|
Intentia:
Stepping Out With Fashion
and Style
Part One: Characteristics
and Trends of the Fashion
Industry
Featured
Author - Joseph
J. Strub
- October 4, 2004
Introduction
So
your software vendor says
that they can do fashion.
You better make sure that
the software features go far
beyond styles, colors, and
sizes. The requirements for
the fashion industry are some
of the most demanding and
unforgiving in the world of
manufacturing. If you’re
not careful, you may find
your profits falling on the
cutting floor and money being
swept out with the scraps.
Read on to find out why running
with a pair of scissors is
not the only dangerous thing
when selecting software for
the fashion industry and why
Intentia’s
offering bears investigation.
And even if you’re not
into fashion, learn what hurdles
another industry has to jump
to remain competitive. You
may feel fortunate to be in
the industry you are.
We
are surrounded by fashion.
In fact we come into contact
with it so often that we tend
to take it for granted. However,
if you are in the business
of fashion, you know that
people’s tastes are
extremely fickle and ever
changing. Your enterprise-wide
software has to be nimble
enough to turn on a dime.
It also must be able to anticipate
more often than to simply
react.
This
research note explores industry
characteristics and trends
and resulting software challenges.
After getting an understanding
of the fashion marketplace
and competition, we will look
at Intentia’s Movex
software offering. Movex’s
functions and features that
will allow you to cut, sew,
and package your products
efficiently … before
they are out of fashion.
And,
while you may
not be into haute
couture or consider
yourself a fashion
plate, you may
find how the fashion
world solves problems
similar to those
found in your
industry. For
sure, you will
have a better
appreciation of
what it takes
to put that shirt
or skirt on the
shelves and not
so quick to say
it costs too much.
Industry
Characteristics
and Trends
All
successful companies
cater to the needs
of their customers.
However, in fashion
these needs may
be more viewed
as whims or temporary
flights of fantasy
than established
trends on which
you can base production
and supply chain
decisions. Case
in point: how
long has the Pentium
IV computer chip
has been placed
on PC motherboards
compared to double-breasted
suits? Furthermore,
in somewhat of
a reversal, the
requirements of
fashion manufacturers
are being driven
more by the demands
of the retailers
that sell the
clothes than the
supplier.
A
recent example
between Levi’s
and Wal-Mart
highlights a developing
trend. Up until
the early 1990s
Levi’s could
pretty much deliver
the merchandise
and retailers
would sell it.
Now to do business
with Wal-Mart,
Levi’s had
to develop a new
line of jeans
to Wal-Mart specifications
and meet very
stringent guidelines
regarding performance
and cost control.
While Levi’s
is still driving
the car, Wal-Mart
supplies the operating
manual. This scenario
is being repeated
throughout the
fashion industry
as the balance
of the scales
shifts.
As
you would expect
in an industry
with a diverse
customer base,
namely the general
public, the life
cycle of product
is expressed in
months, not years.
To appease this
public, a product
is produced in
every reasonable
size and color
combination. Consequently,
the number of
stock-keeping
units (SKU) tends
to be much larger
than in other
industries. Missing
an opportunity
window—that
is short to begin
with—may
mean that you
could be stuck
with obsolete
merchandise. Predicting
the taste of the
general public
can, at best,
be a crap shoot.
While
outsourcing of
production is
not an unusual
practice, in the
fashion industry
it has become
a fine art. Shirt
cuffs are made
by one company;
collars by another
company; and buttons
by a third company.
The components
are all brought
together on the
sewing floor to
complete the finished
product. Because
operating and
profit margins
are meager, the
outsourced companies
can be spread
throughout the
world where labor
and material costs
are in cheap but
plentiful supply.
These factors
create longer
than usual lead
times and constant
managing of an
extensive and
far-flung supply
chain. As a result,
fashion is handicapped
by a long time
to market in the
face of a narrow
window of opportunity
in which to attract
the consumer’s
attention.
Illustrated
in figure 1 is
one of the simpler
but common supply
chains in fashion
industry. Spread
your suppliers
across the Pacific
Rim. Base your
assembly operations
in Europe. And,
of course, there
is a need for
distributions
facilities in
the major population
centers of the
world. Accordingly,
even a simple
supply chain model
grows in complexity
as the channel
partners grow
in geographic
distance.
A
somewhat unique
problem complicating
the life of fashion
is seasonality.
