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Posted Date: 6/1/2003

Supply Chain Visibility High on IT Executives' Agendas

By Jordan K. Speer

Despite the rapid-fire pace of information technology (IT) advancement and an increasing number of solutions for handling almost every aspect of apparel companies' operations, IT executives participating in Apparel's 2nd Annual IT Roundtable say that a long road still lies ahead with respect to streamlining communications with trading partners and gaining visibility into the supply chain. Among other issues on their radar, IT Roundtable executives also shared their philosophies on the constant challenge of integrating multiple operations into one smoothly flowing corporate enterprise. Following are some highlights of the discussion.

Communicating with Trading Partners: Progress and Challenges

Apparel: How have you been working to improve B2B operations by using Web-based or other systems to exchange data with retailers and/or vendors? What are some challenges of this ongoing process?

Elias (Quiksilver): We attempted to do some collaborative work [with vendors] through a Web-based process, and ran into a lot of resistance and problems with it, basically because they're not as sophisticated as we would prefer them to be. . Our first attempt to deal with the contractors was through a Web-based file box, if you want to call it that. It was . client-light on their side, but [information] wound up being faxed back and forth regardless. The other problem we were running into is that it does put more work on our designers to make that information available in that form as well. . [However], we have been working with companies that already have a foothold in it, like our freight forwarder, Maersk, and Avery Dennison, in terms of trying to get into factories. They already have a presence there. We're finding that to be a little more successful.

Segal (Elie Tahari): To get around [the lack of technological sophistication at factories], we've had to avoid the factories. We had to have our agents do telephone or fax communications with the factories, and they have a way of interfacing into our systems from their offices. That was the only way we could get around it.

Scatko (The Children's Place): This is an area that's of high importance to us now, and we're currently in the middle of starting a project to try to bring more visibility to us into what's happening in terms of freight movement. We have several programs in place that deal with a freight forwarder, but we're looking to get more flexibility, so we're looking at various products, from vendors like Log-Net and GT Nexus, to give us that kind of Web-based visibility and flexibility, in terms of not being locked into a specific freight forwarder.

Merry (Jos. A. Bank): We try to go directly to the factory. In fact, we've got some factories that work solely on our product. And we really haven't come up with a single solution. We've looked at everything from STS' Momentis to some strictly manufacturing software. ... We have some factories in Asia that we don't have technology issues with, but a lot of our factories are in areas [where] they may have a PC to be able to do e-mail, but that's as far as you can take them. So we communicate in probably four different areas. We are trying to improve and consolidate it, but there doesn't seem to be a single solution out there for [the] specific problem [of] going directly to the factories themselves and managing our own piece goods. [With] freight forwarders, we want to be able to have visibility from the time we order the cloth to the time . [the piece goods are] shipped. It's quite a project for us.

Apparel: Are any of you experiencing problems that are the result of issues not specifically related to IT? For example, production schedules that are planned without regard for trim lead times, such as a zipper with a 16-week lead time? How are you handling the problems this poses for the supply chain?

Merry (Jos. A. Bank): We had a lot of those problems, and we tried to solve them with some good design software up front, where you can show the whole package at one time, and where there are actual graphic pictures and representations of what the design is, and try to back that into the lead times. But you really get in trouble in the areas that don't have the bandwidth to download huge pdf [files] or anything like that. Again, we tried to get in front of that with good design software. It solved some of our problems but not all of them.

Scatko (The Children's Place): Obviously we have many of the same issues because we are a vertically integrated retailer, so we're supplying the specifications to our end suppliers. We're attempting to deal with this situation through production management systems that we've developed internally, and we've gotten to the point where we're tracking various stages of pre-production work - sample approvals and things of that nature. It's obviously a big problem when we're trying to deal with buying fabric in China and having it shipped to wherever the manufacturing is going to take place. That's another issue that we're going to have to try and fit into our existing system, and into that supply chain visibility solution that we're trying to come up with.

Piecing the Network Together: Best-of-breed vs. Turnkey

Apparel: What are some decisive factors that have come into play recently in determining which software solutions you selected for your company's operations? How are you balancing a desire for the most integrated and smooth approach company-wide with the need for software that will best handle the particulars of each segment of your business?

Achtelstetter (Medi USA/Medi Manufacturing): The key factor for successful implementation . is to have realistic expectations and a realistic time schedule. Many times IT is in the position where management pushes a timetable really harshly, and that can really mess up the entire planning stage, software evaluation and implementation itself. . We successfully implemented a standard solution here. It's not perfect, but there is no perfect standard solution out there for any industry. But we've experienced that setting up a reasonable timetable and reasonable expectations helps a lot.

Elias (Quiksilver): I would second what Ralf [Achtelstetter] just said. Timing is everything. . We've elected to take a best-of-breed approach, in that we felt our company had a lot of different segments to it, and that each had different agendas, and one solution would only be satisfactory to one segment, and not satisfactory to another. . That said, timing is important. [Looking back on our] implementation of our warehouse management system, every end-of-quarter it gets pretty hectic down in the distribution center, and as a result of that, nobody wants to be thinking about implementing systems. The name of the game is shipping product. ... And every company is going to be different in terms of their culture, their background, their state of maturity and the maturity of the management.

