workflow and all product management issues in taking product from trend to design to sourcing to manufacturing. You're taking the footprint for PDM and extending it earlier in the lifecycle and later in the lifecycle."

Realizing the limitations of just focusing on the back end of the production process to cut lead times and improve inventory management, some apparel players are looking for more "complete end-to-end, enterprise solutions," such as PLM, to encompass the front end as well, according to Nancy Johnson, founder of Optimyze, a consulting company that helps apparel companies streamline product development. These new communication tools promise to revolutionize the way information - whether product specs, bills of materials, sketches or samples - is handled between design teams and all production partners.

"Vendors need to think about what kind of architecture they need to build their software on so their business is ready for the future," says Johnson. "You can't build on old code anymore. It has to be Web-based, image-driven and very accessible because that's where we're heading."

PLM, which was developed in industries such as auto and aerospace, capitalizes on the Internet, and the big benefit is that up-to-date product information is accessible from anywhere in the world through any Web browser. A clear advantage of using the Internet is that software typically doesn't have to be installed at the factory, and a task can be completed with a fraction of the bandwidth and server power normally needed. Eventually, the browser is expected to replace the phone, e-mail and faxes as the primary means by which apparel companies send data and collaborate with trading partners.

Moreover, PLM is expected to help coordinate all ERP and CRM communications, and significantly improve collaboration not only in sourcing but across marketing and other operations. "Once it's in there, everybody will be touching it," says Kevin O'Marah, a vice president at AMR Research, where he focuses on supply chain and product lifecycle management strategies.

For apparel, a more robust communications tool seems to be sorely needed. While it's more complicated to build a car or airplane than a T-shirt, apparel is a highly SKU-intensive industry with constant innovation. "The lifecycle of an apparel product is typically measured in weeks, with planned obsolescence part of the industry's modus operandi," says Walter Wilhelm, of Walter Wilhelm Associates, a consulting company focused on the front-end, or pre-production, processes in the soft goods industries.

"Where it gets complicated," adds Scott Starr, strategic account sales representative at PLM solution provider PTC, "is when you have 200 different styles of shirts and pants all being made in five different colors and eight different sizes. And each SKU could have a separate cost. It can get fairly complex. So you really need to make sure the right information is there at the right time and the right place."

Fred Isenberg, vice president of sales, New Generation Computing (NGC), says mistakes in the apparel production process are largely due to miscommunications, such as a contractor pulling up a PDF file from an old e-mail containing the wrong product specifications. Having the most current product information on the browser available to all supply partners will solve many issues.

"A lot of people just don't know what everyone else is doing," says Isenberg. "If everyone can have clear visibility, you can avoid problems when you collaborate together." NGC has worked with Russell Corp., Wilsons Leather and Kellwood on supply chain solutions.

Jerome Johnson, vice president of business development at EDS PLM Solutions, says PLM helps share "tribal knowledge," or information not easily codified unless people are working closely together. "Our PLM systems take it out of people's heads and make it tangible and usable. And when you are able to capture thoughts and ideas to that level, it really makes all your processes work faster for you."

PLM also touts the ability to use exception reporting, automate processes and better organize components and designs.

Paul Gilmartin, vice president of consumer products for MatrixOne, says that PLM enables apparel suppliers to measure the time and cost implications of any changes in product design, including using different colors or materials, or switching factories. "Before you even introduce a product into design, you can be managing all the materials, colors and processes related to it," says Gilmartin.

Kerry Malloy, worldwide senior sales support executive for Gerber Technology, says a key advantage is being able to make adjustments, such as suddenly needing to replace an out-of-stock zipper. The system can find out what alternative zippers are available and the cost implications, and has the visibility to see how many styles are affected by the change. "You can make recommendations on modifications to make it better, less expensive, or faster," says Malloy.

Through its WebPDM solution, Gerber, with the largest PDM apparel market share, can track product through its lifecycle.

Although less duplication and better utilization of resources should lead to cost savings, the big benefit of PLM is expected to be shorter lead times. For most apparel players, it still takes 12 to 18 months to go from initial concept to having a design ready for production, representing 40 percent to 50 percent of the whole product lifecycle. A PLM system is estimated to cut 25 percent to 30 percent in lead times.