Imagine
a huge shipment
of winter coats
usually hits the
receiving docks
as the spring
flowers are starting
to bloom. Not
a problem; hold
the coats for
six months for
the fall season.
Chances that styles
and tastes will
be frozen are
as likely as a
block of ice will
not melt in a
35°C
(or 95° F)
degree heat. Improper
management of
the supply chain
can result in
a greater risk
of inventory exposure
and obsolescence.
Consequently,
the fashion industry
is faced with
seasonal items
(i.e., coats,
jackets, fabrics)
and non-seasonal
items (i.e., ties,
undergarments,
shirts). From
a software perspective
there are requirements
for make-to-order
(MTO) and make-to-stock
(MTS). However,
these requirements
are influenced
by the special
factors of fashion.
In other words,
you may want to
have a constant
stock of men’s
white dress shirts
but will make
to-order shirts
in less popular
colors.
Difficulties
in Managing the
Supply Chain
One
thing that should
become increasingly
obvious when working
in the fashion
industry is that
the supply chain
is extremely complex
and difficult
to manage, even
with the use of
automated tools.
There are likely
to be all possible
combinations of
components manufactured
by your own resources
and fully sourced
throughout the
world. Consequently,
obtaining an accurate
and current picture
of the supply
chain is not an
easy task. Likewise,
when the picture
does come into
focus, it is difficult
to react to changes.
Directly
or indirectly
affecting these
characteristics
are several industry
trends. As constant
pressure is being
placed on low
operating margins
and limited operating
capital, consumers
are demanding
better service.
These demands
are being translated
into penalties
if delivery schedules
are missed or
late. As quotas,
particularly in
the United States,
are relaxed, globalization
of product components
is increasing.
Suppliers are
looking beyond
traditional geographic
boundaries and
are shopping the
worldwide marketplace.
Consequently,
sourcing of these
components is
shifting and stretching
the capabilities
to manage the
supply chain and
meet delivery
schedules.
Compliance
requirements are
becoming more
stringent. In
additional to
delivery and quality
constraints, the
public’s
outcry to questionable
labor practices
of companies like
Nike and
The
Gap
has now placed
the microscope
on human rights
issues. No longer
is the cheapest
necessarily the
best in the arena
of public opinion.
As
cited in the Wal-Mart
example earlier,
retailers are
taking greater
control over the
supply chain.
Traditional boundaries
between the retailers
and suppliers
are becoming increasingly
fuzzy and difficult
to differentiate.
Everyone wants
to own the consumer
or, at least,
a piece of him.
Suppliers are
taking a more
dominant role
in “store
ready” inventory.
For example, TAL
Apparel Ltd.,
a closely held
Hong Kong shirt
maker, has a direct
pipeline into
point-of-sale
data at JC
Penney
stores. With this
information TAL
can readily determine
safety stock levels
and can initiate
replenishment
to prevent out-of-stock
conditions. Instead
of asking Penney
what it would
like to buy, TAL
tells them how
many shirts were
just purchased
and now need to
be replaced. As
a result, to reduce
inventory carrying
costs and to better
leverage available
operating capital,
vendor managed
inventory (VMI)
is being taken
to another level
of control and
convergence.
Figure
2 below summarizes
the trends in
the fashion industry
and their effect
on manufacturing
and production.
What
is most intriguing
about the trends
is that all are
out of the control
of the supplier.
While external
forces influence
many industries,
the rapidity in
which trends impacting
the fashion industry
change is somewhat
unique.
Introduction
The
requirements for
the fashion industry
are some of the
most demanding
and unforgiving
in the world of
manufacturing.
If you’re
not careful, you
may find your
profits falling
on the cutting
floor and money
being swept out
with the scraps.
The product segmentation
in the fashion
industry brings
into play every
type of manufacturing
scenario imaginable.
We
are surrounded
by fashion. In
fact we come into
contact with it
so often that
we tend to take
it for granted.
However, if you
are in the business
of fashion, you
know that people’s
tastes are extremely
fickle and ever
changing. Your
enterprise-wide
software has to
be nimble enough
to turn on a dime.
It also must be
able to anticipate
more often than
to simply react.
This
research note
explores industry
characteristics
and trends, as
well as resulting
software challenges.
After getting
an understanding
of the fashion
marketplace and
competition, we
will look at Intentia’s
Movex
software offering.
Movex’s
functions and
features that
will allow you
to cut, sew, and
package your products
efficiently …
before they are
out of fashion.
