102_Improving--Supply-Chain-Visibility---Fashion-Sourcing.pdf [152k]
Improving Supply Chain Visibility - An Essential Requirement for Fashion Sourcing Companies
So Where Is The Problem?
As the pressure increases in fashion sourcing, CHANGE is ultimately the only route to survival for most companies. Simply doing things the same way as before, but somehow hoping for a different result is not enough.
With even tighter margins to manage and a high risk of penalties and excess costs associated with late delivery and non performance, it is essential to achieve excellent visibility and control.
Yet many businesses still suffer from:
• Late Deliveries often resulting in penalties from your customers
• Excessive or unexpected airfreight charges
• Excessive or unexpected reprocessing costs (repackaging or re-labelling)
• Excessive stock write-downs (off price sales)
If you are experiencing any of these problems within your business it probably means that your supply chain is not under control.
Can you keep track of your suppliers as accurately and effectively as you would like?
Without the ability to effectively monitor and control your suppliers, you are, at best, leaving delivery performance to chance and, at worst, potentially about to lose customers to your competitors.
So the real problem is that the majority of Apparel companies still rely on excessively manual systems which offer little or no real ‘company level’ visibility. Most have introduced some form of purchase order tracking mechanism (critical path) – usually on spreadsheets. Whilst this has been a necessary step, it is seriously lacking in terms of ‘company level’ visibility and, only solves one aspect of the required control mechanism.
What is The Answer?
What is really needed is a fully co-ordinated approach to planning that links together all the key elements.
Requirements of A Solution
1. Visibility of order status with proactive alerts to any problems
2. Good communication with suppliers – irrespective of their location
3. Proactive critical path management with alerts to problems
4. Material required calculation and availability check (depending on the nature of your business)
5. Visibility of any capacity constraints at suppliers
1. Visibility of order status with proactive alerts to any problems
It is essential that the planners/merchandisers/buyers have immediate and pro-active visibility of any problems that may exist with any orders. They should be able to receive (via email) alerts when issues arise with any of their orders. They should be shown a visual picture of order status and be able to drill down to determine the cause of the problem and then to easily re-plan where appropriate, immediately being able to see the consequences of the re-planning decision.
2. Good communication with suppliers – irrespective of their location
Many businesses communicate with their suppliers with a combination of email, fax and phone calls. Frequently spreadsheets are sent to suppliers for them to complete with order progress details.
This approach often means a high volume of manual work and that potential problems are not visible early enough.
What is needed is a mechanism to automatically send emails to suppliers to advise them of the information required and allow them to easily update order status without having to manually amend spreadsheets. It is also essential that supplier updates are automatically integrated into the plan and any problems immediately alerted to the planner as described in section one.
3. Proactive critical path management with alerts to problems
It is essential that all steps required to ensure on-time delivery of an item are carefully and effectively monitored, with a full timeline being planned backwards from the required delivery date (Critical Path).
All activities should be the responsibility of a specific individual and any that are overdue should be immediately and pro-actively alerted (via email). It is essential that the email mechanism co-ordinates overdue activities by person and sends consolidated emails (rather than one email per alert), otherwise the volume of email alerts will cause the mechanism to be ineffective.
It is also important that various mechanisms of update are provided (including remote update facilities) so that activities can be easily and quickly updated.
4. Material required calculation and availability check
Where materials are being provided to suppliers, it is important that the plan is checked for validity regarding any material supply restrictions.
Proactive alerts should be provided where potential material shortages exist and it should be easy to re-plan around these material availability constraints, whilst simultaneously being able to see the effect (e.g. potential late delivery problems) of these re-planning decisions.
5. Visibility of any capacity constraints at suppliers
Where any capacity/volume restrictions are known at suppliers, an immediate view of whether the plan breaks these restrictions (capacity overload) is required.
Where the supplier has capacity/volume restrictions on a specific type of garment, or garment feature (e.g. embroidery) then it should also be possible to monitor these restrictions.
Again a proactive alert mechanism should be provided, where capacity constraints have been breached so that the planner is able to quickly re-plan as appropriate.
Why Do Something Now?
Many companies will simply ‘draw back’ and look at all possible ways of reducing cost during challenging times; and challenging costs is of course necessary action. BUT it is also vital to maintain careful investment in those areas which can directly help to improve efficiency and reduce excess costs.
Simply ‘labouring on’ with existing manual methods, with all their weaknesses, is not an acceptable solution. Yet with the right approach, problems can be turned into opportunities. There are companies who will use the opportunity to gain competitive advantage over those who take no real action to improve.
Fast React Systems provide industry specific expertise and solutions which provide DRAMATIC improvements in visibility coordination and control, which are easy to use and which can be deployed quickly to provide a very rapid return on investment.
