Join Management Dynamics at this year’s CSCMP Annual Global Conference, in San Diego, September 26 – 29. In addition to ample networking opportunities with supply chain professionals from 33 different countries, this year’s conference will feature tracks on the latest issues in supply chain metrics, sustainability, and new trends and technology with hundreds of sessions to choose from.
While at the conference, please be sure to check out our session “Advanced Visibility Solutions for the Retail Supply Chain,” which we are co-presenting with Abercrombie & Fitch:
Abercrombie & Fitch that once outfitted Ernest Hemingway and Teddy Roosevelt for safaris is now challenged to globally orchestrate product deliveries with carton level visibility according to precise schedules to over 1,100 stores in the US, Canada, and Europe. In this session A&F will present a case study that details the implementation and results of integrating a new supply chain visibility solution.
For more information or to register for CSCMP, please visit the conference homepage.
“Improving visibility” is often one of the top three priorities of supply chain executives to improve the performance of global operations. Here are ten tips to capture the benefit:
1. Accommodate Multiple Fulfillment Models. Visibility solutions need to be highly configurable to accommodate all of the various fulfillment models in operation across the enterprise. Domestic supply chains with three handoffs and a cycle time of less than a week are much different than an international supply chain that involves 12 – 15 handoffs and two border crossings. Supply chain visibility solutions that are flexible enough to accommodate multiple fulfillment models allow benefits to accrue across the enterprise and not within a specific product line or operational model.
2. Create an ‘Information Hub’. Visibility solutions not only extend processes outside the four walls, but must integrate and aggregate key information from within the four walls of the enterprise. The ‘Information Hub’ creates a one-stop-shop for key order, shipment, and inventory information from all internal ERP, TMS, WMS and other inventory planning systems. This expands the number of supply chain processes that can be managed by Visibility and ultimately improves productivity by eliminating ‘sneaker nets’ and re-keying of information..
3. Don’t Assume Data Quality. Aberdeen Research recently conducted a survey and discovered that only 16% of Visibility implementations have data quality above 91%. The other 84% of companies surveyed must clearly be challenged by user adoption. To achieve the value from a visibility solution, users must have confidence that the information is both timely and accurate. State-of-the-art Data Quality Management is comprised of complex rule-based systems to cleanse and standardize information and analytical tools to monitor, troubleshoot and resolve data quality issues using Six Sigma principles.
4. Use a Proven On-boarding Process. Data quality starts at the source and successful Visibility implementations often use an on-boarding service that is based on a careful assessment of information requirements and leverages existing integrations from an established network of transportation, logistics and brokers to certify new connections.
5. Postpone Inventory Allocation Decisions. Many leading companies are using Visibility to track shipments to an SKU level. This allows them to treat the container as a ‘floating warehouse’ to implement inventory diversions through a transload facility or to and to postpone all inventory allocation decisions to just prior to Entry. Given long order-to-deliver cycles, this ability to manage in-transit inventory can reduce days inventory on hand and stock-outs.
6. Push Visibility Back to Origin. Many initial Visibility implementations are based on ‘where’s my stuff’ shipment tracking at a container level. Savvy companies, however, are expanding their Visibility systems by linking orders to shipments and managing in-transit inventory. New CBP regulations such as 10+2 create much more accountability for the importer and kicking off a new wave of investment to push visibility back to the origin. Many of the “10” data elements are related to the supplier, the seller and where goods were loaded – all information that can be collected from origin operations.
7. Finally Manage Trading Partners with Scorecards. The by-product of operational Visibility is a rich repository of supply chain data that can be aggregated across the enterprise and with all trading partners year after year after year. Using leading Business Intelligence tools, scorecards to manage supplier compliance, or transportation booking performance can be easily developed. Since Visibility reduces tactical firefighting, the purchasing, logistics and customer service teams can redirect their efforts to continuously improve global operations.
8. Track Landed Costs Along the Chain. Aberdeen reports that companies that implement visibility are twice as likely to reduce total landed costs over the past two years. Many companies use Visibility to track product, freight and insurance costs as well as integrate trade compliance information such as duties, tax, VAT and other governmental charges. By seeing how costs build and monitoring variances to budget, companies can focus efforts to target cost overruns
9. Use Triggers to Automate Handoffs. Visibility solutions today are evolving from monitoring tools to execution systems. Leading companies are using ‘triggers’ based on supply chain events to plan warehouse receipts, to schedule a pickup, or to alert that the free-time will expire on a container. These triggers create tremendous value by compressing cycle time or helping to reduce the costs associated with demurrage and detention fines
10. Become Your Own 4PL. Visibility is now considered to be a critical and strategic information asset. Leading companies are implementing the infrastructure and deploying new value-added services to their business units and ‘plugging in’ logistics provider partners; in short, they are becoming their own 4PL. The advantage of this model is that all trading partners integrate to one standard and are managed at both a tactical and strategic level. In this way the central logistics team controls all information assets and the delivery of value-add services to their constituents. Perhaps “I am here from Corporate and ready to help” can take on a totally new meaning in your business.