And,
while you may
not be into haute
couture or consider
yourself a fashion
plate, you may
find how the fashion
world solves problems
similar to those
found in your
industry. For
sure, you will
have a better
appreciation of
what it takes
to put that shirt
or skirt on the
shelves and not
so quick to say
it costs too much.
Software
Challenges
So,
what do challenges
such as shortened
time to market,
reduced lead times,
delivery performance,
and frequent changes
in customer demand
place on enterprise-wide
software? In the
fashion industry
product segmentations
are many and frequent.
Products tend
to cater to the
whims of the consumer
and try to be
all things to
all people. Consequently,
products are typically
categorized by
fashion lines.
These lines are
referred to as
collections and
appear multiple
times per year,
up to weekly.
They are often
one-shot events,
implying a single
buy of raw materials
with small or
no replenishments
anticipated. Products
aligned along
fashion lines
rely on retailer
forecasts or best
guesstimates under
a make-to-order
scenario, again
with no repeat
orders anticipated.
Under the fashion
line segmentation
product setup,
scheduling, and
execution must
be quick. It’s
not a case of
“He who
hesitates is lost.”
It’s more
a case of “He
who hesitates
never sees his
product on a retailer’s
shelf.”
Another
type of product
segmentation is
seasonal, which
places additional
requirements on
the software application.
Seasonal items
can also encompass
some of the fashion
line considerations
discussed above.
With some slight
variations, styles
of some seasonal
items can span,
in fact, several
seasons. A popular
summer shirt can
be carried into
the fall season
by adding long
sleeves. However,
typically the
product life cycle
of a seasonal
item is between
three and six
months. Follow-on
orders will depend
on initial sales.
Under the seasonal
segmentation software
must be able to
handle one-time
products that
may grow into
repeat orders
or can be easily
modified to accommodate
additional seasons.
Dealing with the
latter requirement
can be accomplished
with the ability
to copy or combine
a bill of material
or formula with
substitutions
and modifications.
The
last type of product
segmentation is
what is more commonly
found in a stable
manufacturing
setting. This
segmentation is
the replenishment,
never-out-stock
(NOS) product
lines. These include
the men’s
white shirt; the
women’s
black dress; the
basic men’s
Oxford shoe; and
women’s
black, mid-heel
pump. These products
have an extended
product life.
Of course, NOS
products often
undergo aesthetic
changes in a two
to three year
period. However,
such changes usually
do not require
major adjustments
to the production
lines and setups.
This segmentation
is as close as
you can come to
make-to-stock
in the fashion
industry.
The
product segmentation
in the fashion
industry brings
into play every
type of manufacturing
scenario imaginable.
One-time orders
are typical to
those in the specialty
chemical industry.
The no-carb craze
currently taking
over in the food
industry, which
has lasted six
months but is
near its end,
will surely have
fallout products
in the checkout
lines. The V6
engine block will
always be in the
majority of cars.
In the fashion
industry, software
must be able to
handle any one
or all of these
scenarios.
More
Software Challenges
But
the software challenges
do not stop here.
In fashion people
think in terms
of style, color,
size, and fabric—not
items. However,
inventory records
are maintained
at the item level.
The translation
between these
views must be
transparent and
simultaneous.
When customers
call to place
an order, they
are likely to
say, “Give
me a dozen blue
pleated skirts
in medium.”
However, when
picking the order,
the pick list
will direct the
warehouseman to
go to location
G120 and pick
twelve of item
324B.
The
software must
be able to generate
and handle an
inordinate large
number of stock
keeping units
(SKU). A man’s
button-down, long
sleeve, Oxford
shirt that comes
in five colors
could easily generate
300 distinct,
pickable items
(shirt x color
x collar size
x sleeve length).
When you add such
variations as
plain collars,
Egyptian cotton
fabric, and French
cuffs, the number
of items expands
geometrically
and, even for
very small suppliers,
can easily exceed
several thousands.
And who said that
women were the
fashion plates
of the species?
A corollary to
this challenge
is that orders
tend to be huge
in terms of line
entries and numbers.
Being
at the beck and
call and within
easy reach of
the consumers,
the software must
be able to accommodate
and service a
large number of
stores, be it
their own or those
of a retailer.
The only constant
in the fashion
industry is change,
namely nothing
stays the same.