Achtelstetter (Medi USA/Medi Manufacturing): Having said that we actually have a system in place right now, we know that in two or three years we will have outgrown it and are already watching the market as far as other solutions that are out there for us. Has anybody successfully implemented one solution from the big names out there, like Siebel or PeopleSoft or SAP, in the textile industry? And if so, were the costs really killing you, or was it fairly reasonable?

Simmons (Lectra): Speaking from the vendor side of the equation, we have just gone through a Siebel implementation in this past year, and we've had very good experience with it, very good results. What we've implemented thus far is the customer relationship management [solution], and then we have a phased timeline where we're actually integrating the back-end processes . as well as bringing SAP into the equation to handle the back-office [functions] and accounting. . We negotiated our contract at a corporate level for our entire company worldwide. Although they are expensive, [they] definitely paid for themselves in terms of return, and we have visibility now to our customers that we didn't have in the past.

Elias (Quiksilver): We're currently in the process of implementing i2's advanced planning and scheduling system for our T-shirt division. And that's expensive, no two doubts about that. But on the other side of the coin, just the process of going through the evaluation and looking at your operations . [in terms of gathering] good information, just revelation about how the whole thing works, as far as our processes are concerned - that, in and of itself, is almost paying for the system. We're also in the process of [implementing] PeopleSoft for human resources, and we expect to roll that out in the next few months, followed by the financial systems.

Segal (Elie Tahari): I put in SAP at J.Crew. . It's a very interesting system, if your company can work with an SAP-type application. Sometimes the benefits can outweigh the costs because it touches every aspect of the business. It's expensive, but you get a lot for it, if it works for you.

Lockdown: Keeping Systems Secure

Apparel: How have IT operations been affected by recent intensified focus on security issues?

Simmons (Lectra): One of the things we try to do as a service to our customer is to offer what we call remote expertise, which allows us to dial in remotely into systems, with permission, . and provide either software maintenance or software updates. . [Are] the companies that are participating today . amenable to allowing that kind of access on a case-by-case basis? [Do] they have situations like that with their other vendors? What are some of the pitfalls that might surround opening that up to a vendor?

Merry (Jos. A. Bank): We allow that. . [When] you call in, [your authority to dial into our systems] gets granted at a certain level, but we'll say: 'OK, you can have it for two hours,' and after two hours we automatically turn it off. So [access] doesn't exist until you get technically written authority to be able to dial in. With that written authority has to come an explanation of exactly what you're doing. As far as security in general, it's something we're extremely serious about.

Elias (Quiksilver): Actually there are two different issues here. One is [security regarding] access for vendors, [and the other is the cost of access for sales personnel]. For vendors, it really depends on the degree of the partnership that you have. There's a vendor we have on the East Coast. We're probably about 75 percent of their business, and as a result there's a fairly close relationship, and there's a higher degree of sharing of information, and therefore access to information, across our system. In that case, we've created Web-based access capabilities that are kind of surrounded, in the sense that it's a double-blind kind of [access] into my network. . The most secure network is one that doesn't have any access in or out of it.

[For sales reps], the issue is more of the cost of dialing in, as opposed to security itself. We hooked up with a company, iPass, that allows remote dial-in to local ISPs. There's authentication that happens both at iPass and then also on our system before it recognizes that person and allows them to come in, and then at that point it sets up the pipe for security. So it's a fairly significant issue for us, but there's a lot of effort and money that we put into trying to secure ourselves online.

Apparel: What are some of the most important issues on your radar? What are some implementations you are undertaking, or expect to consider in the near future?

Heffley (Retail Brand Alliance): We recently have purchased a product, Blue Cherry [from CGS], and we're in the process of that implementation cycle to handle a lot of our apparel and production development cycle all the way through the entire pipeline to ultimately our stores, so this is one of our biggest challenges right now. . Very shortly, we'll be implementing JDA's latest planning suite, and beginning to do upgrades to their latest release of Portfolio 2003, as well as implementing a new version of e3 for the replenishment cycle.

Jordan K. Speer is senior editor of Apparel. She may be reached at jspeer@apparelmag.com.

Editor's Note: This article does not represent all participants involved in the roundtable. Some participants requested that their names remain off the record for publication.

Avery Dennison InfoChain Express

508-383-4038 . ReaderLink #75

Computer Generated Solutions (CGS)

212-408-3800 . ReaderLink #76

GT Nexus

510-747-3200 . ReaderLink #77

i2 Technologies

412-276-5113 . ReaderLink #78

iPass

650-232-4100 . ReaderLink #79

JDA Software Group

734-887-4506 . ReaderLink #80

Log-Net

732-747-7699 . ReaderLink #81

Maersk

305-220-6660 . ReaderLink #82

PeopleSoft

925-225-3000 . ReaderLink #83

SAP

781-522-5263 . ReaderLink #84

Siebel

650-295-5000 . ReaderLink #85

STS, an NSB Company (Momentis)

514-426-0822 . ReaderLink #86

This list does not represent all suppliers in this area, just those mentioned in this article.

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