just-style management briefing: Software helps tackle industry issues
4 May 2011 | Features & Interviews | Source: Leonie Barrie
Using the right software is key to helping the apparel industry tackle some of the issues it faces in 2011. Firms need the right analyses and information to take the right decisions at the right time and remain competitive in a changing environment, from product development through to the shop floor.
Bob McKee, industry strategy director for fashion, Lawson Software
The challenges of the apparel industry today are more about the business than the style, and we believe there's no way to do it without technology. The ability to test, read the results, react, re-test, re-order, re-test, re-read and so on can only be accomplished with the use of proper technologies.
It's not about one over arching 'magical' technology, it's not just POS or Retail Management, or ERP, or Financial Software, or PLM, or Business Intelligence, it's about all the components working flawlessly together to make information available as it's needed to make the decisions as they are needed - to get the product in front of the consumer as and when they are demanding it.
Software support is critical to adapt to the fundamental changes in the structure of the industry and to remaining competitive:
- Analytics to understand your market, costs, opportunities and to take better decision at the right time.
- Product Lifecycle Management to speed up the development of the right products.
- Integrated financials and costing for the management of costs, monitoring of margins and simulation of alternative sourcing options.
- Reduce unnecessary tasks and automate others to ensure a lean supply chain, improve operating efficiencies and get the right product to the right place that the right time.
- Inventory control and visibility to deploy hedging strategies, avoid tying up unnecessary capital, reduce the need for ticket price markdowns and minimise risk.
- A platform to support new business models as companies evolve new channels to the consumer (multichannel sales).
On the issue of sourcing, it is not about low-cost production. It's about streamlined and best practice processes, supply chain visibility and effective IT systems that can help you control the inventory in your supply chain and reduce your landed costs. You need the right analyses and information to take the right decisions at the right time.
Simon Blower, director at SD Retail Consulting
In today's mobile, multi-channel world, retailers really need to engage in meaningful dialogue with consumers. This largely requires using technology to understand where the consumers' mind is and to communicate with them. Software and technology is the key here: whether it be on the shop floor, on the web or on the phone, today's consumer wants to be connected. The retailer needs to be connected too. Utilising software to access the consumers' world and to listen to what they are saying is a key technology trend in the next couple of years.
Turning insight into demand forecasting is also critical. Here too technology has an important role in being able to spot trends and act upon them quickly. Demand forecasting is not new, but today's leading edge software uses highly sophisticated data management systems and demand algorithms to identify trends in underlying demand. The clever bit is in integrating this to the supply chain and encouraging suppliers to collaborate with retailers to deliver just-in- time, cost effective demand fulfilment.
On the supply side, managing the cycle of product development through to the shop floor is where software and technology can really make a difference. Reducing cycle times, markdowns and generating improvements in gross margin through better and more effective supplier management should all be key tasks in the coming year. Using 'product lifecycle management tools' can transform the complex supply chain - making it simple, transparent and effective to operate.
Chris Groves, President and CEO, Centric Software
Software can help by facilitating relationships with suppliers. Besides suppliers moving business out of China (which is already happening, although looming capacity concerns circle back to China), they will need to develop a new level of partnership with trusted suppliers. Software that makes processes easier and more streamlined helps tie existing Chinese suppliers into longer-term, deeper relationships, and will help brand owners maintain priority positions.
Supply chain technology - including PLM technology - can go a long way toward increasing the productivity of a manufacturer's worldwide network. This is especially true for PLM technology that can provide fast implementation, short-term measurable results, and specific capabilities for a global supply chain. These can range from translation capabilities to some of the newer mobile apps that link product development closer to the buyer and consumer than ever.
Apparel companies are also finding that the closer product development is to the consumer, the faster and more accurate the development process becomes. Technology that facilitates this - including both hardware and software associated with mobile technologies - will change the way the fashion industry works.
In the PLM arena, we at Centric have gone as far as introducing an iPad app that allows fashion houses and designers to present their collections to buyers significantly faster and more accurately. The Collection Book for iPad app is letting designers incorporate last-minute updates into collections, permitting corporate and retail buyers to specify, customise and place accurate orders on the spot, and reducing finished-garment delivery time from weeks and months to just days.
Software can also help provide instant visibility. When chief merchandising and finance officers have software that allows them to look at this year's targets for margin or gross revenue, review supply chain and channel commitments, and know instantly if the season will be a success, they can steer a company effectively.
And it helps apparel companies operate more efficiently and productively. As pressure continues for companies to be ever more efficient and productive, PLM software has proved to improve collaboration and productivity throughout the product development process. Companies using PLM systems know that their teams around the world are working from one central, accurate set of information. Instead of the product development process relying on spreadsheets and e-mail messages, PLM provides "one single source of truth" from which to manage multiple product lines, across multiple seasons each year, quickly and accurately.
Susan Olivier, director of retail, footwear and apparel market development, Dassault Systèmes Enovia
Increasingly, winning brands and retailers are leveraging the power of Product Lifecycle Management (PLM) beyond a 'single version of the truth' to identify material, component and supplier opportunities. They are comparing not just cost options between multiple sources, but the value of cost versus speed. They are also leveraging inputs from their global supply base, where the best source of ideas on new technical materials and design concepts often comes from the finished goods and raw materials suppliers themselves.
Mark Burstein, president of sales, marketing and R&D, NGC Software
PLM systems directly address many of the apparel industry's most pressing issues. Take the cost of raw materials: today's web-based PLM systems help companies closely manage their raw materials with sophisticated materials management capabilities that allow instant visibility into materials requirements, purchases and inventory at remote locations.