According to a recent survey done by Tompkins Supply Chain Consortium, companies are now more likely to have executive-level supply chain leaders. Nearly half of the retail and manufacturing companies who responded have a supply chain leader at the executive vice president level or above (the chart below shows a breakdown by industry.)
The executive director of the Consortium explains this increase in an SDCExec article:
“With supply chains becoming more dynamic and agile, organizations need to able to keep up with the pace,” says Bruce Tompkins, executive director of the consortium and author of the briefing. “And these companies are beginning to realize the significance of having a high-level supply chain executive influence their business strategies.”
Companies seem to be realizing that the supply chain can be a fundamental value driver in an organization, but in order for this to happen, procedures need to be in place across the board to ensure the entire supply chain runs as smoothly as possible. By having a voice high up in the executive level of a company, supply chain teams can ensure that supply chain management tactics are taken into consideration when operational decisions are made.
Although this is progress, some companies still have improvements to make when it comes to collaborating: about a quarter of the respondents said they have no formal process for aligning supply chain goals. If a company is large and has several different business units, it can be a problem if these units don’t communicate with one another. Even if each unit has its own supply chain, it will benefit everyone to share ideas and best practices.
There are many vendors claiming to enhance supply chain visibility, but not all products will advance an organization’s goals. This expert e-book from TechTarget & Management Dynamics defines the supply chain visibility challenge and provides an overview of the different types SCM technologies and solutions available.
Gain a full overview of the many kinds of SCM technology available today
Solve the supply chain visibility challenge
Justify and make the case for SCM technology investments
Understand how compliance is driving the need for greater supply chain visibility
Download our complimentary eBook today, and gain a better foundation for managing your supply chain and improving visibility with suppliers as well as within your organization.
The Wall Street Journal has a great article about the green sustainable global supply chain - specifically within the apparel industry – describing a new tool for consumers to determine how green their products are.
“How Green Is My Sneaker” describes a new software tool, developed by 100 retailers and apparel manufacturers, can determine the “Eco-Index” of their products. The tool calculates the score from a series of questions answered by the company and its suppliers:
The Eco Index, which is basically a software tool any apparel maker can use, poses a series of questions to companies on their environmental and labor practices—some of which require answers from the companies’ suppliers. It then assigns a score representing a percentage of a perfect score.
The questions cover every step in the life of a product, from raw-material production to manufacturing, shipping, and even disposal. For instance, Levi’s gets points for having a recycling program that lets consumers drop off their old jeans at Goodwill, and Timberland earns points for using leather tanneries that have wastewater-purifying systems. Points are lost for using bulky packing material or transporting goods long distances. The Eco Index also includes estimates of how consumers will wash and eventually dispose of their clothes.
Image Courtesy Wall Street Journal, Levi's. Click to view interactive version.
The tool and scoring have been in development for over three years, but roll out to the public is not expected in the immediate future – even though retailers are announcing the Eco-Index at next month’s Outdoor Retailer trade show.
Levi’s vice president of social and environmental sustainability, Michael Kobori, says the tool will be available “as soon as we can get everybody to agree” on how to publish and communicate it.
Nike is one of the sportswear and apparel makers using the Eco Index to measure its products’ environmental impact. This sounds about as easy as herding cats, given the numerous brands involved. It’s one thing, many companies say, to use the data internally, but quite another to trumpet it to the world. They want to be sure everyone communicates the data in the same way. For instance, they don’t agree on whether the index should be communicated as a single number on a hang tag or in a more detailed manner that might involve directing customers to data on the Web.
Personally, I found the interactive graphic to be a great addition to the article. It shows how 1 pair of Levi’s jeans travels throughout the US and Caribbean – and even after purchase, how that one product continues to affect the environment.For example, the majority of CO2 emissions over the life-cycle of a pair of jeans come from the consumer’s washing machine & dryer. Switching to cold water and line-drying cuts the CO2 emissions to a fraction compared to washing with hot water washing and machine-drying.
Levi’s also looks to be making a lot of progress in sustainability based on their research into the greenness of their products:
As part of its participation in the Eco Index, Levi’s did a separate internal study of its own practices. As a result, Levi’s changed its transportation routes last year to make them more efficient and reduced carbon emissions by 700 metric tons. In addition to the Goodwill agreement, Levi’s also cut back on packaging, allowing only three pieces of labeling with the jeans—a back-pocket tag, a size sticker, and a price tag.
