Only as strong as its weakest link
Staff -- Home Textiles Today, 4/15/2002 12:00:00 AM
Link by link, country by country, the home textiles industry is forging what old Marley's ghost would have recognized as "a most ponderous chain."
When nearly anybody can turn out a solid-color sheet set or a snowman kitchen towel, the ability to service goods and the ability to deliver lower-cost goods "is an absolutely equal one," according to Farley Nachemin, brand president, Domestications. And in such an equation, turnaround finesse "will make or break a decision about a supplier," said Steve Goldberg, president of the Home Lifestyles Group at Brylane.
That reality is not lost on suppliers. Today's mandate, as described by Brentwood Originals president Loren Sweet, can be boiled down to a mission statement briefer than a haiku: "Speed, speed and more speed."
The trick, of course, is that as the supply chain stretches ever longer — components for a single bed ensemble are sometimes produced in up to five countries — delivery windows are growing narrower and narrower.
At Eddie Bauer Home, where the cycle for bringing product to market has been clipped by 25 percent, "we are depending more on the entire supply chain — 35 percent involved in advance of color and concept development. The entire process is accelerated and backfill is eliminated," said Harvey Kanter, vp, managing director, home.
That's as true for manufacturers that produce the majority of their goods in the United States as it is for importers. And pressure squeezes both ends of the process.
"Interestingly enough, what's really important is not so much what happens in our DC as what happens after the product leaves it," said Chip Fontenot, president and coo, WestPoint Stevens. "We have to have a strong understanding of what happens in their DC and how they get the product from their DC to their stores. We have to understand all their systems and accommodate ourselves to them."
Small wonder that retailers and vendors each year are spending millions, in some cases billions, to improve their systems.
And yet, vendors and retailers agree one critical factor in the process remains in crying need of improvement: forecasting.
"Reality is one thing; some forecasts are another," said Trevor Rabkin, co-ceo, Custom Comfort. "There are times that we all work in the dark."
Just how off kilter is the forecasting process? Park B. Smith Ltd. president and ceo Park Smith Jr. pegs it at plus or minus 20 percent — a potentially expensive spread.
"First, there is an open order, and then there is forecasting beyond that — and it generally is livable," he added. "But it is [left] for us to make the decision if it is a correct forecast, or to move up or down."
"All retailers should share all data with suppliers," said Carl Goldstein, senior vp, S. Lichtenberg & Co. "It's a team effort."
It's not only quantity of data that can pose a risk; the quality of the data needs improving, too, according to Rick Lipton, national sales manager, Creative Bath.
"Most retailers cannot project needs because they just do not know what or when their consumers will be purchasing. It becomes a vicious cycle — on everyone's part — of guesswork."
And the business requires accurate forecasting now more than ever because the way goods are produced has become infinitely more complex than it was only four or five years ago.
The global supply chain now includes a mixture of sourced product suppliers and semi-finished product suppliers, adding three to six weeks to the shipping process. "This puts a greater premium on forecasting," noted Frank Foley, ceo, CHF. "This can also make for less firm information."
Further, many overseas suppliers tapped by U.S. firms are still ascending the technological learning curve, requiring vendors to manage their sources as well as their own accounts. "It's just that we have some stronger automated requirements than they're used to dealing with," said Hollander Home Fashions president and coo Jeff Hollander. "What we've done is come up with some suggested programs and systems so they can integrate our needs into their systems earlier."
The stepped-up demand by retailers for product exclusives also complicates supply chain management. "That requires lots of skus and lots of private labeling," said Pat Moyer, vp, marketing, Mohawk Home. "Sometimes we'll send a border rug to eight or 10 customers, but if each one needs its own label, we lose some of the efficiencies."
Despite all the sophisticated technology retailers are cobbling together, many vendors maintain they are still being presented with inadequate data.
"There is a lack of recognition or concern relating to the necessary lead times," said Frank Scalice, executive vp, Town & Country Living. While retailers generally recognize the need to share data, some hedge their forecasting "because they do not want to feel an obligation to the inventory brought in based on the forecast if the item does not sell as forecast," he said.
It is here that the need for improved forecasting runs headlong into the growing practice among retailers to push the responsibility for poor decision-making onto the supplier's plate. And while the demand to deliver goods by sku, and sometimes by door, becomes more intense, vendors are left to parse a slippery riddle: When is a commitment actually a commitment?
"A verbal commitment translating to an order itself is one of the biggest challenges we face," said Dale Talbert, vp of sales, Veratex. "You get an order from a retailer and you have to order it now to meet their deadline three months from now, but they might change their mind after you've ordered it."
What's next? More technology, vendors and retailers say. Hopefully, more dialogue. And certainly more changes in the supply chain structure.
"There's a lesson to be learned from the automotive industry," said David Kahn, president and ceo, Croscill Home. "They turn over large quantities of any specific component to master vendors."
Retailers may reap the greater benefit from supply chain management — at least in terms of short-term gains — but suppliers acknowledge that the push to constantly improve systems redounds to sharply managed vendor companies as well.
"It helps you focus on all of the elements that go into being a profitable company," noted Tim Clothier, senior vp, manufacturing and logistics, Pacific Coast Feather.
Perhaps more important, said Pillowtex president and coo Tony Williams, sound supply chain management works as a distillation process, bringing some clarity to the job at hand.
"It allows you to focus on what you are superbly good at doing," he said. "That allows you to free up capital, certainly human capital, and it allows you to deal with the design, the marketing and ultimately the customer — presumably the things you do best."
We would love your feedback!
Most Recent Resources
- Getting the most out of offline leads
- Free Shipping and the Importance of Onsite Promotion
- Should Branded Manufacturers Participate in Flash Sales?
- Rugs 101 - Special Edition
- How Big Is Your Label
- Choosing a Web Site Developer
- Convergence: Tie Your Online & Offline Experience...
- Social Networks to Social Shopping
- Why Brands and Their Retailers are Facebook’s Biggest...
- Web Based Intelligence Gathering
- The Future of Tablets
- Shopatron: Bicycles & eCommerce
- A Guide to Holiday eCommerce Success
- Mattress Buying 101 - Connecting with Consumers
- Designing Your Brand’s Website for eCommerce
- Global Sourcing in 2010: Doing More With Less
- Comparing Four Options for Turning Web Site Traffic into...
- Are You Prepared for the 2009 Holiday Season? A Branded...
- Design, Develop, Deliver: The Three D's to Digitally...