When compounded
by the short life
cycles of products,
even shorter lead
times for materials,
and extended and
complex supply
chains, software
catering to the
fashion industry
must be adaptive
and serve to the
needs of a three-headed
master: suppliers,
retailers, and
consumers.
For
software developers
these challenges
translate into
features that
must be incorporated
in the design
of the enterprise
application. A
common feature
is the generation
of item numbers
based on a standard
distribution of
size and color
ratios. For example,
men and women
shirts are sold
in standard size
and color combinations.
To handle the
challenge of the
large number of
SKUs a typical
software feature
is to automatically
generate item
master entries
for this standard
distribution.
Figure 1 below
translates this
and other challenges
into common features
that must be included
in the software
design of any
respectable application
for the fashion
industry.
The
explanation of
these challenges
may appear somewhat
simplistic. Their
application and
usage, on the
other hand, is
very complex.
How one vendor,
Intentia, addresses
these and other
challenges is
the subject matter
for Part Three
of this research
note.
Introduction
So
your software
vendor says that
they can do fashion.
You better make
sure that the
software features
go far beyond
styles, colors,
and sizes. The
requirements for
the fashion industry
are some of the
most demanding
and unforgiving
in the world of
manufacturing.
If you’re
not careful, you
may find your
profits falling
on the cutting
floor and money
being swept out
with the scraps.
Read on to find
out why running
with a pair of
scissors is not
the only dangerous
thing when selecting
software for the
fashion industry
and why Intentia’s
offering bears
investigation.
And even if you’re
not into fashion,
learn what hurdles
another industry
has to jump to
remain competitive.
You may feel fortunate
to be in the industry
you are.
We
are surrounded
by fashion. In
fact we come into
contact with it
so often that
we tend to take
it for granted.
However, if you
are in the business
of fashion, you
know that people’s
tastes are extremely
fickle and ever
changing. Your
enterprise-wide
software has to
be nimble enough
to turn on a dime.
It also must be
able to anticipate
more often than
to simply react.
This
research note
explores industry
characteristics
and trends and
resulting software
challenges. After
getting an understanding
of the fashion
marketplace and
competition, we
will look at Intentia’s
Movex
software offering.
Movex’s
functions and
features will
allow you to cut,
sew, and package
your products
efficiently …
before they are
out of fashion.
And,
while you may
not be into haute
couture or consider
yourself a fashion
plate, you may
find how the fashion
world solves problems
similar to those
found in your
industry. For
sure, you will
have a better
appreciation of
what it takes
to put that shirt
or skirt on the
shelves and not
so quick to say
it costs too much.
With
an understanding
of the characteristics,
trends, and challenges
facing the fashion
industry, the
remainder of this
research note
looks at how one
developer, Intentia,
has designed its
software offering,
Movex, to respond
to the industry’s
needs.
The
remainder of this
note provides
a brief overview
of Intentia and
examines some
of the important
features of Movex
to include
- Item
Creation and
Maintenance
- Demand
Forecasts and
Management
- Sales
Order Processing
(Part Four)
- Production
Planning and
Control (Part
Four)
- Inventory
and Distribution
Management (Part
Four)
- Financial
Management (Part
Four
Intentia
Overview
Intentia,
based in Stockholm,
Sweden, is one
of the world's
leading suppliers
of collaborative
solutions. Intentia
has approximately
2,700 employees
serving more than
3,400 customers
in the manufacturing,
maintenance, and
distribution industries
via a global network
spanning some
forty countries.
After a strong
performance through
the 1990s, Intentia
suffered a sudden
drop in total
revenues upon
entering the new
century. This
was due in part
to the soft market
after the over-hyped
Y2K phenomenon
and followed up
by the global
economic downturn.
Intentia’s
AS/400 platform-centric
approach of its
Movex software,
which has since
been redesigned
as a Java-based
product, made
it less attractive
to a wider range
of hardware solutions.
Intentia’s
second quarter
2004 results show
a 26 percent increase
in license revenue
and an 8 percent
reduction in costs
and expenses compared
to the same period
of 2003, resulting
in an operating
profit of $14
MM Swedish krona
(SEK) ($1.8 MM
USD).
Recent
reports, however,
have indicated
that Intentia
is still attempting
to stem the tide,
increase revenues,
and return to
profitability,
while also developing
the internal infrastructure
to increase and
measure efficiency
(e.g., deployment
of consultants’
utilization system
and sales lead
tracking system)
and reduce costs.
