From Right Brain to Retail: Cutting Time-to-Market with PLM
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1 From Right Brain to Retail: Cutting Time-to-Market with PLM
2 Preface Globalization has made the apparel and footwear industry more challenging than ever. Many companies that used to manufacture, today also design, source and distribute. There is greater competition, consumers are much more demanding and distribution channels are shrinking. Consolidation is having an impact on nearly every aspect of the marketplace. In 1980 there were 200 different department store nameplates in the United States. Today, that figure has dwindled to just 17. The industry has become increasingly consumer and design-driven as fashion trends change overnight. Consumers demand new designs, greater choice and expect immediate availability in a wide range of colors and sizes, which has led to even shorter product lifecycles and larger numbers of SKUs for companies to manage. Global sourcing is common, supply chains are often complex and lead times long. High, on-time delivery performance is critical and the seasonal nature of many products and collections increases the risk of inventory exposure. The defining line between retailers and suppliers has become blurred. Suppliers are moving into the retail sector, and retailers are taking greater control of the supply chain. As a result, responsibility for store-ready inventory is shifting up the supply chain. In addition, many brand owners are opening retail stores. If the right product mix is not in the store at the right time, it results in lost sales opportunities, damage to the brand image, low sell-through rates on product lines and ticket price markdowns, which are often necessary to shift merchandise and minimize obsolescent inventory. All of these things squeeze margins. So in order to gain a competitive advantage, the firm management of your endto-end supply chain is essential. As a result your demand and production planning will become increasingly critical and more complex. And a wrong decision can have major ramifications. Almost every fashion* company has the opportunity to tap into and use the same source of supply as its competitors, at a similar cost, with similar quality and similar delivery terms. This can mean little differentiation in the merchandise your company sources. And for brands, design cachet is particularly at risk because of the ease and swiftness with which your signature look can be copied. So how do you compete in the future? How can a fashion company create distinction? The answer is greater customer intimacy. This is achieved by providing a unique experience that meets the wants, needs and demands of your customers. Customer intimacy is the new mantra for differentiating your merchandise and service proposition. To compete successfully you need to understand and service your customers needs and wishes better than ever before. With all these challenges in mind, investing in processes and technology, in order to achieve best-in-class performance, is more important than ever. The platform to support process improvement and optimize performance is an enterprise resource planning (ERP) system. But remember, not all ERP vendors are equal, and no two ERP solutions are the same. At Lawson, we created this guide to help you make a more informed choice. It is by no means definitive, but it will highlight the key factors you ll need to take into account to help you in your selection. *Lawson defines the fashion industry to include companies that design/source/distribute, wholesale or manufacture apparel, footwear, home textiles,or accessories.
3 Table of Contents Preface... 2 I. Executive Summary... 4 II. Introduction: From Concept to Reality... 4 III. Why PLM? Why Now?... 5 Storyboarding...7 Design CAD tools...7 Fabric and trim management...7 Product management...7 Workflow management...7 Vendor management...7 V. Why PLM with ERP?... 9 VI. Why Lawson?...10 About Lawson...12
4 Lawson Fashion PLM is a good, collaborative solution, and it gives us the tools we need to improve the business Bill Jarman, CIO, Courtaulds UK Ltd I. Executive Summary Fashion innovations begin as concepts in the designer s mind (in the brain s right hemisphere, to be exact). They end up as garments, footwear and accessories on the retailer s shelves. If successful, these items move quickly into the consumer s wardrobe. The journey from concept to consumer, from mind to market, has many stages. Current market pressures are forcing brand owners, manufacturers, design and source companies and their suppliers to complete these stages more quickly. Many experts suggest that all apparel companies need to cut their total lead-times to market by 50 percent or more over the next two to five years. Fast fashion leaders have demonstrated the advantages of shorter product cycles that are more directly influenced by point-of-sale data on customer demand. Selling into trends in order to maximize their first-mover advantage and minimize mark-downs, fast fashion leaders have stepped up the pace of competition across the industry. This is a formidable