How to Improve Supply

Chain Automation For

Improved Retail Sourcing

Decision Making

Contents Summary

3. Introduction

4. Major pains of retail supply chains

6. Limitations of current sourcing management

8. Effective sourcing management & automation

10. CBX Retail Supply Chain Automation

11. Case Study: Grupo Cortefiel finds vision

12. Summary & About CBX Software

Today’s retail sourcing environment is increasingly

complex, where multiple functions, processes and

suppliers in different countries must collaborate like a

virtual orchestra to produce products within short lead

times. Failure to get the right product mix in front of

the increasingly fickle consumer could mean failure of

a product, brand or company. Best strategic sourcing

software tools help retailers get products to market on time

through expanded visibility into critical issues which might

impact the product lifecycle. This white paper addresses

common issues that global retailers face in their supply

chains, providing an overview of how Retail Supply Chain

Management software (SCM), Retail Sourcing and retail

product lifecycle management solutions (retail PLM

solutions) can relieve supply chain bottlenecks.

Introduction

In today’s competitive retail industry bankruptcies and

store closures dominate the daily news, retailers and

brands face a myriad of pains and issues just to survive.

To maintain their margins and competitiveness and ensure

survival, retailers rely on strategies such as sourcing direct

from suppliers and increasing their sourcing and private

label programs.

Retail supply chains are incredibly complex, with multiple

steps, processes and milestones involved from a product

concept or planning stage to the point of product delivery

and sale to the customer. In order for new competitive

strategies to work, retailers need to ensure that their

supply chains are fully optimized with built in visibility,

collaboration and efficiency. As the number of private label

sku’s sourced increases, numerous functional areas in

different countries need to collaborate and plan to respond

to change effectively.

If communication and collaboration is ineffective,

bottlenecks occur, production and delivery dates are

missed, margins are squeezed, consumers look elsewhere

and the bottom line takes a hit. Often production delays

are the result of not being able to automatically connect

information from a multitude of different supplier processes

quickly, and accurately. Information required through the

retail product lifecycle (Retail PLM) comes from different

sources including spreadsheets, emails and third party

disparate systems and there is often no automatic way to

overlay this information into one clear view.

Supply chain visibility is the number one agenda item for 45% of leading global enterprises The Supply Chain Agenda - Cap Gemini Consulting

Major Pains of Retail Supply Chains

Retailers today face many issues that include supplier compliance,

order quantity and timing product delivery through their supply chain.

These issues are mostly related to operational efficiency and the ability

to respond to retail market trends faster.

Demanding market

Whereas in the past retailers could get away with only a few new

assortments per season, today they might rotate stock every few

weeks. Consumers are increasingly demanding and trends change

fast, so staying competitive means ways to quickly match demand. In

most cases consumers want a mix of variety, fashion and quality

along with a socially responsible products at cost-effective prices.

Successful global retailers understand this and are able to respond to

these demands effectively through sourcing management tools,

short product lifecycles and a strong sense of consumer demands.

Murky vision

As supply chains grow in complexity with increased assortments,

processes and links in the chain, information visibility becomes critical.

Unfortunately it also becomes more difficult as multiple versions of

documents such as product trackers, cost sheets, sample trackers and

supplier scorecards are created in different formats. Problems occur

when information is not centralized or there are inadequate ways to

share information. The result of such information gaps is a lack of total

sourcing management awareness into potential supply chain problems

and an inability to provide early warnings and synchronize real time

responsiveness.

Manual processes

Given the complexity in today’s supply chains where multiple internal

departments and third parties are involved, the reality is that each link

in the chain might have their own information management processes

which are not linked to the broader supply chain. These processes

are often not automated and might involve a separate ERP system,

spreadsheets, PDF’s and communication such as phone calls and

emails. Sharing and updating information is often done manually,

resulting in delays and errors in information sharing. These processes

are often cumbersome and don’t easily scale when private label

assortments need to grow.

According to a

recent study on

PLM trends, 54%

of respondents

expressed a desire

to have supply

chain and sourcing

features integrated

within their retail

PLM solution for

complete end-to-

end private label

management.

Pressure points

As retailers struggle to maintain margins and meet market

demands, the pressure on supply chains has increased

requiring leaner inventory and more efficient processes.

These pressures include demands for stronger retail

sourcing, lower cost raw materials, relying on higher

quality suppliers, producing and shipping products faster

and just-in-time with shorter lead times and managing

a longer list of KPI’s to ensure quality, compliance and

supplier performance.

This diagram illustrates current ways retailers manage the

complexity of retail production workflow, using multiple tools.

Complex needs

One of the challenges that both hard and soft goods

retailers are facing is how to manage their unique and

complex product workflow needs across multiple product

lines. Retailers with large product variety and volume

typically rely on workflow process tools referred to as

calendar management or critical path management to

manage their various product flows. These tools provide a

way to connect processes together which are organized

and enable full visibility.

Limitations of Current Sourcing Management Existing product workflow and sourcing management tools, such as spreadsheets, product trackers and/or weekly roll-up

meetings, are often times manually intensive, time consuming and do not have features such as On-line collaboration

and search friendly threaded messaging. Below are some common issues with existing retail sourcing and supply chain

management practices.

