Exploding Demand for Fashionable Swimwear An ERP System to Manage the Business Becomes Inevitable

Transcription

1 Exploding Demand for Fashionable Swimwear An ERP System to Manage the Business Becomes Inevitable Nowadays, swimwear brands appeal to the market through their highly fashionable and popular merchandise, satisfying customer needs while setting the trend in the world market. Operations have now become more global and challenging, with more colors being sought in increasingly smaller and more difficult orders. However, all this will be made much easier with a resources management & planning system in place. Colorful Swimwear Invented by Westerners, swimwear was designed for those obsessed with outdoor sports. Its primary use was to allow people to wear it and enjoy the outdoors freely. As swimwear involved, so have the styles, as less conservative styles gain popularity. Nowadays, swimwear designers are more willing to show off their talents, innovation and tastes. The sophistication of design, cutting and manufacturing of swimwear products now rival those of other fashions. There is no doubt that swimwear products are an important part of the fashion world. Trendy individuals can now enjoy the fun of mixing and matching swimwear and other fashions, allowing them to enjoy their time in the summer sun, in beaches and swimming pools, and the outback. Previously for sportswear, swimwear has now evolved into a trendy leisure outfit fit for vacations and outings. This year, accessories for swimwear such as chiffon covers and sarong pants were hot and popular as well. Not only do they come in splendid styles, they give wearers a sense of sexiness. As a result, coupled with ever-changing demand, the manufacturing process of swimwear and beachwear has become very complicated and challenging. And now in the heat of summer, the latest trends not only focus on swimwear, but on eye-catching leisure beachwear. Ever-rising Costs: Competitiveness Impeded Many Hong Kong manufacturers have large-scaled manufacturing bases set up in Mainland China. One of the main reasons behind the move is the cost advantage of setting up such bases in Mainland China. However, according to industry sources, manufacturing costs in Mainland China have risen considerably last year, mainly due to a double-digit percentage 2006/8/ _MSC - Swimwear Industry.doc

2 increase in labor costs, the appreciation of RMB, as well as increases in petroleum and energy costs. Another reason was the series of protectionist policies imposed by the U.S. and the E.U. in the latter half of last year on certain Chinese textile exports. Even today, the E.U. and Mainland China have some differences on the issue of China s garment and textile exports. To make matters worse, the U.S. implemented quotas on Chinese textile exports on items such as shirts, pajamas, swimwear and curtains. This came after the sudden increase in Chinese imports into the U.S. after the latter relaxed its trade-quota restrictions in January As a result of the increase in total costs, a lot of manufacturers have sought ways to lower their manufacturing costs. They are committed now more than ever to lowering manufacturing costs. Nevertheless, many enterprises lack useful information and a good network of foreign clients. Therefore, they can only be within the OEM business for foreign brands. Thus, their profits are minimal. For an enterprise to become competitive, they should have an effective management system or an ERP be in place. This will allow the enterprise to become a member of the supply chain. Not only will the problems mentioned above be solved, costsavings can be maximized through a supplementary relationship between the supply-chain members. Besides improved competitiveness, enterprises with an ERP will enjoy: Access to the international market; Acquisition of international market information; Knowledge on how to stay competitive; Stable order sources; Development of more professional businesses due to the focus on self core competency; Enhanced flows through the sharing of information and resources with other supplychain members, resulting in lowered costs and higher margins. Eventually, the enterprise will be capable enough to compete on the international stage. The Essence of the MSC ERP System Facing stiff competition from both overseas and local markets, swimwear and beachwear manufacturers struggle and experience lower profit margins, increased demand from clients (Compliance), and higher direct and indirect costs. This results in a smaller and riskier market for them. Many of them are starting to restructure their business models. As a result, some of their administrative operations such as internal document processing as well as other mechanical works have been relocated to Mainland China (including order tracing, sampling, production planning, shipping, accounting, etc), whereas in Hong Kong, they are enhancing their businesses marketing and sample-design functions, to attract overseas buyers. Under these circumstances, the enterprises must understand the importance of both systemization and computerization. Meanwhile, revitalizing the flows and reorganizing resources are also crucial to the company s success. Our proven MSC ERP (Enterprise Resources Planning) system, which is well founded with workflows, strong networking power, and yet easy to use, is the solution to a company s workflow and resource planning. In fact, the designer of such a system does need to possess professional knowledge regarding the entire garment industry. He/she only needs to understand the movement of workflows. The designer only needs to input into the system the management concept and supply-chain information to allow users obtain what they want. 2006/8/ _MSC - Swimwear Industry.doc