In my opinion, sustainability and trade compliance are linked policies. Companies must have a plan in place for both- or else pay fines, waste money, lose time, and give up competitiveness in the marketplace.
AMR Research has released their annual Supply Chain Top 25 list, and several of Management Dynamics’ customers appear near the top. The companies on this list all exemplify what AMR refers to as “demand-driven excellence.” In other words, their supply, demand, and product management processes are able to work together so that the business may respond quickly to opportunities arising from market or customer demand. Congratulations to all!
In today’s business environment, one of the trends we’ve been seeing lately is an increase in mergers and acquisitions. If you’ve experienced this at your organization, then you already know that when two companies combine, major changes are in store as new business practices are integrated, some existing practices are dropped, and the supply chain is no exception. Tompkins Associates has released a new white paper, Integrating Supply Chains from Business Combinations: Principles and Best Practices of Mergers and Acquisitions, that discusses challenges and best practices for supply chain teams faced with M&A activity.
The white paper discusses the importance of having supply chain strategy on the primary integration agenda, as it can be a fundamental value driver for a company. Additionally, when companies combine, the supply chain itself will have to adapt to potentially different suppliers, operating procedures, warehouse locations, etc.
The authors make several key points about how to overcome supply chain challenges when dealing with a merger:
The imperatives for true and lasting success with supply chain integrations are few; yet their achievement is challenging. The real keys to success in integrating supply chains in M&A are:
Assign strong and experienced team leaders;
Focus on enabling the business and operations strategies;
Decide on the new organization and processes with the right criteria;
Apply sound principles and best practices to all the work; and
Establish a performance-based culture and a self-assessing DNA.
Leading Apparel Retailer Implements Supply Chain Visibility Solution to Improve Vendor Collaboration and Proactively Manage In-Transit Delivery Issues
Management Dynamics, a leading provider of Global Trade Management solutions, today announced that Abercrombie & Fitch Co. (NYSE: ANF), a specialty retailer of casual apparel for men, women, and kids, implemented its Supply Chain Visibility solution to provide real-time visibility into the status of orders, shipments and in-transit inventory. The global, multimode visibility solution will allow its logistics team to streamline its supply chain process from vendor to distribution center and collaborate with merchants and service providers to reduce costs, shipment delays and improve customer service.
Abercrombie & Fitch selected Management Dynamics for its industry experience in delivering supply chain visibility solutions as well as its advanced data quality management capabilities. With 30 trading partners and multiple international business units, Abercrombie & Fitch’s logistics team needed a single, detailed level view of shipments and orders in-transit to track, manage exceptions, proactively pinpoint in-transit delays and respond to any potential logistics crisis. Integrating with its Oracle Retail Merchandising System, Management Dynamics’ Supply Chin Visibility solution allows merchants to monitor the delivery status of key orders and for the logistics team to proactively manage inbound shipments by milestones. And, with accurate shipment information earlier in the supply chain, Abercrombie & Fitch is able to improve store-level inventory allocations to reduce cycle time and achieve higher levels of availability.
“We needed to create reliability in our global supply chain with the ability respond to actual and potential issues and tightly collaborate with our merchants, distribution centers and service providers,” said Lois Davis, Vice President Global Trade & Transportation, Abercrombie & Fitch. “We chose Management Dynamics for their supply chain experience, ability to ensure data quality and problem resolution focused approach. Their hosted solution saves valuable time and effort, provides meaningful cost reductions, optimizes our shipping options, and improves our customer service.”
Management Dynamics’ Supply Chain Visibility solution supports the key requirements of the logistics operations at Abercrombie & Fitch including:
One central location for tracking critical shipment information across multiple sources, providing visibility to inventory in-transit and speeding the flow of goods from distribution to merchants.
Advance notice of shipment information to improve cross-border logistics decisions.
Proprietary Data Quality Management (DQM) technologies and business methodologies to ensure best-in-class information accuracy, completeness and timeliness for all messages exchanged between trading partners.
Event alerting capabilities that anticipate potential inventory receipt and fulfillment issues and prompt rapid resolution before they impact availability.
Robust functionality for measuring, analyzing and improving the performance of suppliers, carriers and service providers with user-defined reports, scorecards and KPIs based on frontline data.
“In high fashion with ever-changing seasons and consumer tastes by region, it is critical for specialty retailers to tightly manage the inbound supply chain from vendor to distribution center and ultimately to improve store-level fulfillment metrics,” said Jim Preuninger, CEO of Management Dynamics. “Abercrombie & Fitch understands the importance of building a strong infrastructure to support collaborative logistics processes and selected our Supply Chain Visibility solution based on a track record of delivery in this area. We look forward to helping this leading apparel retailer to establish transparency across its global supply chain and realize their operational objectives.”