For example, NGC's PLM offers functionality to forecast raw material requirements, place commitments with multiple suppliers, and draw down those commitments as POs are issued and the materials are consumed. By using this PLM capability, one well-known fashion brand not only locks in raw materials costs for each season, but has also improved speed to market by three weeks and reduced markdowns by 33%.
Another important part of this is the ability to make just-in-time decisions. PLM systems provide visibility onto the factory floor, enabling companies to make their go/no-go decisions based on the most recent sales information. The most sophisticated PLM systems can track sales at the SKU level in real time through built-in interfaces to ERP, POS and other enterprise systems. By using the latest sales figures and postponing their final production decisions until the last minute, companies can allocate their materials to the hottest sellers and quickly cut their losses on slow-moving products.
Charles Benoualid, vice president, research and development, Visual 2000 International
To help solve today's challenges, information technology breaks down time and language barriers by enabling improved communication and collaboration. For example, PLM software empowers globally dispersed teams to work together to innovate with new fabrics and products while significantly reducing product development cycle time.
When integrated with PLM, sourcing and supply chain solutions keep everyone in the supply chain up-to-the-minute on product changes, process timelines, and early indicators of any exceptions to the plan. Today's technology is more collaborative in nature than ever before. This allows teams and partners to chat in real-time no matter their time zone.
Andy Lynn, vice president business development, RLM Apparel Software In the front-end design and development departments, PLM and other software technology can help companies budget and track costs, make timely decisions on the feasibility of creating additional samples, or dropping a particular style from the line based on cost projections. This also provides improved cash flow visibility on fabric inventories and all other components and processes.
With an integrated system, all of the pre-production information is fully and immediately available to sourcing and production teams. Supply chain execution and warehouse management solutions help companies ensure that all necessary components are on schedule and that orders are accurately filled and delivered on time.
In summary, the best way to ensure efficiency and compliance today and into the future is through aggressive use of information technology.
While fashion companies do face some difficult challenges, the good news is that technology is available to support and improve virtually every supply chain process. Given the fashion business environment and the mounting requirements for success, today's winners have come to realise that technology is essential. They know that hiring more hands on deck isn't going to solve the challenges of our industry going forward.
Paul Magel, president, Applications Solutions Group, CGS
The challenging business conditions of the past few years highlighted for many fashion companies the functional gaps and lack of process control that they were experiencing with their business systems. As a result, many of these companies have recognised the importance and power of fully integrated solutions.
Just as important information can be lost in language translation, key business data can be lost when systems are poorly linked together without an eye toward the holistic needs of the enterprise.
Companies are learning that having "interfaces" does not necessarily mean they have "integration". System modules that are built to fully integrate with each other offer complete concept-to-consumer and shop floor-to-showroom visibility and control. This allows companies to know the status of their products, orders, and process at all times.
In this consumers' market, technology that supports improved merchandise planning and replenishment can be invaluable to fashion companies. By integrating point-of-sale information, business analytics, and multi-channel forecasting and planning, these systems enable companies to answer the all-important questions of what merchandise, at what locations and channels, and when.
Cloud computing represents another interesting opportunity for a variety of software tools such as collaboration, customer relationship management, and more. While comprehensive ERP solutions may not be best implemented in this environment, companies of all sizes can benefit from the low infrastructure costs and upfront costs that this technology platform provides.
Paul A Friedman PhD, founder and chief visionary, Fashionware Technologies
More than ever before, PLM providers need to adjust their focus to the end-user. People that use a PLM application are multi-dimensional and multi-tasking. They need to have flexibility to use the software in real-world situations; such as using the application into the field to make notes, check specs, send emails, and add details.
This raises the software standard of 'ease of use' to enabling end-users to comfortably update information in real-time; thereby saving significant time and money.
Philippe Ribera, group software marketing director, Lectra
The first challenge facing firms this year will be to maximise overall productivity. Indeed, productivity gains are a key element of the growth equation, and studies have shown they depend more on technological changes than any other factor.
Supporting the end-to-end value chain of a product and its related business processes, both up and down stream, with an enterprise system such as PLM, requires structured processes that will eventually be digitised into the system. When implementing solutions we often review all of a customer's processes to ensure perfect optimisation and, consequently, total efficiency once integrated into the system. That's usually a perfect time not only to optimise a given process but also to entirely re-engineer it. This is what we call "process innovation": the first stage in streamlining processes and efficiency.
Providing full advantage is taken of technology such as PLM, there will be substantial benefits from enhanced collaboration and decision-making throughout the value chain that will help users to respond faster and more accurately. PLM functionalities, particularly those related to sourcing and planning, can support decisions taken by apparel companies looking for efficient deliveries that reflect fast fashion trends in a price and value sensitive environment.
A strong corporate differentiation strategy will also strengthen a fashion firm's competitive advantages. The effects of market volatility and supply chain uncertainty can be reduced through PLM and new technologies (3D virtual prototyping, enhanced what-if costing scenarios, raw material forecasting, improved visibility into product status and inventories). Scarcity of raw materials may impact final price as well as deliveries, especially for fashion companies with short lifecycles.
Moreover, government regulations and taxes are designed to encourage fashion firms to manufacture greener and more socially responsible products. Compliance has to be built into the design and development of the product, and PLM systems will be central to strengthening production cost control while meeting more stringent regulations.