Spreadsheet silos

In most cases companies still rely on spreadsheets which are excellent tools in themselves, but are

limited in their ability to serve as a product lifecycle management or supply chain management tools.

Spreadsheets are usually held in different locations by different users and updates are not automatically

shared, which means there are often multiple versions of the truth. Other tools such as Microsoft Project

or Access are also used, but don’t enable complete information roll-up and integration.

Information consolidation

Large organizations have many departments and processes and most current sourcing management

methods are not able to automatically roll-up the disparate order related information into one

view. Data comes from different places, internal and external. Retailers with a large private label

assortments for example are rarely able to consolidate information from same suppliers across the

entire collection or brand.

Calendar conflicts

With global retail sourcing, different teams operate under their own calendars which mean different

holidays, working hours and schedules. This opens great potential for conflicts which are not addressed

in most sourcing management tools. This is further complicated by different time zones and regulations

which might impact the flow between different markets.

Resource planning

Efficient planning and allocation for the appropriate use of resources is critical for today’s retail supply

chains. This requires an ability to identify bottlenecks and quickly shift resources when more or less

intensity of effort is required. Since current retail sourcing practices are not able to automatically

consolidate information centrally, it is difficult to effectively reallocate resources in the case of a critical

event or emergency.

Decision support

Effective supply chains enable decision making that is less reactive and more responsive. Such tools

should be able to model scenarios and recommend solutions to address problems. For example if

samples were signed off late, this would impact the delivery date. Most existing sourcing management

methods are not able to roll up the data to enable responsive decision making.

The biggest challenge that

spreadsheets present is

versioning control. With multiple

versions of a schedule passed

around, it’s often unclear who

owns the master version, or

which one should be used at any

given point. If a deadline is

missed, there’s no automatic

representation of that missed

data on the affected downstream

processes.

Janet Suleski, Research Director at Gartner Research

Effective Retail Sourcing Management & Automation

What is Sourcing Automation?

Sourcing automation as a critical path manager is a technique developed by DuPont in the 1950’s. Sourcing automation

links the customer with its suppliers and automates shared responsibilities and information sharing. This automation

ultimately maps out the duration and path of planned activities to the end of the project, activity can start and finish without

extending the project timeline.

What is Retail Sourcing and Supply Chain Automation?

Supply chain automation manages the entire retail private label product from concept to delivery through innovative

retail product lifecycle management (retail PLM). It incorporates information from the planning, product development,

sourcing, production and logistics stages into a complete view in real-time, enabling a responsive supply chain. Through

sourcing automation, supplier management and data collection, sourcing management tools are able to view personalized

dashboards which roll up data by department, supplier, project or season. These retail sourcing tools provide color coded

indicators which suggest areas that require various levels of action.

How can Retail PLM Help You?

Effective retail PLM tools provide real time visibility into retail sourcing and supply chain functions, allow planning of

tasks and shifting of resources, identifying due dates and milestones and pinpointing the areas where attention is

required. In best practice retailers, retail PLM does this across multiple individual private label products, lines, brands and

divisions. Ultimately retail PLM allows managers to move beyond day-to-day reactive management into a more strategic

management role aligned with more strategic business objectives.

The following view illustrates how a total sourcing management dashboard might look, indicating varying

issues that require attention within the supply chain.

Specific benefits of Retail Sourcing Automation

Choreographs the flow of the end-to-end product

lifecycle

Removes information silos and providesvisibility

into critical issues

Consolidates information, mitigates risk through

early warning

Enables management by exception

Ensures global calendars areautomatically

synched across teams

Manages resources to prevent bottlenecks and

ensures success

Provides business intelligence enabling better

decision making

Automates processes and choreographs

workflows

Keeps all supply chain stakeholders on

schedule

Supports collaboration and updates changes to

all parties involved

Improves KPI’s in the supply chain

Improves product cycle times

Saves time spent on weekly roll-up meetings

Reduces errors, inaccuracies and inefficacies in

the supply chain

What to Look for in a Retail Sourcing Solution?

Configurable -The system should be flexible to enable customization for particular user needs.

Alerts - Should be generated automatically through the system, by email or SMS and sent directly to the

appropriate person for follow up.

To -Do lists - The ability to proactively plan work that needs to be completed in time to ensure a products critical

path is management. This should seamlessly integrate with a user’s dashboard and offer the user a tailored view of

the activities they need to complete.

Automatic roll-up of information - At any time the system should be able to report the entire status of a product

or project in a report or dashboard.

Analytical capability - Users of the system should be able to drilldown into particular issues and adjust and

optimize a products critical path based on their learning.

Planning functions - The tool should allow tasks and resources to be shifted and adjusted based on requirements

of the product or project.

Intuitive interface – The user should be able to quickly and easily learn and adopt the system, as easy as if it were

a Microsoft Office program.