3 Daily demands are extremely pressing for most CEOs of the swimwear enterprises, usually being fully occupied each day by their numerous office duties. Do they really have time for critical thinking? The answer lies on whether they can standardize and streamline their work. In fact, decision makers in the sophisticated garment-industry always ask themselves a few questions to clear their mind up for making good decisions. The questions are as follows: How their clientele changes. There may be a lot different reasons for more and fewer clients. Decision makers need to know these reasons, so as to plan for the future. Profitability analysis on clients and products. Decision makers need to know these to be able to focus on high-profit-margin clients and products. How the costs change. They need to know this to understand how the gross profit margins change. How good the sales are. They need to know about order and delivery schedules. How sampling and ordering relate to each other. How well the suppliers are doing. Decision makers need to look at the suppliers standards in terms of product quality and delivery schedule. How the garment and material inventories are doing as well as the reason for any increase in inventories. MSC ERP does provide a CEO Panel Expert System which offers major result-indicators analysis reports. With this business and operational data, businesses can for each project analyze, plan, and standardize different KPI s (key performance indicators) and ROI business strategies. Through the ERP system, the data on an enterprise will be processed and its performance analyzed. However, the data will not only come from one internal ERP system. Rather, it can be shared amongst different business partners through communication and synergies. Meanwhile, the whole supply chain can also be monitored through the analysis of internal and external data. Furthermore, with regards to industrial standards, MSC strives to standardize our ERP Expert System for all garment enterprises. This will lead to more reference analysis reports in the system. 1. Real-time Reaction indicates the Pros and Cons of Managing the Business Although not as definite and applies to all businesses, the importance of real-time reaction cannot be overlooked. Management in the garment industry needs to be very familiar with the characteristics of their products. For example, they need to know which of their products sell well, are associated with high profit margins, have high defect rates, have seasonality (related to the trends of the whole fashion industry) and geographical uniqueness. There is no single mode of operating their business. They need to be quick 2006/8/ _MSC - Swimwear Industry.doc

4 and able to react to changes. With respect to their clients, management needs to know which clients are reliable and needed so that they can reinforce their services to these clients while services for less reliable clients can further be controlled (for example, on credit terms). Regarding synergies with other manufacturers, historical information will be needed at times to find out who the reliable partners are. More analysis and statistical tools are needed to equip management with the facts, both pros and cons, of running their business. Unique sales strategies can then be formulated. If different systems work independently to process the data, efficiency decreases. As a result, comprehensive information cannot be put into an analysis report good enough for real-time reaction. Only with MSC Expert System can these problems can be solved. VEST OTHERS 2. Prevention of Administrative Mistakes The most obvious example is the account receivable for a particular client exceeding a certain preset credit limit. Currently, the computer has to give alert signals and prohibit deliveries. Also, the computer must give alert signals when purchases exceed the stock inventory and prohibit further purchases. The same things apply to the moment when there is no supporting official document upon expiry of certain items. The MSC System gives alerts as a preventive measure on the administrative front. Errors can then be avoided. 3. A Way to Retain Staff s Talents and Expertise and Make them Assets (KM) of the Company What is talent knowledge management really? The idea is simple. It is a way to capture all the information regarding the business operation of an enterprise and digitally store them in a computer. This way, people of related capacity can then search for the specific information they want. But what is the purpose of such searching? An example is a new business manager in the garment industry. He / She may not have the relevant experience in dealing with the enterprise s previous clients. However, he / she can search for them using the computer system. He / She can even share with others the experience of dealing with such clients afterwards by inputting data into the computer as well aiding other colleagues in the future. The longer the enterprise has been running, the more intellectual its assets are. The MSC CEO Panel Expert System can better make use of these assets. While these tools are used for searching, they can be combined with other statistical and analytical tools to solve all an enterprise s problems, big or small. As an MSC consultant explained, not only do they implement the ERP to computerize a business, but also analyze other strategic workflows involved on the upper end of an enterprise. In this sense, the use of ERP is not only a matter of concern for the IT manager, but also those for the CEO as well as all departmental managers. Only when an enterprise utilizes such a system from the top-down can they enjoy all the benefits of using the ERP. At the same time, the enterprise can also improve its competitiveness. In fact, using the ERP System s MSC CEP Panel will bring about lots of operational know-how (business intelligence). Just imagine how challenging it is for the management staff to manage different things. If things are done well, great benefits can be reaped. MSC s industry management system is a key to success in garment-industry management, a must have for all CEOs who want manage their enterprises effectively. 2006/8/ _MSC - Swimwear Industry.doc

5 Hong Kong s manufacturers face a series of challenges from all sides. They face the problem of an appreciating RMB because they have their manufacturing bases set up in Mainland China. Today, industrial practitioners envisage further increases in the value of RMB. This means it is now getting much more difficult for manufacturers to compete in the international market with rising labor costs and hence rising product prices. This is just like The Boiling Frog Syndrome - killing a frog slowly with warm yet increasingly hotter water. Manufacturers are going to suffer more and more. The market is always changing, but most enterprises do not recognize things are and will getting worse. This is a mental trap, as they tend to think positively towards each matter. Now, the macro environment has already changed the understanding of some basic matters, which will affect all enterprises. Will their fortunes be like that of the frog waiting for the moment of mortality? Or will they find some solution that will allow them to cope with a constantly changing environment? 2006/8/ _MSC - Swimwear Industry.doc