February 4, 2002
Retail turns to inventory
By Marcia Jedd, Minneapolis
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CargoNews Asia/Logistics Asia February 4, 2002 Retail turns to inventory By Marcia Jedd, Minneapolis |
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Retail Logistics - Minneapolis - Despite its lack of supply-chain connectivity, the retail industry has increased inventory turns by some 65 percent during the past decade, said Randy Covill, senior analyst at US-based AMR Research.
The pressure is on Asian-based suppliers to meet the production dates of their retail customers for faster inventory turns as production cycles shorten. The catch, notes Covill, is legitimate competitive concerns that keep retailers hesitant to share information with suppliers. However, this culture of secrecy is slowly changing as retailers realise that survival means pushing out data to all parties along the supply chain via Web-based software. New forms of supply-chain software and specialty retail software are helping retailers communicate with their vendors, allowing instant access to data. The last processes to migrate to the Web include computer-aided design (CAD) and project data management documentation (PDM). "The idea is to cut out time in the front-end design. We use the same tools, though not as sophisticated as someone like Boeing," said Laura McCann, CEO of New York-based Zweave Inc, solutions provider for CAD and PDM solutions in the fashion and soft goods industries. "Our solution helps product development organisations share information across global landscapes and collaborate with multiple partners with the focus on discrete manufacturing," she said. McCann praises the retail industry for reducing actual manufacturing and shipping times, but notes that considerable slack remains in the design chain. "Most companies work one year ahead. We're trying to help companies to design, develop and ship a product within 45 to 60 days," she said. McCann estimates the Zweave solution, delivered in the application services provider (ASP) model, can reduce development time by about 25 percent and development costs by some 20 percent. Zweave's dimensional design capabilities can bypass the need to produce early prototypes, thus saving valuable design time. Design changes can easily be tracked and stored in the Zweave system. This means a factory in Hong Kong could access the system and use its markup and visualisation tools to make design changes, avoiding faxing, express-courier shipping or even the e-mailing of cumbersome documents. Upstream, solutions provider Retek Inc has made inroads into the retail supply chain through its inventory management software since the 1980s. Minnesota-based Retek has also branched out into other solutions such as transportation management, warehouse management systems (WMS) and customer relationship management (CRM) software. "Everything the retailer does extends from the consumer," says Duncan Angove, vice-president of strategic business development at Retek. Last year, retailing giant The Gap Inc signed on with Retek. The Gap runs more than 3,600 US stores across its Gap, Banana Republic and Old Navy store concepts. As a vertically-integrated retailer, The Gap relies on a suppliers network worldwide to manufacturer its products to its specification. Gap started with Retek's planning and forecasting systems, and then moved to other areas such as inventory management and WMS for its 25-plus distribution centres worldwide. "On the operational side, for getting product into appropriate places once designed and developed, we have opportunities for significant improvement," said Ken Harris, chief information officer at Gap. "This means [bringing product] faster to market and better planning and forecasting. In our warehouse operations, we need to improve pick order efficiency." The implementation at Gap will span five years, as Gap migrates from its home-grown systems in use today, Harris said. Harris admitted that communications with its suppliers was less than sophisticated, with only a "small percentage" of its large trading partners using EDI. "A lot of the current process is voice, face to face," Harris said. The transition to Web-enabled solutions at Gap could take years to trickle down to the vendor level. |