challenge. How can brand owners, sourcing companies, manufacturers, and their supply chains work twice as fast as they do now when many feel they are already going at nose-bleed speed? The title of a recent Gartner industry research report, Fast Fashion Demands PLM, provides one answer. The authors conclude, Manufacturers without effective PLM strategies to address the common pain points will be disadvantaged. These strategies are generally embodied in product lifecycle management (PLM) software that provides technical specifications and product data management along with online access to electronic storyboarding, designing tools, design libraries, material libraries, costing, sourcing and tracking. Putting everything online increases collaboration within the supply chain while reducing miscommunication, sampling iterations, and critical-path bottlenecks. As a result, PLM enables faster time-to-market, better cost structures, and improved quality. Connecting the product information in a PLM system to the business information in the company s ERP system maximizes the benefits of both. This creates what Robert McKee, the Industry Strategy Director for Lawson Fashion, calls holistic PLM the integration of concept and execution, of analytics and demand information, of creativity and process, through production and delivery to the retail channel and end consumer. We are better equipped to develop more appealing designs and create higher consumer demand and increased sales. Head of Design, Giny & Jony II. Introduction: From Concept to Reality The journey to market begins in the mind. The brain has two hemispheres with unique processing styles. The right brain thinks in images and registers the impact of impressions. It takes the sensory input, thoughts and feelings streaming in nonstop and creates the big picture of reality, moment by moment. It is the artist in us, imaginatively exploring the possibilities of each moment and thinking outside the box. By contrast, the logical left brain is the technician and manager. It thrives on details, which it organizes into categories and hierarchies. It creates time sequences, logical constructs, and repeatable processes. It thinks in words and numbers. Neuroanatomist, Jill Bolte Taylor, compares the right brain to a parallel processor and the left brain to a serial processor that work together. Few of us except stroke victims ever experience their distinct processing styles separately. That s because the whole brain seamlessly integrates right and left brain activity into a single view of
5 reality. We take this holistic perception, our birthright, for granted, just as we take the processing mode that is dominant in us as natural. In the apparel, footwear, home textiles and accessories industry, the concept designer is usually right-brain dominant and the technical designer is usually left-brain dominant. Concept designers have a talent for sketching an idea that makes a desirable impression on both the senses and the emotions. Technical designers figure out how to take that concept and turn it into specifications for a real physical garment at a brand-appropriate cost point, on a schedule. Through many process iterations involving increasing numbers of people in the company and in the supply chain, the design becomes a style that succeeds or fails in retail stores. There are many inherent communication challenges between people who think outside the box and those who prefer structured, repeatable processes, or between detail people and people who think in images. Operating outside their comfort zone, usually under time pressure, each type can easily misunderstand each other. To make matters more difficult, they are seldom in the same place at the same time. Design and merchandising teams may be in different cities; their suppliers and manufacturers may be on different continents. Last but not least, the transmission methods used to communicate visions, revisions and technical specifications have historically been either text-heavy or graphics-heavy. As a result, it is still rare to find an organization where a single version of the truth prevails throughout the entire product lifecycle. PLM software aims to create that elusive single version of the truth a holistic view that parallels the brain s ability to seamlessly integrate processes from both hemispheres. Ideally, a PLM solution facilitates all the creative and all the logical processes involved in design, planning, and production throughout the lifecycle of a single product and the collection to which it belongs. In practice, however, various software vendors achieve differing levels of functionality and integration. Storyboarding, in particular, is the one functional area that is not well-served across the industry, according to Gartner. Another serious limitation in most PLM systems is that they cannot be connected with ERP systems. As a result, a given PLM system may operate in a vacuum from a business perspective. Lawson Fashion PLM has created more consistency and continuity in the way we work together internally from design and procurement to sourcing and production. System Analyst. Giny & Jony III. Why PLM? Why Now? Robert McKee, Lawson Fashion Industry Strategy Director, says, Almost all the available time savings have been squeezed out of the manufacturing process. Most of the remaining opportunities for future time savings come from the development phase. That s why PLM is important now. That is also the reason why the industry is quickly moving toward a continuum with all participants connected, literally or virtually. New components are being created all the time, from fiber to yarn to textile to product. There is a creative side and a pragmatic side to the development of all these components, and each person in the sequence needs input from the person ahead of them. How better to predict demand than to work directly with your demand sources? You keep passing that information upstream or downstream, depending on where you are in the sequence. The retailer talks to the apparel manufacturer, the apparel manufacturer talks to the textile manufacturer, who talks to the yarn supplier, who talks to the fiber producer. And they all try to talk about what it is that they believe will happen next in the development process. Concurrently, negotiations about price and delivery date that
6 are going on among these entities will impact what is finally specified, McKee says. Formerly, telex, fax, and standalone product data management applications were the medium for these messages. All these predecessors to PLM came with drawbacks that resulted in redundant data entry, poor visibility, and incomplete or inefficient communication internally and externally. As always, the medium molded the message. Telex was text-only, so both the sender and receiver needed to visualize what the words represented; frequently, their visualizations differed from each other and from the real thing. Facsimile allowed images and characters to be transmitted together, but both were blurry. enabled the sender to attach clear images and spreadsheets of measurements, but messages went into individual mailboxes. Some people didn t get the memo; others retrieved and circulated out-of-date information from their mailbox. Standalone product data management (PDM) fulfilled the need for a central repository for style information and change management, but it lacked integrated storyboarding, design tools, material development and management tools, and it did not reach far into the supply chain. In addition, users still had to retrieve information from s and key it into the PDM system. When it comes to issues of time to market and speed of replenishment, the vast majority of the time savings will come from improvements in communication, McKee says. Web-based PLM ensures that a single version of the truth is available to all participants from start to finish of the product lifecycle, and that all the inputs, outputs and processes of this product lifecycle can be used as a template or recipe for future products or product variations. During the development process, every participant has the opportunity to pass information on to everybody else as it becomes available rather than at specific points in time when one participant hands off to another. This update ability improves readiness up and down the supply chain. By such means, a holistic approach can create significant time savings over dealing with issues discretely. We have achieved a significant saving in the time it used to take to record and update information, make changes and communicate internally and with external partners Clare Hooley, Brand Manager Courtaulds UK Ltd IV. Business Benefits of PLM In the development phase as most companies currently work, without PLM, everything is scattered across s and spreadsheets. It is hard for a development manager to get business intelligence to evaluate vendor performance, track work in process, or see component usage. A reasonably comprehensive PLM system enables a manager to be both proactive and reactive, as needed. On the proactive side, it provides visibility and metrics; what can be seen and measured can be improved. On the reactive side, it enables the manager to find out where there are delays and problems and solve them before they can derail the schedule. From the perspective of supply chain participants, PLM offers unparalleled ease of use. It brings right into the system, routes the specification package to all the appropriate people, and automatically notifies them when a specification is changed, even providing a link to the style information. Each module of a PLM system should provide specific business benefits that contribute to the net increases in time-to-market, quality, and improved cost structure. For example:
