Supply Chain Visibility

Extended supply chain visibility is the prized application for Bon-Ton, Perry Ellis and other stellar retailers that source overseas amid heavy regulations, quality issues, fluctuating overseas markets and an incoming administration that will influence the U.S. trade paradigm.

To survive, aggressive retailers are managing an exploding number of data points as they push suppliers with more stringent sourcing practices. They've armed themselves with visibility tools that slice into data along every stage of the product lifecycle, from design through production and delivery, and in the long-run, help them find and keep dependable supply partners.

Brand Protection
Especially as private label programs continue to increase in importance, retailers are working harder and smarter to protect their brands. Sourcing systems that provide real-time, end-to-end tracking of the product lifecycle help ensure data and operational accuracy, maximized production efficiency, product quality, open communications and efficient delivery. They allow retailers to seize, manage and produce detailed reports about the current status of various supply chain data points. With less time spent on chasing data, more time is devoted to core decision making.
 
Sourcing Challenges
Among the issues facing both private and branded labels is managing the long and sometimes uncertain product lead times for items sourced from low-cost countries to be sold in more established economies.

In addition, "ensuring product compliance with both retailer and sales country requirements has become more challenging," says Julie Fraser, principal of Cam-bashi, a research analyst firm.

"The use of global trade management solutions are increasingly critical to ensure compliance and get through customs smoothly," says Fraser. "Retailers are seeking suppliers that will provide certification of compliance to their specifications, governmental regulations and pending decrees. For example, Wal-Mart is
asking suppliers to complete a Carbon Disclosure Project questionnaire. RFID, special labeling and packaging requests of suppliers are also coming into contracts."

With the onset of a global economic slowdown, many retailers use global sourcing tools to help their buyers make sound supplier selections as well as consolidate spend and rationalize the product lines they carry. They are fighting margin erosion with suppliers who are willing to work through the collaboration and visibility tools that will help ensure compliance, reduce cost and drive revenues. 

Success in Sourcing
Bon-Ton gains improved supply chain efficiency with "a system that helps us pick the right merchandise, get it here on time and offer it for a good value, without manually managing the data associated with hundreds of suppliers receiving orders and sending freight from around the world," says Chuck Gilreath, VP of sourcing, Bon Ton. To manage and execute each step in the private label manufacturing process, optimize relationships with trading partners and maximize visibility into workflow process, the 281-store chain uses ecVision's Xpress Commerce, a role-based, workflow-driven collaborative tool combining product lifecycle management and supply chain execution capabilities.

The key benefit, says Gilreath, is visibility. "We have end-to-end visibility of the hundreds of vendors interacting with us throughout the ordering, production and delivery process. For example, if a scenario changes, we see it reflected moments later on the purchase orders vendors are viewing. We no longer rummage through piles of faxes and hope we have the most up-to-date information on shipments."

The Web-based application also minimizes potential vendor errors by producing shipping case labels, commercial invoices and packing lists with few field changes allowed and provides "a reasonable cost solution for vendors to comply with the required paperwork," says Gilreath. "We desire long term relationships with vendors who can toe the mark in performance, and where ethics and accountability emanate from both sides of the table." 

Perry Ellis employs an in-house system for sourcing its branded products -- including Axis, Farah, Nike Swim and Jantzen -- manufactured in 26 countries and sold in thousands of retail locations around the world. In 2008, the company imported 65 million units, for which production aspects are monitored by the in-house, online "work-in-progress" tracking program that reveals sourcing rudiments triggered by the purchase order, such as lab dips, strike-offs, bulk fabric placement, quality control testing and pre-production samples.

Perry Ellis uses Enterprise Resource Planning from Jesta I.S. to categorize the millions of units produced each year, including the sourcing company, factory, brand, style, color and size. The module provides a comprehensive view of where business is placed, better management of supply and demand, optimized delivery of available merchandise and a tool for prioritizing the allocation of inventory.

According to Brad Arkin, EVP of global sourcing, Perry Ellis, those overseas suppliers most likely to survive -- especially in fluctuating economies, such as China's --are the ones also investing in management technologies that enhance efficiency, eliminate expensive mistakes and keep them in-sync with agents and sourcing offices. Technology-equipped suppliers better manage order details, produce garments faster and make the most dependable supply partners.