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Posted Date: 5/1/2003

The Many Faces of Supply Chain Management

In today's apparel industry, as many companies focus on their core competencies and outsource the rest, the ability to compete lies in the efficiency of complete supply chains, not indivitual companies. Finding success are those companies that not only optimize their own internal operations, but also streamline processes that they share with their partners, both upstream and downstream. Here's a look at how Fresh Produce, Delta Galil and Brown Shoe are working to improve their supply chains, along with free-lance contributor Anthony Coia's take on the logistics infrastructure south of the U.S. border.

Fresh Produce Sportswear, which debuted its fashionable screenprinted T-shirts and custom jewelry at the 1984 Olympic Games in Los Angeles and was founded by college sweethearts Thom and Mary Ellen Vernon, is today a $52 million company and one of the most well-known resort wear brands in North America. It offers colorful, comfortable and "coastally inspired" women's and children's clothing and accessories sold by more than 800 specialty and resort retailers as well as major department stores and resorts, including Nordstrom and Walt Disney Parks.

Fresh Produce, which sources all of its manufacturing domestically in Southern California, also founded a retail division in 1994. With two licensed stores and 14 company-owned retail stores in coastal resort towns and exclusive shopping areas, the company has plans for 10 more company-owned marquee locations, as well as new lines and new divisions where it seems fun, challenging and profitable, the company asserts.

Indeed, this growth has been great for the company, but not for some of its older IT platforms, such as its ERP system, which is not scalable or reliable, and has an outdated database, explains Sean Sweet, vice president of operations. Under its current system, Fresh Produce cannot track raw materials, which include a lot of domestic cotton knits, as well as some woven fabrics from overseas. "I have to export the data and basically manipulate it with Excel spreadsheets . spending many, many hours per week . keep[ing] track of raw materials," says Sweet, adding that the old system also does not provide good WIP tracking ability.

As such, the company is in the process of moving away from its older platform to implement Computer Generated Solutions' (CGS) Blue CherryT Enterprise, which among other things will provide a better user interface and improved support, says Sweet. The implementation, which should go live in July, is progressing "very smoothly," due in large part to CGS' team of professional consultants, he adds.

What are some of the benefits of Blue Cherry? For one, it is a single-source system that can handle multiple aspects of Fresh Produce's computing needs, says Sweet. Its database structure is strong, he says. It runs in a Microsoft NT computing environment on an SQL server database, which is scalable and can "basically handle anything . as my company grows and my needs grow, in terms of data size and support and users," he explains.

Blue Cherry's "biggest feature" is automating reports and work processes - a huge time and labor saver, stresses Sweet. Another huge plus is that the system can flag exceptions.

Overall, orders will be pushed through the system faster and more efficiently, with contractors having access to updated information such as cutting tickets and job status via e-mail. Down the road, Sweet foresees giving network access to some of its key contractors.

Interestingly, Fresh Produce is also a current user of CGS' Virtual ShowroomT for sales force automation - which "integrates seamlessly" with the ERP solution - as well as its new Solomon financial package for accounting, Sweet says.

Going forward, Sweet is planning to implement CGS' PDM package - currently in development, due in part to his "push" for such a tool - to help track prototype development costs as well as to integrate and automate some design processes.

Sweet's other goal is to integrate the company's retail point-of-sale systems with its manufacturing system. Right now, the retail division - which accounts for about 15 percent of sales - creates orders in its system and then has to duplicate the process to enter orders into the ERP system. "This is something that's important to a lot of manufacturers, because as more and more manufacturers get into retailing, whether it's just outlet stores, or even opening their own stores . having tight integration of systems between retail and manufacturing would be very desirable," he concludes.

Delta Galil Industries Ltd., headquartered in Tel Aviv, Israel, is a global manufacturer of ladies' intimate apparel, men's underwear, socks, infants' wear, leisure wear and fabrics, sold to brands (such as Polo Ralph Lauren, Donna Karan, Calvin Klein and Victoria's Secret) and retailers (such as Marks & Spencer, JCPenney, Gap and Abercrombie & Fitch) worldwide.

The company has manufacturing facilities around the world, including those in Israel, Egypt, Turkey, Romania and Scotland, and marketing centers in Israel, France, Spain, the United Kingdom and United States. Between 1995 and 2000, Delta doubled its number of employees to 10,000 and grew annual revenues from $257 million to $355 million.

Furthermore, its global expansion has been abetted by recent acquisitions of Canadian sock maker Dominion Hosiery Mills, U.S. private label manufacturer Wundies Industries and U.S. ladies' intimate apparel producer Inner Secrets.

Integrating so many companies, countries, currencies, languages and processes is a challenge to any supply chain, but the company got an early start to setting up efficient operations for its supply chain in 1996, when it started implementing Intentia's Movex solution, says Avi Pinhas, CIO. At that time Delta was mainly a vertical manufacturer with some outsourcing activities and offshore production activities in a few other countries. Today, Delta is operating in more than 20 countries. "It is an enormous challenge to plan, control and manage all [the] activities," Pinhas says. "This is our main mission as IT: to support Delta's needs."

Three Movex tools that have greatly enhanced supply chain performance include the MSP multi-site planner, which allows Delta to plan operations with finite or infinite capacity, provides an overall picture of similar production lines at different sites, allows the company to adjust production centers as necessary, simulates different scenarios and evaluates each plan.

The second tool, currently in the implementation process, is the SCP supply chain planner, which addresses "tactical and strategic time frames," says Pinhas. "This tool allows us to plan our production and logistics from the next season and on, helps us make better decisions on building capacity, allocating production of certain items to certain countries in accordance with related costs, equipment availability, transportation, customs, etc."

The third tool is DMP demand planner, which the company has not yet implemented, but which will allow Delta to better plan for demand and thus lead to better planning along the entire supply chain, explains Pinhas. All three tools are tightly connected to its Movex ERP system, he adds.

As for the company's acquisitions, the complexity of bringing new companies into the enterprise has varied according to the size and nature of each. For example, Delta recently acquired a logistics facility in Hungary, which has been "relatively simple to handle," as it belongs to the company's Europe division, which is fully using Movex. "In this case we've just implemented the same procedures of the division and brought the new facility in," says Pinhas. On the other hand, recent U.S.-based acquisitions have first required merging the two new companies and aligning their operations, followed by a new IT implementation (the company used Implex, Intentia's implementation methodology), currently underway.

As for real-world benefits, Pinhas points to intra-company shipments as one example of how Delta Galil has gained greater visibility into its supply chain. "We have a huge number of shipments at any point in time between our facilities. In the past there were no electronic notifications of expected shipments and their contents, nor overall knowledge of what was on the way. Now, [for] each and every shipment between facilities that are already managed using Movex, we know exactly when the shipment left, where it is destined, expected arrival date and exact content, and the receiving end has the information already in the system, so handling goods is much quicker," he explains.

While the company still has plenty of room to improve its communications with suppliers, Pinhas notes that for several years now many of the company's subcontractors have plugged into Delta's server over the Internet to get manufacturing orders, report manufacturing activities, download and print barcodes and to prepare and send shipments.

What's next? Pinhas' goals for the near future are in two areas: product development and work flow management. Delta is part of a pilot program for the former, and has not yet tackled PDM, he concludes.

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