7 Storyboarding enables global collaboration on the development of concepts, themes and collections. Merchandising and development managers can share one sketch or many with customers and suppliers. Such collaboration increases the number of on-trend products that sell at full price. An electronic Storyboard is truly a presentation tool and truly a database. Design CAD tools provide fashion-specific ways to speed drawing time and shorten design cycles. By drawing to scale, they reduce sampling iterations. Fabric and trim management provides collaborative, central tracking of color approval and raw material testing statuses in addition to development information for fabric and trim designs. This reveals opportunities to use the same fabric or trim across styles, lines or divisions. By leveraging aggregated usage, the purchasing agent can negotiate lower prices, resulting in lower product costs. Product management is the product development control panel which enables companies to create, review and approve all elements of a style specification. It supports core PDM (product data management) functionality, technical specifications, BOM, construction, overview and sketch, while collaborative tools can be added to support sample management and costing. Workflow management provides cross-functional visibility into development collaboration and tracks preproduction milestones through time and action calendars. By helping all parties coordinate their activities, it contributes directly to a shorter time-to-market. Vendor management streamlines the request for quote, cost evaluation and vendor selection process. It facilitates complex costing scenarios by ensuring that quotes come back in the form they are requested. When quotes are automatically compiled with a calculated average cost across the entire size range, and with a view of all quotes from all vendors, both current and historical, better decisions can be made earlier in the product lifecycle. Supporting all the modules, a centralized, shared database contains reusable styles and components. It acts as a design library. Color, style, fabric, trim and image templates are stored there, along with all the specifications and development process information. This database is key to fast fashion success, according to Prasham Kamdar. He is the managing director of Ptex Solutions, the pioneer and leading PLM technology provider in the Indian apparel, footwear, home textiles and accessories industry. Ptex is part of Prasam Exports, which also includes woven and knit garment manufacturing companies. At its simplest, fast fashion consists of the ability to very quickly introduce new product in a season. Kamdar says, Depending on how efficient the designers are, the design creation to design adoption ratio is 2 to 4 times. In a good company, this ratio would be 2:1, however in less efficient companies it would be 4:1. Suppose that a season is 26 weeks, divided into multiple sub-seasons. In the first four to five
8 weeks, the response from retailers is that floral prints are doing very well compared to stripes. Kamdar says, If you have PLM, you go back to the design library and retrieve the extra floral designs held in the database. Designers can make multiple changes quickly, enabling you to re-introduce the designs. This will allow you to introduce more styles that are selling well and increase the overall sales. That is how important a PLM system is for the company. If you don t have PLM, you would go back to retrieve your unused floral prints, but they are probably stored on personal computers belonging to individual designers. Even if I have stored it in my computer, it will take a while for me to retrieve it. If I leave the company and give the computer to you, no matter how systematically I have stored it, you will have trouble retrieving it, because I have stored it my way. PLM allows you to store these designs in a systematic way on the servers so anyone can retrieve it. This way a company relies on its system rather than on an individual s memory, Kamdar says. There is another issue with storing designs on a PC, Kamdar says. In my mind, the extra designs are the intellectual property of the company. Nonetheless, they are stored on the individual s computer. When a person leaves, which happens frequently, all the intellectual property represented by the designs usually go with them. It is not necessarily that they are stealing; they are taking their portfolio. PLM allows you to create intellectual property for the business and store it on the business system where it belongs. Moreover, if you end up in a situation where a product is selling incredibly well but your vendor does not have sufficient capacity to fulfill the additional demand in a timely manner, you are going to have to find additional producers. Either the experienced vendor you ve been working with has to expand capacity, or you have to find other suppliers who are capable of making the product to the same level so there is an imperceptible difference between one product and the next. With PLM, this would have been done at the beginning of the process so you have a choice of additional vendors that were reviewed and the information stored. Once a new vendor is selected, you will still need to ensure that they can produce the garments according to your specifications and that will require sampling. In the case of PLM, this can easily be done and kept together in the same product with the use of variations. Without the product data and process instructions stored in a PLM system, that second supplier will experience longer lead times.
