Advances in Global Visibility & Performance
Consumer Goods Technology, May/June 1999 - By Pat Keys, Contributing Editor

Before the introduction of today's sophisticated inventory tracking and management applications, geographic and national boundaries represented logistical boundaries and logistical nightmares for many companies.

With these new systems in place, the same companies now find global commerce easier and more economical.

Some applications bring visibility to the supply pipeline by monitoring brokers, agents, and suppliers, linking production locations on one side of the world with the marketplace on the other. These systems offer product visibility to the ordering, production, shipping, and warehousing processes. Other software shepherds goods through various customs, financial institutions, and insurance requirements as they cross international boundaries.

The pipeline more nearly becomes one fluid conduit, where suppliers and customers act as partners rather than as barriers to business. Companies achieve economies in inventory, storage handling, and transportation. Longer delivery cycles and lack of pipeline visibility are no longer the price paid for lower production costs.

Pipeline Visibility for Warnaco

RockBlocks, from RockPort Trade Systems Inc., tracks products from global sourcing and purchasing to shipping and tracking to the distribution center. Sue Welch, RockPort's chief executive officer, says, "We focus on sourcing and purchasing throughout the world. RockBlocks is designed to bring the client up to date on any part of the process." The software starts with the purchase order, generating international letters of credit and creating an automated interface with the banks and payment information along the way.

When Warnaco Inc. found it was being bombarded with calls ‘Where is this?' and 'Where is that?' it turned to RockPort's RockBlocks for answers. “We had no automated system to tell us the status of an order," says Dan Entac, project manager. Warnaco operates on all levels of the apparel business, from sourcing, manufacturing, and distribution through retail, depending on the brand.

The company began using RockBlocks in mid-1998 for its Calvin Klein line. Entac says although it is too soon to tell, there arc indications the software has helped with sourcing and the company's ability to drop-ship to customers.

"We're tightening up our processes, and our information is more accurate. But you have to remember, we are still working with people. They key is in the information, and that information flows through, right or wrong," Entac says.

Warnaco found and corrected a small gap in the tracking software. To meet its need for information, all links in the product chain had to be able to take and send EDT. "We had to supplement some of the smaller links (suppliers) in our pipeline with PCs so they could send and receive EDI transactions."

The next step for Warnaco is to expand RockBlocks to its intimate apparel lines, including Fruit-of-the-Loom, Victoria's Secret, and Olga. "This will include raw materials, components, and shipping assembled goods. RockBlocks will help us navigate the NAFTA regulations and Mexican reconciliation process," he says.

Rothco

Import/export company Rothco of Smithtown, NY turned to Blinco Systems Inc., RockPort's primary competitor. Blinco's 3rdwave software is designed to provide transactional visibility throughout the product pipeline. 3rdwave starts with global sourcing and purchasing. However, 3rdwave carries the information beyond delivery to the distribution center to handle sales order management and accounting functions..

3rdwave delivers the inventory visibility throughout the product path to coordinate incoming and outgoing inventory and warehousing.

"Our system helps manage and track the product from the purchase of the product, to moving the product, to storing. Selling, and shipping the product. We can account for it at every step," says vice president Ned Blinick. "The major difference is 3rdwave's ability to do transaction level and company level profitability analysis. It manages the complete cycle."

What was Rothco's need? The company distributes military-type apparel and accessories and takes 750 to 900 orders per day. It imports 40% of its product, and exports 30%.

Blinick explains, "Some of Rothco's orders are 12 lines long. Because they sell apparel, they must list the type of apparel, the style, the size, the color. They have to be able to make sure it is available in the warehouse. Then they have to have it ready to ship within three hours."

3rdwave delivers the inventory visibility throughout the product path to coordinate incoming and outgoing inventory and warehousing. It also handles discounting capabilities and on-line credit checks.

3rdwave has been configured to accept information electronically or manually. "With electronic information, each new entry validates the information that is already in the system. If the purchase order is already in the system, the system will ask 'yes' or 'no' questions if your new information is different from the existing. There is still 'garbage in-garbage out.' Validation is important because once the information has been accepted by the database, all the 'power' goes to the machine," Blinick says.

Robert Bosch's Global Passport

For Robert Bosch Corp., Vastera's EMS- 2000 Global Passport has brought export compliance uniformity and peace of mind to its operations. "We wanted to ensure that all locations performed export compliance in a consistent manner," says Kamran Ashraf, director, corporate information systems. "We wanted to guarantee that all of our divisions complied with export rules."

Bosch starting rolling out the export compliance module to its six U.S. divisions about a year ago.

The most significant business improvement, Ashraf says, is "In having the confidence that we are doing export compliance properly. We want to keep ourselves on the good side of the Department of Commerce. That's a soft benefit to us."

This summer the company expects to start looking at Vastera's import module. While exporting represents less than 10% of its business, importing accounts for nearly a third of its U.S. business. ''Import is such a critical part of our business. We will be doing a thorough job of testing it," Ashraf says.

Is E-Biz Next?

"As retail and consumer buying patterns change, companies are going to have to react faster than ever before. They will need compliance answers. 'Can we sell a certain product in a certain country, such as a weapon'? Can we import a certain product from that country, such as apparel?"' Ferrere says.

"We're tightening up our processes and our information is more accurate." Dan Entac, Warnaco

The rapid acceptance of the Internet and e-business are causing these software vendors to develop Web-enabled products or the ability to let customers access information via the Web.

A positive by-product will be that these software applications may become affordable for small- to mid-size companies. "There is no 'lite' product for these companies. Rules arc rules, and export rules apply to everyone," Ferrere points out.

Says Grisanti, "Since November we have offered managed transaction business at GLS.com. We now offer Web page access to compliance screening and export data and regulations."

But none of these companies has committed to exclusive Web operations. "The Web is slower than a client/server application, so until it is, 3rdwave will never be exclusively Web-enabled," says Blinick.

"We wanted to ensure that all locations performed export compliance in a consistent manner." Kamran Ashraf, Robert Bosch Corp.

As global commerce grows, companies will have greater need to manage the various pieces of information along the supply pipeline.

Current solutions are within economic reach of only the largest companies, and the early adopters are beginning to realize business benefits. As with other business applications, the Web may open the door for smaller companies to likewise gain this competitive edge.

As global companies experience the first wave of success, they will pressure vendors to update applications to meet as-yet-unidentified needs. Perhaps leading middle-tier companies should also pressure for solutions rather than be content to wait for trickledown technology.

For related information, please go to:
3rdwave Retail Sourcing & Distribution
3rdwave CGD (for Consumer Goods Distributors)
Rothco Case Study