Agility: The Foundation for Supply Chain Success
By Ajay Chidrawar
As we see more large retailers such as Macy’s and Sears shuttering their brick-and-mortar operations, it’s becoming increasingly clear that consumers’ shopping preferences have shifted. Customers now expect a unified, personalized and “see now, buy now” shopping experience. This reality, along with models like Amazon that offer customers the right product at the right price with direct-to-consumer shipping, is pushing retailers to focus more on e-commerce. In fact, according to Forrester Research, online sales in the United States are expected to reach $523 billion by 2020, a 56 percent increase from 2015.
Because of this shift, many fashion, apparel and consumer product brands need to take a critical look at their distribution strategies, while at the same time reinvesting and refocusing their e-commerce approach. The instant gratification made possible by online shopping also leaves consumers anxious for new products to be released. In turn, retailers are also faced with shrinking windows to launch new products. Given these changing trends over the last few years, the expectation is for further transition in how people search, buy and anticipate product delivery. And, as brands tackle product launches, distribution and e-commerce, they need end-to-end supply chain operations that possess one key trait: agility. Companies that focus on agility will also be able to adapt more easily to any unforeseen changes – whether internal or external (e.g., consumer-driven, retail trends or government-mandated regulations).
Leveraging Technology to Meet Customer Expectations
Managing inventory to meet customers’ growing and changing demands requires agility and transparency throughout the supply chain. In looking to achieve this, there are a number of solutions that brands can leverage, including product lifecycle management (PLM), enterprise resource planning (ERP) and business integration technologies.
With PLM, brands can benefit from a comprehensive set of tools to manage and track the entire product lifecycle from design through development, samples and production. With a centralized data model, supply chain partners from designers and developers to raw materials vendors and factories can collaborate seamlessly, remove inefficiencies and latencies in the process and improve decision making. And, when combined with sophisticated workflows and end-to-end tracking, brands are able to shrink their product launch cycles while reducing costs and enhancing quality.
Another key aspect to ensure supply chain agility is leveraging business integration technologies such as electronic data interchange (EDI) and web service API-based interfaces. These technologies streamline communication among trading partners – retailers, wholesalers, manufacturers and distributors – enabling them to share information on orders, forecasts, point of sale (POS) data, shipment tracking and inventory in real time. Such immediate access allows brands to forecast inventory needs and plan more efficiently to meet consumer demand, and adjust supply where needed. For instance, POS data specifically provides insight into customer buying preferences, including which items are selling well, what sizes or colors of a product are most popular and where sales and returns are made. By leveraging this information, a dress manufacturer can make a more informed decision as to what item should be produced in the largest quantities and, with business integration technologies in place, communicate this to partners throughout the supply chain to adjust accordingly. If PLM is integrated with ERP, brands can also shift operations as demand requires without wasting materials, such as if customers are interested in one dress over another and they use the same fabric.
ERP plays a major role in agility – providing a single, holistic view of all inventory. ERP enables brands to analyze inventory availability and supply chain operations and make adjustments quickly and accurately to ensure products are delivered accurately through the right channels, and on time. Leading-edge ERP solutions also support complex workflows: accepting sales orders from multiple channels, performing allocations of available inventory based on complex rules, facilitating warehouse shipments and driving production orders on multiple factories and even tracking the production through its various stages all the way through receiving ASNs on when it would reach the warehouses.This ability to streamline operations is especially important as customer expectations for instant delivery of goods (re: instant gratification) continues to increase – even to go as far as same-day delivery with Amazon Now or Google Express.
With fast-paced, changing consumer demands, agility within the apparel, consumer goods and retail sectors is imperative. Having the right technology in place throughout the supply chain enables brands to communicate and collaborate within their own operations as well as with supply chain partners. This agility allows a brand to sense and respond to consumer demand and market changes quickly by leveraging all of its own assets and capabilities and its partners’. With the proper support for an agile supply chain, brands will be set up for success, no matter what customer demands or market changes they need to address.
Ajay Chidrawar is the vice president of global product management and customer success at CGS.