9 V. Why PLM with ERP? To recapitulate the analogy mentioned earlier, the creative right brain complements the logical left brain, and their integrated processing produces the individual s holistic perception of the world. Similarly, the concept designer exemplifies right-brain creativity and the technical designer exemplifies left-brain logic in the apparel, footwear, home textiles and accessories industry. A PLM system enables these two types (who are represented at every level of the development process and supply chain) to have a holistic perception of the desired style and the steps needed to produce it. PLM and ERP also complement each other. PLM is all about the pursuit of innovation. ERP is all about transactions. PLM goes from idea to production; ERP goes from production to order fulfillment. PLM manages the development process through all its iterations, and ERP monitors mass production operations. A proper PLM system is going to accumulate and store a lot of vendor information. It comes from the iterative process of on-going price negotiation, the development of fibers and fabrics, and so on. Inside every execution element, you accumulate another data point for analytics. You can t execute without creating analytics, you can t analyze unless you execute. It s like yin and yang, McKee points out. The idea of the holistic PLM approach is that you want this data linked in with your entire set of activities all the way through to delivery to the customer and any information the retailer will share with you. Too many organizations focus exclusively on how the ERP system executes their customer orders and purchase orders. With an ERP plus PLM data solution, they have all the data that they need to run better, smarter, and faster. Analyze it: How many products do you develop that never make it? Is it always products like this or like that? How many products actually sell through? The answers to these and similar questions lead to better, more strategic sourcing and better product development. While this is important for large manufacturers, sourcing companies, brand owners and retailers with private brands, it applies even more to medium-sized and small companies. Most smaller organizations tend to think that PLM is something just for the big companies. Smaller organizations actually stand to benefit even more from PLM. They have the same problems as the big companies time-to-market and margin pressures, globalized sourcing, and so on and fewer resources to solve them. Their only hope of getting ahead of the big competition is by adopting a much better or much different approach. PLM can be a clear differentiator for them, McKee says.
10 VI. Why Lawson? Lawson Fashion PLM is a comprehensive product lifecycle management solution, from design through to technical specification. Lawson is a leading enterprise management system vendor, with a key focus on the apparel, footwear, home textiles and accessories industry. We have 350 customers in the industry around the globe. Our Lawson Fashion ERP solution is used by brand owners, manufacturers, sourcing companies and retailers with private brands. Our financial stability, market position, and global presence enable us to dedicate substantial and relevant expertise to their support. Lawson Fashion PLM is designed, built and implemented by apparel industry experts with functionality built on industry best practices. It is a mature solution successfully implemented by many manufacturers in the last six years. It is a true web-based (not just web-enabled) platform, designed for optimal collaboration and ease of use. We aim to simplify the management of complex global supply chains to help you shorten your time-to-market, improve delivery performance and increase efficiency to improve your margins. Over 300 modifiable material, style and image templates and color palettes get clients up and running quickly on Lawson Fashion PLM. Rapid deployment (typically 3 12 months) means faster return on investment (ROI) in addition to faster time to market. With our combination of fashion industry-specific expertise, proven capabilities and the fact no additional coding is required to configure the forms, Lawson offers greater overall value and a lower total cost of ownership (TCO). Peter Bambridge, Mark Halpern, Gartner, Fast Fashion Demands PLM, Research ID Number: G , 22 October 2007, page 1. Jill Bolte Taylor, My Stroke of Insight (Viking, 2006), pages Peter Bambridge, Mark Halpern, Gartner, MarketScope for PLM in Apparel, Footwear, and Accessories, Research ID Number: G , 30 March 2008, page 4 10
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12 Headquarters: USA 380 St. Peter Street St. Paul, MN Tel Fas en Regional Offices: Americas United States Brazil, Chile, Canada, Tel Mexico, Honduras, United States, Venezuela Asia Singapore China, Hong Kong, Tel India, Indonesia, Japan, Fax Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand, Vietnam Australia & Oceania Australia Australia, New Zealand Tel Fax infoanz@lawson.com Northern Europe Sweden Denmark, Estonia, Finland, Tel Norway, Sweden Fax infonordic@lawson.com Northwestern Europe United Kingdom Belgium, The Netherlands, Tel Ireland, South Africa, Fax United Kingdom infonw@lawson.com Central Europe Germany Austria, Czech Republic, Tel Germany, Hungary, Fax Poland, Slovakia, infoce@lawson.com Switzerland Southern Europe France France, Israel, Italy, Tel Portugal, Spain Fax infoso@lawson.com About Lawson In 2006, Lawson Software and Intentia merged to form the new Lawson. We deliver software and implementation services to 4,000 customers in manufacturing, distribution and services industries across 40 countries. Our Financials, Human Capital Management, Supply Chain Management, Business Intelligence, Asset Management and industry-specific solutions help customers streamline processes and enhance their business performance. And by radically simplifying the process of deploying and using our applications, we help customers reduce costs while increasing their flexibility. Why Lawson? Because simpler is better. FaB en
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