Measures approved
by Intentia’s
board include
personnel reductions
and facilities
consolidation,
which are expected
to lower costs
and expenses by
an estimated $290
MM (SEK) ($37.8
MM USD), or 10
percent, on an
annualized basis.
The company will
record a restructuring
charge of approximately
$250 MM (SEK)
($32.6 MM USD)
in the third quarter,
which is equal
to the expected
cash flow impact
over the period
Q3 2004 to Q1
2005.
Item
Creation and Maintenance
A
challenge in the
fashion industry
is the large number
of stock-keeping
units (SKU).
As was described
previously, a
simple man’s
shirt could easily
generate more
than 300 items
or SKUs. Entry
and maintenance
of these SKUs
can be a time-consuming
and expensive
proposition. The
application software
not only needs
to support a flexible
structure but
also to automate
this process to
minimize keystrokes.
Figure
1 below illustrates
the structure
supported by Movex.
It is divided
into two segments.
The first segment
contains information
that is common
to all items associated
with a SKU. In
figure 1 all items
for SKU A122131-140
are women’s
wear, casual blouse.
There would also
be common descriptive
information such
as short sleeve,
open collar. Differentiating
items within a
SKU are attributes
such as size,
color, style,
and fabric. Movex
supports an unlimited
number of user-defined
attributes. Furthermore,
the software provides
a translation
from how a user
would recognize
at item (i.e.,
small, red cotton
blouse) to an
item number (i.e.,
A122131-140-111)
needed for locating
and picking the
product in the
warehouse.
Figure
1
While
a flexible structure
is important,
users can be overwhelmed
by the amount
of data that has
to be entered
for a single SKU.
Movex takes advantage
of its structure
to minimize the
data entry workload.
First, the common
information such
as description,
supplier, and
style need only
be entered once.
Then it is automatically
inherited by the
items within the
structure. Figure
2 illustrates
the data entry
process. Once
the template is
established for
style, color,
and size, the
quantities entered
into the matrix
and the necessary
items are generated.
Figure
2
Movex
supports style
composition for
labeling. These
are those tags
that scratch the
back of your neck.
Using previously
entered data users
can select information
for inclusion
on the label.
Again, this feature
not only reduces
data entry but
ensures consistency
with the SKU description.
As you would expect
in distributing
products to a
worldwide market,
Movex also supports
full language
handling capability
of attributes,
descriptions,
and labeling information.
In connection
with the global
impact of fashion,
the software can
automatically
generate European
article numbering
(EAN) and universal
product code
(UPC) designations.
As
will be described
in more detail
under sales order
processing, seasonal
attachments can
be assigned to
SKUs to prevent
ordering summer
coats to arrive
in the middle
of winter. Bill
of materials
(BOM) and routings
can be defined
once at the style
level, and Movex
incorporates simple
tools for building
in SKU variations.
For example, for
sizes of small
to medium, use
three buttons;
for sizes of large
and extra large,
use four buttons.
Or, match the
red belt with
the red skirt
and the blue belt
with blue skirt.
You might suggest
that the belt
be made part of
the SKU for the
skirt. In so doing,
you could be prevented
from selling the
belts separately
or the skirts
without belts.
Tailoring
the routing to
the particular
requirements of
the SKU provides
flexibility and
manufacturing
and assembly alternatives.
Additional, value-added
services such
as printing and
packaging can
be incorporated
into the routing
definition. For
your less sophisticated
suppliers, such
BOM and routing
features can be
developed for
their assembly
lines and used
on a manual basis.
While not a foolproof
mechanism, such
aids can help
to eliminate production
mistakes and resulting
seconds.
Demand
Forecasts and
Management
Due
to the long lead
times and short
life cycles, accurate
forecasting of
the demand for
a product is critical
to avoiding inventory
obsolescence and
missed sales opportunities.
Movex supports
collaborative
and distributed
forecasting. In
so doing, all
participants in
the product development
and supply chain
process can provide
input into anticipation
demand of a product
and, equally important,
an early warning
signal as to delivery
schedules. By
providing the
ability to the
receipt of forecasts
via electronic
data interchange
(EDI) and the
Internet, as well
as the maintenance
of forecasts via
the Internet,
time zone delays
and delays in
general can be
avoided or, certainly,
minimized.