Web based – The system should be easily accessible with a range of internet speeds, browsers and levels of IT

sophistication

CBX Retail Supply Chain Automation CBX Total Sourcing Management is a retail industry workflow process solution that can manage the entire sourcing

process from concept to payment. CBX has infused retail PLM with retail sourcing to deliver supply chain automation

based on over 20 years of working experience with multiple retailers. No current tool on the market has the functionality

and capability offered by the CBX Total Sourcing Management platform.

Customized Dashboards

CBX provides an easy to use, color coded dashboard

that provides user specific alerts, notifications, and

exception based reporting for critical milestone tasks.

These dashboards roll-up information automatically saving

time bringing teams up to speed and are managed and

checked off in a single location.

Alerting Function

Overdue tasks or activities are flagged by an alert in

the dashboard. Email alerts can also be automatically

triggered in the system and sent to the relevant users or

department for resolution.

Analytical Drilldown

Detailed analysis can be performed to assess tasks and

activities to indicate and dig into problem areas. Patterns

can be identified and modifications to the process can

easily be made.

Actual and Planned Tasks

The tool provides clear visibility into actual and planned

task dates, providing the option to adjust production dates

and schedules as required. To do lists are created based

on tasks that need to be completed in order to maintain the

critical path.

Proactive Planning

Provides a project plan for each item and range of items

and provides capability to plan and adjust planning

throughout the product lifecycle.

Intuitive Interface

The CBX interface is similar in look and feel to a standard

Microsoft Office product such as Outlook and Excel which

makes it easy to use and adopt.

Web based

CBX can be accessed with a web browser and standard

internet speed. User can log in to a user specific interface

which is intuitive to understand.

Easy Updates

Allows milestone/task to be easily updated by internal

users, suppliers, partners, or linked to external systems

enabling data to flow accurately to update legacy systems.

Any tasks performed within CBX are automatically

integrated with all internal systems.

A more efficient workflow for retail PLM, including retail

sourcing and supply chain management.

Case Study: Grupo Cortefiel finds its vision

Background

Grupo Cortefiel is one of Europe’s top fashion chain retailers operating the Cortefiel, Pedro del Hierro, Springfield and

Women’ Secret brands and Fifty Factory, a chain of outlet stores. With a central administration and a network of logistics

centers in Madrid, the company has international buying offices in Spain, Hong Kong and India. Founded in Madrid in

1880, today Cortefiel operates in 64 countries, with over 1,700 points of sale an online catalog and over U.S. $2 billion in

sales. Major competitors include Inditex (Zara) and Mango.

Challenge

Prior to implementing CBX Total Sourcing Management, Grupo Cortefiel had no systems to manage their workflow.

Critical supplier information was held in different places and each department, such as women’s, men’s and intimate wear,

worked with spreadsheets and followed separate workflows. Management of supplier agreements was not well organized

and Cortefiel needed a way to automatically bring new suppliers onboard. There was no way of seeing the entire retail

sourcing process which made the management and tracking of the thousands of styles, orders and shipments extremely

complex.

Solution

Grupo Cortefiel decided to implement an integrated supply chain automation tool to handle supplier management, order

tracking, and quality management. The system is able to homogenize planning, design, sourcing, and order functions.

The CBX platform was chosen since it had out of the box modules which could manage all of Cortefiel’s specific supplier,

sourcing, order and quality needs in addition to providing full visibility into their entire supply chain. CBX was easily

adaptable to Cortefiel’s existing system and the intuitive interface allowed users to quickly adopt the web based tool. The

system provided Cortefiel with advanced forecasting, planning and alerts of potential risks, along with robust analytical

capabilities.

Result

CBX provided Cortefiel with end-to-end retail PLM including retail sourcing and supply chain visibility from the concept

to the delivery stage, allowing Cortefiel to cut a significant amount of days out of their supply chain. Various Cortefiel

departments were given the ability to forecast seasonal buying and sourcing plans and assign tasks to relevant teams.

Full visibility into the sourcing progress was achieved as well as the ability to manage technical style specifications,

supplier management was much improved with the platforms ability to report on work in progress status and capture

data from both internal and external users. As a result, Cortefiel’s merchandizing, production and other teams are more

informed and better able to response to the needs of their customers.

Summary

Total Sourcing Management is a forward thinking tool designed to help retailers navigate the complexity of today’s retail

sourcing environment. While it is currently used to some extent by retailers, the potential of retail sourcing and supply

chain, combined with retail PLM is only beginning to be utilized. It today’s difficult economic and retail climate, retailers

will continue to look for ways to optimize their operations and reduce costs. Increasingly they will turn to tools such as

sourcing management tools to enable automation, efficiency and savings.

About CBX Software

CBX Software is the world’s leading Total Sourcing Management solution provider from concept to delivery – combining

people, processes and solutions. CBX helps retailers and brands streamline product development and retail sourcing

all the way through order, production and delivery. Through innovative Sourcing Management, Product Life-cycle

Management (Retail PLM), and Production & Order Management technology solutions, CBX empowers the supply chain

network by driving collaboration to over 15,000 retail & supplier partners, and 30,000 users in more than 50 countries.

For more information, visit www.cbxsoftware.com.

Contact us

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For more information please visit

www.cbxsoftware.com