Digital Supply Chain Platforms: Separating the Winners from the LosersAugust 29, 2019
Sourcing Journal published this thought leadership article by NGC’s Mark Burstein on August 27, 2019.
Today’s fashion and retail supply chains are extraordinarily complex. In the ultra-competitive world of fashion retail, companies must manage all the details of product design, sourcing, compliance, product testing and supply chain execution for thousands of SKUs simultaneously. They must also react to constantly changing demand signals, fashion trends, weather patterns, sales data, production delays and many other variables—and they must do it faster and faster.
Most retailers and brands, however, lack the necessary systems and processes to effectively manage it all. Manual systems, like email, spreadsheets and siloed data, won’t work in a world where speed and quick reaction times separate the winners from the losers. The supply chain ecosystem must move faster than it has in the past in order to react to consumer demand and provide the information companies need for rapid, accurate decision-making.
That’s why there is so much emphasis today on a cloud-based, end-to-end digital platform. The “platformization” of the fashion and retail supply chain—creating a platform that brings together all the systems, applications, processes and information in the supply chain—is essential to transforming responsiveness and speed.
Uniting disparate data and applications
A digital supply chain platform breaks down organizational silos and enables faster decision-making by bringing together planning, design, sourcing, production, logistics and replenishment into a single, connected enterprise. It provides a single platform that spans product and material creation, factory capabilities and capacity, material positioning, vendor management and onboarding, production WIP and quality control and finished good distribution, among other things.
Data from PLM, supply chain management, ERP, quality and vendor management applications is available for all internal departments, as well as vendors, suppliers, factories and third parties, through the digitally connected platform—and all of that information is shown in real-time. This saves brands and retailers hours of consolidating data for analysis. Consider the impact of a connected digital platform in several key areas of the modern supply chain: vendor compliance and quality management.
Effective vendor compliance
Vendor compliance is a key area that highlights the need for a connected digital platform.
The process is complex and multifaceted, as it involves managing multiple product lines, SKUs and vendors. It’s impossible to effectively manage vendors, especially amid the constant changes of today’s trade wars, without incorporating vendor compliance into a single enterprise platform that includes workflow calendars, collaboration and alerting. With a digital supply chain, vendor compliance is no longer a standalone part of your workflow, and the digital supply chain ensures a seamless, real-time flow of information.
This greatly streamlines vendor onboarding and ongoing management, since all necessary documentation—standards of vendor engagement, compliance documents, certifications, audit results—reside in a central location that’s instantly accessible. Retailers receive alerts when new audits and certifications are set to expire. Geolocation features add an extra layer of visibility, mapping factory sites by physical location to improve the efficiency of onsite inspections.
By incorporating vendor management into the overall supply chain workflow, companies can also lay the foundation for other critical applications, like social responsibility, ethical sourcing, sustainability and traceability.