Using
mathematical techniques
and algorithms,
forecasts can
be top down, middle
out, and bottom
up. The advantage
of the top down
approach is that
you can forecast
at the highest
level, say women’s
blouses, and then
let Movex automatically
distribute the
results down to
the SKU based
on normal consumer
buying patterns.
For example, Movex
could forecast
the demand for
10,000 blouses
and drive down
the forecast to
individual SKUs
based on color,
size, style, and
historical sales
data.
Distribution
patterns can be
copied from one
style to another.
This can be particularly
useful for a new
product where
no demand history
exists. With integrated
software such
as Movex forecasts
can be transferred
to planning and
production schedules
and financial
projections.
Don’t
overlook this
important software
component. An
effective demand
management component
can help reduce
the effects of
a global marketplace
and overextended
supply lines.
Introduction
We
are surrounded
by fashion. In
fact we come into
contact with it
so often that
we tend to take
it for granted.
However, if you
are in the business
of fashion, you
know that people’s
tastes are extremely
fickle and ever
changing. Your
enterprise-wide
software has to
be nimble enough
to turn on a dime.
It also must be
able to anticipate
more often than
to simply react.
This
research note
explores industry
characteristics
and trends and
resulting software
challenges. After
getting an understanding
of the fashion
marketplace and
competition, we
will look at Intentia’s
Movex
software offering.
Movex’s
functions and
features that
will allow you
to cut, sew, and
package your products
efficiently …
before they are
out of fashion.
And,
while you may
not be into haute
couture or consider
yourself a fashion
plate, you may
find how the fashion
world solves problems
similar to those
found in your
industry. For
sure, you will
have a better
appreciation of
what it takes
to put that shirt
or skirt on the
shelves and not
so quick to say
it costs too much.
With
an understanding
of the characteristics,
trends, and challenges
facing the fashion
industry, the
remainder of this
research note
looks at how one
developer, Intentia,
has designed its
software offering,
Movex, to respond
to the industry’s
needs.
The
remainder of this
note examines
more of the important
features of Movex
to include
- Sales
Order Processing
- Production
Planning and
Control
- Inventory
and Distribution
Management
- Financial
Management
Sales
Order Processing
Just
as color, size,
and style combinations
generate a large
number of stock-keeping
units (SKU),
they also generate
orders with a
large number of
order lines. As
you might expect,
there needs to
be a method to
simplify the order
entry process
to reduce keystrokes
and ensure accuracy.
Movex satisfies
this twofold objective.
As
illustrated in
figure 1 below,
at order entry
time a template
is created that
includes the key
attributes of
the item such
as color and size.
Creating an order
is as simple as
entering the quantities
corresponding
to the customer’s
requested colors
and sizes.
Figure
1
As
a software product
in support of
the fashion industry,
this would be
the minimum expectations
for efficient
data entry. Movex
provides additional
assurances to
create the “perfect
order”.
Tailored to a
customer’s
specific needs
and historical
ordering patterns,
potential inconsistencies
can be avoided.
Rules established
with the customer
can be enforced.
As shown in figure
2, this customer
has predefined
certain percentages
and distributions
that must be satisfied
or you cannot
ship the order.
Such behind-the-scenes
checks and balances
will eliminate
your customer’s
dissatisfaction
and the consumer’s
frustration. Nothing
annoys a consumer
more and kills
repeat business
than being out
of stock of common
colors, sizes,
and styles.
Figure
2
As
has been repeatedly
stated, seasonality
and delivery constraints
can be critical
to the success
of a merchandizing
program. Within
Movex you can
tag SKUs as being
seasonal or non-seasonal.
Additionally,
the appropriate
seasons can be
attached to SKUs.
For example, a
coat can be designated
as summer, be
delivered in the
spring months,
and on the racks
during the summer
months. With such
designations and
associations,
seasonal relationships
can be validated
at order entry
time based on
the ordering and
delivery dates.
Is the order valid
for the season?
Is the requested
delivery date
valid for the
season? Furthermore,
seasons can be
divided into delivery
windows such as
the first available
or allowable ship
date or the last
allowable ship
date to ensure
product arrives
on time and on
schedule.
Movex
supports flexible
pricing and discounting
practices that
are common in
the industry.
In addition, commissions,
royalties, and
retrospective
discount payments
are automatically
calculated during
the order entry
process but can
be paid based
on shipment of
the order or receipt
of customer payment.
Accepting ordering
data from point-of-sale
devices or via
the Internet through
web-enabled software,
Movex offers a
robust array of
statistical reporting
by season, attribute,
or other parameters.
