End-to-end visibility is becoming increasingly important and technology is helping with that

End-to-end visibility is becoming increasingly important and technology is helping with that

Working more closely and smartly with data across the entire supply chain is crucial if brands and retailers are to improve everything from product innovation to keeping track of shipments, 'testing and trashing' new ideas, and tailoring their offerings to individual consumers.

"We're very excited about what we're going to see in the next couple of years and it's really about the data," Anson Bailey, principal for business development at KPMG, told attendees at this year's Prime Source Forum in Hong Kong. "We're going to see a new era of machine data coming through. Everything is changing. We're going to see a rapidly changing landscape in the supply chain. And this pace of change means 'disrupt or be disrupted'."

According to KPMG, there were 15bn connected devices globally in 2015. By 2020 this is expected to reach 50bn. This increased connectivity is changing consumer shopping habits, and driving demand from brands and retailers for more predictive analytics.

New players such as Stitch Fix are also disrupting the market. Designed for busy women on the go, the start-up is an online personal styling service that selects and ships fashions tailored to the consumer's individual taste, budget and lifestyle. 

Even the established players are getting involved. Outdoor giant The North Face teamed up with Fluid and IBM for its recently-launched Expert Personal Shopper (XPS) service. Offering customers an interactive shopping experience, it aims to help fulfil shoppers' needs more accurately.

"Artificial intelligence might sound like pie in the sky but there are some really interesting things happening. It's scary, but it's happening, and it's happening now, not tomorrow," Bailey notes. 

Digitalisation

Further up the supply chain, however, there are also major headaches for many brands: What quality will the goods be in when they arrive? Will my shipment be on time? What is happening with my supplier and my KPIs? This is another area where digitisation can help.

"Getting poor quality is one thing, and it can be fixed. But finding out too late in the process is even worse," explains Stephane Boivin, co-founder of cloud-based supply chain solutions firm Pivot88. 

"The top current trends we're talking about are supplier costs and supplier time. By digitising at source, and standardising, we are improving the quality process. The lessons we learnt after digitalising millions of reports is: don't minimise change management. This is very important. Get commitment from the top management. You need to align processes. And, get everyone on board. Start with internal, if internal is not on board there is no point trying to convince your supplier." 

Boivin says supply chain visibility has become crucial to customers who want to know what is going on at each tier. 

"To see what is coming down the chain and being able to predict at the end if the quantity they ordered is going to be shipped on time is important. Collaboration is the big thing. Coming together is the beginning, staying together is progress, and working together is success."

End-to-end visibility

Another company embedded in the analytics of supply chains is Savi Technology, which works with companies to track their cargo from supplier to shop floor, and provides predictive analytics on timings. 

"Companies want to know two things: where is my stock and when is it going to get there? In today's world of end-to-end visibility, they are relying on milestone transactions," Jim Hayden, VP of solutions for Savi, told just-style. 

For apparel companies in particular, manufacturing to store is of particular interest, with the bulk of Savi clients wanting to be able to track a container once it has arrived in the country of delivery, Hayden says.

"They often lose track of it at that point," he explains. "There are some dark areas where they lose visibility. Has the container been unloaded from the vessel? Has it cleared customs? Is it sitting somewhere where I'm paying $40 per day because I don't even know it's there yet. Did the right truck pick up from the right location, is it going to the right place? Those are the types of things they care about on the manufactured goods side."

The problem remains, however, in complete end-to-end visibility of a supply chain – knowing where the raw materials have come from. While Hayden believes true end-to-end visibility is achievable, the challenge, he says, is not from manufactured goods outbound, but from the supplier inbound.

"There are a lot of suppliers out there and getting to the origin and being able to put the type of sensor you need on cargo where that material originates is one of the biggest challenges. But as sensors become cheaper and more affordable, you're going to start having disposable sensors that are $5 or $10, and eventually they'll start saying, hey, if you want to be my supplier, this is a process I need you to do."

Hayden believes intelligence in supply chain technology can grow further still, particularly in relation to predictive analytics. 

"We provide predictive analytics, which will tell a brand based on history that the shipment is scheduled to arrive in six hours but is not going to be there for another 12. What the world needs with analytics though, is for it to say: do this and don't do this. That's the end game with analytics; it's prescriptive, it's saying take these two asprin in the morning and you'll feel better. It's saying don't use this ocean carrier between November and December because they average nine days later in their shipments going to the East coast. Those are the types of things the industry is going to be looking for in the future."

Open Source

Another catalyst for innovation is open source, a platform that is increasingly being used by brands and retailers to encourage collaboration and new ideas. 

German sportswear giant Adidas recently said that a key pillar of its new strategic business plan was open source collaboration, partnering with people who are experts in their fields and inviting them to bring new thinking into the brand.

One start-up in this field is Techpacker, which offers a tool for fashion designers to develop faster, track styles, and work with factories. And CEO and co-founder Saral Kochar believes data is key to the future of fashion design. 

"Whether we like it or not, our [future] designers will be data and open source designers. They are going to be fashion coders, and they are going to be data designers.

"Of today's brands, who is designing? It's the buyers. They are reading reports and going to the fashion designers and saying, I want next season's collection to be in this colour and this fabric. It is the data that is making the decision. We need to equip our designers so they can test early on, they can show products and understand what the impact will be on the market."

Another, more established, outlet for innovation is Shanghai's Explorium. Launched in September last year, the project is a collaborative effort by Fung Group, IBM and brand activation company Pico, and serves as a laboratory for the rapid testing of omnichannel business strategies in a realistic environment.
 
It is located within more than 23,000 sq m (nearly 250,000 sq ft) of trade exhibition space at LiFung Plaza, where it provides a controlled setting for businesses to observe and explore in real time how consumers interact with new technologies, products and environments. Brands are also using Explorium to understand opportunities in China for their products and services, based on consumer feedback collected and analysed at the laboratory. Retailers are using it to test different store concepts.

And the reason Shanghai was chosen? Simeon Piasecki, lab director for Explorium at Fung Retailing Ltd, says it's all about the rise of the Asian consumer. 

"We believe the consumer here is going to be the most advanced in the future," he explains. "Wealth distribution is changing and 95% have smartphones, they are incredibly well connected, and they are now overwhelmed with choice. Retail is seen as a big opportunity." 

Indeed, the future of retail is in the merging of conventional retailing and e-commerce; enabling consumers to switch seamlessly between online and offline. In that respect, Piasecki says Explorium offers businesses an inexpensive way to experiment and understand whether their initiatives have got the key ingredients for success. 

"Analytics tells us what people are doing in our exhibition space. But what you don't see is the research and experimentation platform that enables brands to learn from every single consumer interaction that goes on in the space."

However, he warns: "We firmly believe businesses need to act faster, they need to test and trash in terms of trying new things, they need to create wider partnerships, and they need to work much closer and much smarter with data."