About Abercrombie & Fitch
Abercrombie & Fitch Co., through its subsidiaries, operates as a specialty retailer of casual sportswear apparel for men, women, and kids. The company’s stores offer knit and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters, and outerwear, as well as personal care products and accessories under the Abercrombie & Fitch, abercrombie, and Hollister. It also offers bras, underwear, personal care products, sleepwear, and at-home products for women under the Gilly Hicks brand. As of December 16, 2009, Abercrombie & Fitch Co. operated over 1,100 stores in the United States, Canada, Italy, Japan, and the United Kingdom. It also sells its products through Web-based stores, as well as through a catalogue. The company was founded in 1892 and is headquartered in New Albany, Ohio
In a recent AMR Research study, 53% of 160 global trade professionals surveyed claimed that they would be increasing their investment on global trade management (GTM) software in 2010. Some of the main reasons cited in the study for the increase include: to improve coordination of GTM functions internally; to meet government mandates; to meet security requirements; to protect the brand; and to control various costs.
As companies become more global, increasing and expanding operations all over the world, it becomes very difficult to manually manage supply chain processes. Especially when employees are spread out across multiple locations. GTM technologies allow users to seamlessly communicate with trading partners, manage suppliers, optimize global transportation, ensure trade compliance, automate key aspects of trade finance, and develop timely resolutions of operational issues.
To be more specific, a supply chain visibility solution can provide shippers with near-real time visibility to the status of orders, shipments and in-transit inventory to optimize their network. Without a system in place, companies may be handcuffed with longer lead times, higher inventory levels, budget overruns, and continued supply-demand imbalances. Furthermore, with regulations such as the Importer Security Filing (aka 10+2), it is more important than ever to have more visibility and control over what happens at origin. (And speaking of ISF, check out how Bunzl Distribution integrated a supply chain visibility solution with a trade import solution to establish a transparent and compliant import supply chain.)
The bottom line is that we are moving into an era where manual supply chain processes are becoming inept for companies who import or export. To learn more about how different types of GTM technologies can benefit your organization, please download one of Management Dynamics’ GTM Success eKits.
Leading Manufacturer Streamlines Inbound Supply Chain to Efficiently Manage Growth
EAST RUTHERFORD, NJ, January 13, 2010 — Management Dynamics, a leading provider of global trade management solutions, today announced that Fiesta Gas Grills, one of the largest North American grill manufacturers, has implemented its Supply Chain Visibility solution to support its expanded global procurement operations. Integrating its sourcing which is primarily from China to its operations in the United States and Canada, the global multi-mode solution has enabled Fiesta to improve customer service, reduce cycle times, better manage suppliers and proactively identify in-transit delivery issues.
“We needed a solution that provided visibility into our manufacturing and distribution process at the supplier level, the ability to generate commercial documents and a platform on which to coordinate all of our global operations. We found the ideal solution with Management Dynamics,” said Peter Perley, COO, Fiesta Gas Grills. “The Supply Chain Visibility solution could help us to double our business this year without having to add additional staff to our procurement organization.”
Management Dynamics’ Supply Chain Visibility (SCV) solution connects Fiesta Gas Grills with its multiple overseas suppliers, logistics providers, brokers and carriers on a single global platform to communicate critical purchase order, shipment and inventory information and to support collaborative logistics processes. With real-time shipment visibility, Fiesta can offer its national retail customers, order tracking with visibility into nine stages of the manufacturing process for better inventory management with less frequency of stock-outs. In addition, armed with essential information on each shipment from its suppliers, Fiesta’s procurement operations can make accurate decisions relating to diverting inventory or resolving bottlenecks.
“Global supply chain teams need real-time visibility to their supply network, yet the realities of today’s global supply chain – multiple trading partners with varying information systems and data definitions – can create major operational challenges for companies,”said Nathan Pieri, SVP Marketing and Product Management for Management Dynamics. “By moving from a largely manual manufacturing and logistics process to one that is automated infrastructure with Supply Chain Visibility, Fiesta Gas Grills has the control and decision support tools they need to reduce lead times, enhance customer service and increase sales in this difficult economy.”
About Fiesta Gas Grills LLC
Through quality craftsmanship and innovative designs Fiesta has become one of the largest North American grill manufacturers. Fiesta grills are cooking great outdoor meals in over 30 countries around the world.. Whether its our award winning Blue Ember brand, our Fiesta brand or our Grillrite brand our dedication to quality permeates our company. From the design teams through the manufacturing team to the in-house customer service representatives, every member of the Fiesta family is committed to providing each owner of a Fiesta grill “the best grill under the sun” and the ultimate in outdoor cooking experience.
Supply Chain Visibility Best Practices reports on current issues, news and events associated with supply chain management. The authors of this blog are not trade attorneys and in no way should any posting be construed as compliance advice; furthermore, the authors are not responsible for any comments posted by others.
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