It also provides
an easy-to-use
module for custom
reports.
Production
Planning and Control
Good
planning and effective
use of production
capacity are essential
in fulfilling
customer orders
and meeting delivery
schedules. From
a planning perspective,
Movex supports
a company with
multiple sites
after which the
individual plans
can be consolidated
into a central
plan for the entire
corporation. By
encompassing distribution
resource planning
(DRP) objectives,
Movex tracks and
accounts for lead
times by vendor
and by SKU or
location.
Additionally,
on-line modeling
gives you the
ability to "tweak"
different inventory
scenarios to easily
examine the impact
of change on service
and inventory
levels. Being
constraint-based,
planning motivates
an organization
to focus on resolving
the bottlenecks,
specifically the
processes and
resources which
tend to be in
limited supply
but continual
demand. Planning
exceptions generate
action messages
and e-mails ensuring
the most appropriate
personnel are
notified at the
earliest point
in the production
line. Standard
aggregated and
multi-level planning
views are provided
by style, color,
size, and SKU
with the ability
to create custom
views.
Movex
permits you to
aggregate orders
sharing common
resources and
routing, thereby
providing simple
one-step reporting
and on-line management
of production
orders. This reporting
can also include
subcontractor
processes performed
off-site yet critical
to the production
run. Employing
aspects of a manufacturing
execution system
(MES), each step
of the production
process can include
integration with
a quality control
function to minimize
seconds or to
ensure prompt
notification so
that the line
can be restocked
and expected yields
still achieved.
In
a sewing plant,
cut garment pieces
for a number of
garments are usually
wrapped together
and travel down
the sewing line
in a bundle. Tools
are incorporated
throughout Movex
to enable easy
working at a grouped
level such as
by style, style
and color, and
works order. The
software also
simultaneously
facilitates detailed
bundle management
in a production
environment. Incorporated
in Movex are automated
bundle split capabilities,
and bundle level
reporting and
tracking functions.
Inventory
and Distribution
Management
As
has been emphasized
repeatedly in
this article,
the unique nature
of fashion is
the high turnover
of SKUs. Consumer
tastes continually
change, which
marketing departments
usually encourage.
Consequently,
freeing up inventory
slots and locations
for new product
is essential.
Equally essential
is the ability
to store goods
in both bulk and
pick-face locations,
and to pick efficiently
from these different
locations depending
on the nature
of the orders
being picked.
Movex supports
system directed
putaways, cross-docking,
and picking strategies
that reinforce
this philosophy.
When
suggesting a putaway
location, maximum
effort should
be made to lessen
the degree of
wasted space.
Movex accomplishes
this by maintaining
and matching incoming
goods with an
open inventory
slot. To increase
the efficiency
inside the warehouse,
Movex automatically
suggests which
locations to use
for cross-dock
or put-away whenever
goods receipts
are to be reported.
Movex offers many
different variables
to control suggested
locations such
as fixed, preferred
reserve, and dynamic.
These variables
include pick frequency,
slot location
accessibility
and dimensions,
and bulk versus
pick-face areas.
Cross-docking
is where a receipt
of product is
automatically
designated for
shipment to a
customer. The
software recognizes
the inbound receipt
of product, correlates
this fact with
a customer’s
order, and uses
the receipt to
fulfill said order.
The importance
of cross-docking
is that putaway
and picking functions
are essentially
eliminated. Behind
the scenes, the
receipt is matched
with the purchase
order, invoice
payment is scheduled,
the bill of lading
is generated,
and the customer
is invoiced. Time
is saved, redundant
processing minimized,
and effective
use made to newly
arrived product.
It’s a win-win-win
situation.
Movex
offers fulfillment
and picking strategies
to increase the
efficiency of
the warehouse
and maximize the
use of space.
For companies
with multiple
distribution centers,
efficient sourcing
of an order can
be established
based on a set
of rules which
is defined in
a supply model.
So, where a particular
distribution center
may normally be
used for a particular
delivery location,
the supply model
may indicate that
a specific order
can be more efficiently
fulfilled from
a different distribution
center. This change
may be necessitated
because there
is no availability
in the normal
distribution center
or because the
required quantity
constitutes a
large order which
should be shipped
from a central
distribution center.
Once inside the
four walls of
the warehouse,
goods are selected
for pick based
on the FIFO concept,
and also taking
into account bulk
and pick-face
picking rules.