With trends moving in and out of fashion faster than ever, it's critical that design teams become quicker to market.

"If you can cut your lead time by 30 percent, you're 30 percent closer to the trend," says Starr at PTC, which is working with Nike and Timberland on PLM solutions. "And if you can get a hot product to market before your competitor, you have the best chance of selling a garment at full price."

Greg Lonn, a product manager at PTC, says PLM helps with the battle of overestimating and underestimating demand, which can lead to overstocks as well as shortages. "The cost implication is huge and the profit implication as well," says Lonn.

Besides a greater urgency to be quicker to market, the move to PLM is expected to be pushed by the continuing consolidation of the industry that is making retailers and vendors hunt down fresh ways to become more efficient and cut costs.

The need for a higher level of communication is also due to the industry's expanding global sourcing network, with different Third World countries continually popping up as key hubs for cheap apparel production. Also, it's not uncommon for raw materials to be bought from one continent and production done in another.

"Every year cycle time seems to be tighter and tighter yet the supply chain of their business is getting more and more spread out," says EDS's Johnson. "The ability to respond to trends in fashion within a very dispersed business environment is very, very difficult."

PLM Software Vendors: Diverse Offerings

PLM solutions are coming from many software upstarts tailoring solutions just for the apparel space, as well as existing PDM providers.

Gerber, Lectra and Freeborders have developed Web-based solutions that combine PDM with features of PLM.

Lectra's Gallery solution supports not only management of all data and files associated with development of a particular style, but also the overall business process and product lifecycle.

"This combination provides substantially more value for our customers," says Terry Hedden, director of business development, Product Development Solutions, at Lectra. "Our solutions enable customers to produce their products faster, at a higher quality and at a lower cost."

Freeborders initially provided two robust PDM solutions, FB iPDM and FB Style Manager as a result of its acquisitions of Ai and Karat Software. Based on feedback from customers such as Liz Claiborne, Target and Dillard's, Freeborders expanded its suite of products to PLM software to support initial line conception through order management.

"Freeborders' applications are modular, each aimed at specific product development processes, such as fabric development or line planning, but are easily bundled together to provide a comprehensive PLM solution," says David Knudsen, senior vice president, marketing, at Freeborders.

Large supply chain management firms such as SAP, PTC, Matrix One, EDS and Geac are also taking PLM successes in industries such as auto, aerospace and consumer packaged goods, and applying them to apparel. "The problems they all face are pretty much the same," says Chris Kelly, vice president of marketing communications, EDS.

In December, New Balance selected Matrix-One's collaboration software. "As our company becomes increasingly global, we are accumulating an increased volume of information and processes that need to be accessed and managed," says Paul Heffernan, executive vice president of marketing, design and development at New Balance. "MatrixOne's solutions will help us better manage our product development process, which will enable us to meet one of our most critical goals: reducing time-to-market. We expect to take a significant amount of time out of our development process."

MatrixOne's collaboration tools enable global product development teams, including suppliers and partners, to develop, share and manage technical product information and processes from a common repository across the entire product lifecycle. It also creates a unified environment for coordinating multiple, large scale programs, enabling real-time visibility with developers to all project information, from MatrixOne solutions and other systems. Finally, it enables companies to rapidly configure MatrixOne solutions to meet their unique requirements with minimal programming.

Tahari, joining companies such as Ellen Tracy, has been installing Business Management Systems' Vertex apparel software to address all stages of development and pre-production, including raw materials management, purchase order tracking and costing. "It is giving us more functionality than just managing specifications. We will be able to view the entire process of development and pre-production as well as specifications and bill of materials," says Mark Segal, executive vice president of operations at Tahari. Among the benefits, Segal cited improved communications and data integrity, integration of business processes and elimination of duplication of entry. The end result will be reduced to-market lead time and a quicker response time within the organization. Going ahead, Tahari will have all raw material management under Vertex by the fall, and the goal is to integrate all off shore offices to track purchase orders and work-in-process stages directly from the factory. "At the end of the day, I want to go from concept to warehouse," says Segal.

