If you're in the business of making a few million pairs of blue jeans a year, not much is more important than getting "blue" exactly right. It's why a jeans designer at VF Corp. will express mail swatches dipped in dye back and forth with factories around the world as many times as necessary to make sure designers and manufacturers agree on just the right shade. And it's part of the reason it takes as long as nine months to design a new pair of jeans and get them on the shelves.
VF believes finding a more efficient way to agree on blue, and other technology-enabled improvements in how it designs new products and manages logistics, could save it $100 million a year and cut months off the time to get a new design to market. "If you look at the cycle times from design to retail shelf, about two-thirds is spent in product development," says Boyd Rogers, VF's VP of supply chain and technology. "The new system has the potential to remove months from the production cycle, depending how many iterations are made to get the correct color."
VF, the world's largest apparel maker with brands such as Lee Jeans, Vanity Fair lingerie, and North Face outdoor gear, expects that getting new styles to shoppers faster will make it more competitive. To do that, it's creating an IT platform of collaborative design tools that can draw on a database of information such as material characteristics, costs, colors, and templates of past designs. By year's end, the company expects to have the tools deployed across its five U.S. divisions and later build real-time ties to its manufacturers around the world, since 90% of its manufacturing is outside the United States. "We think $100 million annually over the next five years is absolutely doable," Rogers says. "It's becoming increasingly important to collaborate tightly with our divisions and partners around the world to cut cycle times."
Technology improvements should help VF save $100 million a year and cut cycle times, Rogers says.
Photo by Kyle Hood
Apparel makers are starting to embrace Web-based design-collaboration tools and product-life-cycle-management software to cut material and supply-chain costs, extend global ties, trim design-cycle times, and react quicker to changing fashion tastes. VF's supply-chain and IT teams decided available off-the-shelf software couldn't meet most of the company's needs, so they're having much of the project custom coded, building Java-based design-and-analysis tools to run on the Linux operating system, connected by IBM middleware and drawing on an IBM DB2 database.
Two key elements are the color-technology software from GretagMacbeth LLC to speed electronic collaborating on color choices and the custom-built Strategic Interaction Development Environment, or Stride, which contains graphic tools to manage garment details, a raw-materials database to house garment specifications, and more. Tying into these platforms are financial tools for tasks such as calculating material and shipping costs and requesting quotes from third-party manufacturers. Once a garment is approved, the details will be connected to an SAP Material Management Module.
Using the integrated systems, a design team will be able to input product ideas and attach a sketch or set of design specifications. If a similar design exists, the designer can save time by copying the information from another product line and reusing the template. The color-technology system will tie into the Stride system. And the two will let information be shared more easily--for example, in real time with VF's sourcing office in Hong Kong, which contracts with third-party manufacturers throughout Asia to sew the clothes that VF designs.
Fashion meets finance in the collaboration between U.S. designers and Hong Kong sourcing specialists, as the two groups discuss prices of fabric, trim, buttons, and other materials designers want, finding the right mix to make a product that will inspire shoppers and fill the coffers. In the future, VF will let raw-material suppliers and manufacturers connect to the Stride system for real-time interaction on issues related to materials and specifications.
The ability to share the information via the Internet makes it feasible for companies to collaborate in real time with offshore factories and other supply-chain partners in fairly remote regions in countries such as Bangladesh, Cambodia, the Dominican Republic, India, and Vietnam. And global cooperation will become more important since the World Trade Organization, as of Jan. 1, dismantled the last piece of the nearly 40-year-old quota system on textiles imports. The quotas, which limited imports from low-cost manufacturers in developing countries, are gone, but tariffs remain in place. VF does about 40% of its manufacturing in the Asia-Pacific region, up from 20% three years ago.
Global competition for textiles production and the elimination of quotas will mean consolidation of sourcing activities where apparel companies have larger, closer relationships with core factories, predicts Nate Herman, director of international trade at the American Apparel and Footwear Association. "These factories will demand that apparel companies use technology to increase efficiencies in production," Herman says.
Other apparel companies are moving at a "snail's pace" to reach that level of performance, says Navi Radjou, VP of enterprise applications at Forrester Research. "Many of the apparel retailers that sell their own brands don't even have a common ERP platform," Radjou says. "Now they must focus on integration with trading partners. Apparel companies know it must be done to stay competitive because trade quotas on textiles and materials into the U.S. have been lifted."
Vendors of tools for product-life-cycle management and enterprise resource planning haven't paid much attention to the apparel industry's needs, focusing on bigger spenders such as the aerospace, electronics, and automotive industries. VF is buying the color technology, but it has hired India-based Quinnox to code the Stride platform based on VF specifications. J. Jill chose an off-the-shelf collaborative PLM suite from Freeborders Inc., but it's working with the vendor to add apparel-specific tools as it expands its effort.
At the same time that J. Jill has shifted its business model from catalog to specialty retail, it has been doing more in-house design of shirts, skirts, and pants. Today, more than 90% of the designs are its own. "The design process requires collaboration as designers create and change ideas and compare [them] against costs, schedules, and manufacturing plans," Pearson says.
J. Jill takes up to a year to get a product from concept to shelves, and it's looking to shave as much as 25% off that cycle, in part by getting the company working in the Freeborders suite. But it's not just about reducing cycle times. It's about making sure the data is correct, having product-status visibility in all development stages, and knowing the clothing line will drive the profit margins required to make it successful. "You can't get information in our industry on performance of on-time delivery, quality, price, testing standards, and root-cause analysis because you lack the data support that gives a real-time collaborative view," Pearson says. "Six Sigma doesn't apply to the apparel industry like electronics because you don't have the data to support the analysis."
J. Jill just completed phase one, which began in November, in which IT analysts detailed its processes to make sure the system will work. It's scheduled to roll out the system across the business in August. Along the way, Pearson is working with Freeborders on specific requirements for modules in development, such as sourcing and quality assurance.
It's the type of technology Guess Inc. CIO Michael Relich has on his wish list. The company is evaluating collaboration options for its Southern California design team. Today, designers, suppliers, and manufacturers communicate by E-mail, fax, and phone. But in the next three to six months, Relich will review tools from Freeborders, Next Generation Computing Inc., and others.
Relich's wish list is very detailed: a common database for garment designs and materials, which suppliers could access to eliminate errors from rekeying information from E-mail or fax; a workflow engine with deadlines and business processes; reports tracking products in production; and design and manufacturing data that ties into the Guess ERP platform and its warehouse-management system from Manhattan Associates.
"The management at Guess is very committed to technology and believes it's a competitive advantage, not only to reduce expenses but [to] react quickly to changing styles and market demands in shortened cycles," says Relich, who worked at Gap Inc. before joining Guess in 2003. "Collaborative tools for the apparel industry are in their infancy."
One thing about the fashion industry: When a new style takes off, everyone in the business wants to try to put their own stamp on it. And now, technology is definitely in style.