Software solutions: ERP systems offer apparel-specific options
By Lee Adendorff | 1 July 2013
Enterprise Resource Planning (ERP) software solutions have become powerful and numerous, allowing apparel companies to manage vast amounts of complex data under one umbrella, from finance, stock and manufacturing processes to distribution.
Driven by the need to leverage this information and obtain even greater precision and speed in time to market, in recent years many ERP packages have come to include modules specifically tailored for the clothing industry, either as an add-on package or an integration with a Product Lifecycle Management (PLM) system.
In the United States, Mark Burstein, president of sales, marketing and research and development at NGC Software, said company size and scope were key drivers in acquiring an ERP system, regardless of where a business might be located.
"Most small start-up companies begin with a combination of Excel and [accounts system] QuickBooks. However, if business is good, they will outgrow these tools very quickly.
"For a company with annual revenue greater than US$5m, it is almost impossible to efficiently manage purchasing, inventory, shipping, distribution, and accounting without an integrated ERP system. Once the company starts selling to customers that require electronic data interchange (EDI), an ERP system become a requirement," he said.
Epicor, Infor (which bought Lawson in 2011), NGC, SAP, Microsoft Dynamics and Oracle are among the principal ERP brands on the market, and most of these providers are now courting apparel companies with specific solutions.
SAP, for example, a German-based multinational, is one of the biggest software producers in the world and develops core ERP software for industries that range from technology, aerospace and food to service industries. SAP offers an apparel and footwear solution (AFS) based on its Business One ERP package. Its features handle specific managing needs of the apparel sector such as size and seasonality together with other core ERP functions.
Competitor Oracle likewise promotes the JD Edwards EnterpriseOne Apparel Management solution as a module for its ERP system that offers specific features for the apparel industry. The module is based on 'attribute management', allowing a user to see an item from several different points of view such as size, seasonality or style.
Italy-based specialist software provider Porini has developed an apparel and textile module for the Microsoft Dynamics AX platform, part of the ERP suite of Microsoft products. The Gartner Group in a recent study rated Microsoft Dynamics AX and SAP Business One as "visionary leaders" among the multitude of ERP solutions, especially for mid-size companies.
Porini's channel manager Giuseppe Ghisoni said he recommends looking for solutions that have been deployed in companies with similar attributes and structures. "I think it's more important to look for businesses that are similar to yours and that have similar ERP needs, [rather] than their geographical location," he said.
"People should ask themselves: what is the technical stack (database, communication tools, languages, productivity tools) the guarantees me the best performances and the best company efficiency?"
Two- or three-tier ERP
ERP customers are as diverse as the solutions themselves and infrastructure models also vary considerably, especially among companies that may be dealing with subcontractors or subsidiaries based abroad with differing currencies or reporting requirements.
Deploying technology in these situations can be expensive, and companies are often facing integration with the legacy systems of their external contractors or business units.
A solution is to utilise a two-tier or even three-tier ERP system, where compatibility with external, and at times outdated, systems is essential.
A two-tier ERP approach, for example, might involve the installation of a central system such as any of those mentioned above, with satellite business units using either their own compatible legacy systems or a compatible system that can be served through a cloud. Cloud-based software-as-a-service (SaaS) is a growing trend in the delivery of ERP solutions, now being offered by all the major ERP software providers.
IT talent in India
One good source for ERP systems is India, with its large pool of talent experienced in IT and information technology enabled services (ITES). With costs being low, they are able to provide ERP solutions that cater to the specific needs of a client. Such customisation can be important given the wide variety of working methodology in the textiles sector.
"Nowadays, we give SMS (short message service) alerts, email alerts to make the system more interactive with the users. And it is 100% flexible since we do customisation according to the customer's needs," said KG Sowbhagyawathi, vice president of operations at Axon Infosoft India Private Ltd. Axon is a software provider from southern India.
Meanwhile, Sateesh Gururajachar, CEO of Bangalore-based Lamp Software Private Ltd, provides ERP solutions for the fashion and leather industry. "Indian ERP solutions are used in the manufacturing rather than retailing sector and are popular in manufacturing hubs in Asian nations like China, Bangladesh and Sri Lanka, the Middle East and North Africa," he told just-style.
He stressed they accommodated the management flexibility of outsourcing companies: the kind of business discipline required to use software supplied by SAP and Oracle, for instance, is rare in emerging markets. Hence, these solutions do not work well there, he added.
One risk avoided by some Indian suppliers is a lack of relevance caused by programmes being written by IT professionals and used by the textile or fashion industry: both sides lacking sufficient knowledge of the other's field. Popular ERP solutions developed in India are written with IT and textile industry experts working in tandem, said Gururajachar.
Click on the links below to read other articles in this management briefing:
Software solutions: PLM becomes more sophisticated and connected
Software solutions: ERP/PLM use grows in emerging markets
Software solutions: New tools develop in diverse directions
With additional reporting by Mini Pant Zachariah.
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Software solutions: ERP systems offer apparel-specific options