Connectrix has created an integrated brand management system designed specifically for the apparel industry. "It's designed for brands that design their own product and sell to consumers through multiple channels," says Will Foster, founder/system architect, Connectrix. It was created by former IT managers at J.Crew and the retailer remains its only client, but the product is now being marketed to others.

A key feature is Connectrix's Merchandise Line Management Engine, which tracks changes to the line assortment on a daily basis, and communicates these changes throughout the organization from product development through liquidation planning. "For example, you are no longer developing technical specs for products that were dropped from the line," says Foster, former vice president of merchandise information at J.Crew. "Wherever you are in the brand process, you are working with the most up-to-date information." Connectrix's Product Development Suite keeps track of line changes during production, and also captures costs of components and finished goods.

NGC's e-SPS solution is geared toward companies that need to source product through an Internet-based platform, with a key focus on linking partners in Asia, Latin America and elsewhere with a seamless, inexpensive communications network. In all, e-SPS includes nine modules designed to integrate every aspect of the apparel supply chain, from product development to problem orders. Another plus is that NGC's solution can work with other PDM software, or Excel or Word documents.

"We've created a way to manage chaos and allow them to leverage the work they've already done," says NGC's Isenberg.

Geac's QuestPDM allows suppliers to build a view of how garments will be manufactured, allowing simulation of designs, costs and margins, and recording specifications for areas including sizing, labeling and packaging. "The brand-centric, consumer-led environment, with its many seasons and changing collections, means intense pressure to reduce the time it takes companies to bring a new product to market - speed and agility are paramount," says Michael Slipsager, managing director for Geac's RunTime business unit. Geac clients include Etam, Rossignol, RipCurl and Kenzo.

PLM is expected to be the buzzword in supply chain technologies for years to come. According to estimates by IT research firm Aberdeen Group, worldwide spending on PLM is expected to increase from $3.38 billion in 2001 to $5.12 billion by 2005.

In apparel, adoption is expected to be slow. As with any new technology, issues of systems integration, cultural barriers and maturing markets, among other concerns, will have to be dealt with by a combination of leading vendors and standards bodies. With the tough economy and retail climate, IT budgets are expected to stay conservative, and many companies will only be looking for solutions that can be quickly implemented and provide a quick return on investment. "They're really focused on solutions that solve where they're bleeding, and lead to cost savings," says PTC's Starr.

Indeed, for many apparel suppliers, it will take executive sponsorship, or a strong push from top management, to ensure an adequate investment and effort is made for PLM to work company wide. However, Optimyze's Johnson says she believes that for some companies, becoming quicker to market overrides many cost concerns.

"They're talking more and more on efficiency," says Johnson. "They want to learn about how they can cut five days out of their production time and how they can get goods to market more quickly. We don't even mention ROI anymore."

Suppliers can also learn from issues with implementing PDM, including difficulties gaining a high adoption rate from overseas suppliers. Designers also have been reluctant to fully embrace PDM because they typically don't like rigorous schedules and deadlines. "The front end is where the artists are, the designers and merchandisers, and they don't want that discipline," says Wilhelm. "There is still a lot of resistance from users so skill with implementation is extremely important."

Still, many believe the technology is available to solve some problems today. Matrix One's Gilmartin says companies should focus on "where they have the greatest pain today," and only extend it to other areas once they find initial success. "You don't do this on day one. You need to have a vision of where you want to get to, and then start small and scale quickly."

AMR's O'Marah says he believes it will take about three to four years before PLM becomes more ingrained in the apparel marketplace, and concurs companies should proceed cautiously. "They should just take it one piece at a time, and it will pay for itself. If you bite off too much, you'll look bad. Even if you don't have a problem with adoption, you'll have a problem with integration."

Adds Johnson, "At the end of the day, everything goes back to discipline and finding ways to manage change without it overwhelming you."

THOMAS RYAN served as a financial writer and editor for 10 years at Fairchild Publications, covering business issues of the apparel/retail industry for Women's Wear Daily (WWD) and Daily News Record (DNR). He is currently a free-lance business writer and columnist, and his work has appeared in Ale Street News, Footwear News, Multex.com, Sporting Goods Business and wwd.com. He can be reached at tel.: 212-598-9902 or e-mail: tomjryan@yahoo.com.

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