The FIFO concept
can assist in
ensuring that
locations will
be fully cleared
before moving
on to pick goods
from another location.
Additional picking
efficiency can
be achieved by
rule-based sequencing
of the pick lists.
Referring
back to the skirt
and belt example,
kitting is a common
operation in the
fashion industry.
Kitting is where
you combine two
SKUs and sell
them as third
SKU. The belt
is kitted with
the skirt; a blouse
is kitted with
a pair of slacks;
or a men’s
tie is kitted
with a shirt.
Typically, kitting
involves a two-pick
process. The first
pick moves the
individual SKUs
to a forward pick
area. The second
pick marries the
two SKUs from
the forward pick
area for order
fulfillment and
shipping. Movex’s
software supports
kitting and the
forward pick area.
Movex
provides the capability
to track usage
of particular
locations and
reports can be
generated indicating
location utilization
and SKU turnover.
These reports
can be used as
the basis for
manual slot consolidation.
The
delivery and distribution
functions supported
by Movex include
the automatic
calculation of
the customer receipt
and delivery time
based on logistic
and transport
planning, which
can support less
than truck loads
(LTL) and third-party
freight carriers.
Additionally,
the software can
produce a load
planning schematic
or, after the
fact, support
a manual load.
To complete the
delivery cycle,
Movex includes
a proof of delivery
and returns processing
components.
Financial
Management
Again,
given the global
nature of the
fashion industry,
you would expect
the software to
support multiple
foreign currencies,
gain and loss
due to currency
translation, and
restatement of
financials based
on the default
currency of the
corporation. Movex
does provide this
flexibility and
functionality.
Accounting is
fully integrated
with the other
modules of the
software such
as invoicing,
cash receipts,
payable distribution,
and inventory
evaluation. Movex
includes several
costing accounting
methods to include
standard, actual,
and average costing
to facilitate
the switching
between methods.
Factoring
is a common practice
in retailing.
Factoring is where
you sell your
receivables to
a third party
at a discount
and receive payment
immediately. Movex
supports a fairly
robust factoring
process. First,
a factors credit
limit is established
for the bill-to
customer. If sufficient
credit exists
based on the factoring
credit limit,
the order is approved
and processed
for factoring.
A separate and
more standard
credit limit can
also be established
for the bill-to
customer to allow
an alternative
method for approving
the order. Movex
can also handle
letters of credit.
Summary
and User Recommendations
We
have seen that
characteristically
the fashion industry
is confronted
with long lead
times to develop
products with
a short life cycle.
Due to the combinations
of colors, sizes,
and styles there
are large number
of SKUs compared
to a relatively
small number of
items. The suppliers
and subcontractors
are spread worldwide,
making visibility
of the supply
chain difficult
and time to react
to change and
unexpected events
exceedingly long.
The seasonality
of items places
additional constraints
on the supply
network and make
abiding by the
delivery schedule
critical.
The
challenges facing
the industry are
the need for the
fast setup of
new items to counteract
the large number
of SKUs. A corollary
to the large number
SKUs is that customer
orders also tend
to be large in
terms of order
lines. Consequently,
processes to enter
orders must minimize
the amount of
keystrokes via
a matrix-driven
approach. A product
mix includes mostly
make-to-order
SKUs with some
standard make-to-stock
SKUs. Further
complicating this
mix is the seasonality
issue. However,
it is not a case
that a SKU can
be held for the
next season. With
consumer tastes
constantly changing
and the need for
something different,
a fashion item
will, at best,
last for a single
season and there
may even be several
collections within
a season. The
constant in the
fashion industry
is that there
are no constants.
Intentia’s
Movex provides
ample tools to
respond to the
trends and challenges
of the fashion
industry. While
Intentia needs
to continue to
work to get its
financial house
in order, based
on its functions
and features Movex
deserves to be
on anyone’s
short list of
vendors able to
competently compete
in the world of
fashion.
About
the Author
Joseph
J. Strub
has extensive
experience as
a manager and
senior consultant
in planning and
executing ERP
projects for manufacturing
and distribution
systems for large
to medium-size
companies in the
retail, food &
beverage, chemical,
and CPG process
industries. Additionally,
Mr. Strub was
a consultant and
information systems
auditor with PricewaterhouseCoopers
and an applications
development and
support manager
for Fortune 100
companies.
He
can be reached
at JoeStrub@writecompanyplus.com.
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