Being future-ready starts with being data-ready
Digitising supply chains is one way apparel and textile manufacturers can float their boat in the choppy waters of political instability, trade wars, and adverse economic conditions, says Bryan Nella, Senior Director of Content & Thought Leadership, Supply Chain, Infor. Fibre2Fashion talks to him about the next big revolution in PLM, factors impacting the digital supply chain and the latest solutions at Infor for real-time visibility with GPS tracking for air and over-the-road transport.
What would be your suggestions to apparel retailers and manufacturers to be future ready?
Being future ready means investing in ways to better serve the end-customer while reducing friction in the supply chain. When we picture the future of manufacturing we think of things like artificial intelligence, machine learning, robotics and sensors. But being future-ready starts with simply being data-ready. The data-ready enterprise operates in a digital environment where documents, processes and workflows are automated and free of paper, excel sheets and e-mail. Going a step further, the future ready supply chain extends digital functionality beyond the enterprise and reaches trading partners.
Brands and suppliers are connected on a single network that allows data and collaboration across parties, departments and regions while information resides centrally for everyone to access it live. With this in place, cutting edge technologies like artificial intelligence can be applied to improve performance of the entire supply chain to benefit brands and manufacturers, while enabling more opportunities to please the end-customer.
How would you describe the supply chain situation among textiles and garment manufacturers in Asia?
Globally, there are macroeconomic forces at play such as trade conflict, political instability and interest rate volatility that have ramifications reaching the Asian textile industry. Global trade policies between the US and China have created opportunities for manufacturers outside of China to capture business as many brands and retailers seek to move outside of China. This pattern has certainly existed for several years now, but tariffs have expedited moves outside of China or to 'China + 1' sourcing strategies. Other signs of economic and political uncertainty present risk to apparel supply chains. Upward pressures on interest rates, for example, present new challenges around capital-related risk.
At the same time, consumer expectations and demands continue to place pressure on brands and retailers. 2019 is a prime opportunity for textile and garment manufacturers in Asia to become strategic partners to their big brand customers by partnering closely to help deliver products and services built around the end-customer. In many ways this means becoming an extension of the brand, committed to on-time delivery and customer satisfaction. This starts with eliminating traditional barriers or silos that exist between a buyer and supplier. Digitising the order, invoice and settlement process, or automating packing, scanning and shipment building at the factory level to enable direct shipments, are examples of progressive moves being made to create new forms of value in the brand-supplier relationship.
Which geographical regions do your customers for fashion solutions belong to? Where is the adoption of 3D fashion design integrated PLM solutions growing?
Our customers are all over the world, in more than 70 countries. We have high density of customers in places like China, Vietnam, Bangladesh and Sri Lanka. In fact, to mirror that population, we operate customer support offices in Hong Kong, Shenzhen, Taipei, Ho Chi Min, Colombo and Bangalore. 3D adoption is growing, and our Fashion PLM solutions can work with several of the popular 3D solutions in the market today.
What will be the next big thing in ERP?
Traditional ERP was enterprise centric. The future of ERP is network centric. It is cloud based and built to manage commerce in a global ecosystem or networked environment to empower trading partners and foster a multienterprise flow of data.
What would be your top three predictions for the future of supply chain in the textiles and apparel sector?
Manufacturers/suppliers will increasingly become strategic differentiators and value-add partners to brands and retailers in three ways:
- co-innovation on new materials and products
- niche projects to tackle challenging issues such as sustainability and environmental responsibility
- a larger role in direct to consumer delivery.
What kinds of trade risks and economic challenges do brands and retailers need to be prepared for?
There's a string of risks and challenges in today's volatile trade landscape. Rocky political and economic conditions make for uncertain footing and significant room for supply chain disruption. This includes tariffs, trade laws, and interest rates mentioned above, to name a few. It's important to not get caught up in the news stories and potential crises that we're hearing about each day. One thing manufacturers can do is seek ways to be more agile, flexible and collaborative with their brand customers. Digitising documents and processes, and eliminating paper and e-mail are a couple of ways to begin down this path. For example, if PO and invoice processes are automated in a shared online environment, there is only one version of the order - and no room for discrepancies. Buyer and supplier see the order and any changes made by the other are acknowledged. Right away, this cuts down on 'back-and-forth' e-mails and phone calls and allows everyone to focus on servicing the end-customer. Typical friction between buyer and seller are removed and just as important, financial supply chain benefits can be obtained in this automated environment.
What are the latest innovations in the solutions offered by Infor?
Some of the big innovations at Infor include Control Center, a cutting-edge supply chain visibility and intelligence solution that enables supply chains to be data-driven, self-learning and consistently reliable. This is a big, visionary solution that transforms the way supply chains are managed using AI and machine learning. In the world of apparel manufacturing, one of the newer tools from Infor is Cash Flow Manager which enables manufacturers to see approved invoices across multiple customers and select invoices they would like to finance. Incoming receivables are consolidated into a single easy-to-use view. Cash Flow Manager actually helps prescribe the optimal receivable to finance based on various user parameters.
How does your network help improve visibility across the supply chain in fashion industry?
Our network is built to facilitate multienterprise visibility and orchestration. It is architected as a network to serve as a foundation or system of record for complex transactions and processes. For the fashion industry, this means that brands can have visibility into the production and delivery of goods starting at the order, all the way through work in process such as cutting, dyeing and sewing, and then into the delivery of goods from factory to the store shelf. Their suppliers or manufacturers have visibility into information that's important to their world. They see orders and amendments, they have visibility into the status of payments to know when they will be paid, and they have visibility into incoming receivables available for financing including optimal discounting options to enhance their decisions.
What kind of impact will Trump's trade wars have on the financial supply chain?
Any trade war will bring new complexities to cross-border trade. Rising costs resulting from tariffs are the main challenge. The financial supply chain can take proactive steps to engineer duty savings. For example, when order and invoice data is automated, as described above, customs filings can be streamlined and simplified. This opens opportunity for surgical customs filings.
One customer on our network was manufacturing outdoor jackets consisting of an inner-lining, outer shell and a hanger. Duty fees on the completed jacket were close to 30 per cent. When the jacket invoice was broken out into components, the duty fees on the inner lining were just 17 per cent. The hanger duty was 0. This generated significant duty savings. Often, the task of customs filing is too daunting to break items down into components and file. But when the invoice process is automated and delivers a customs ready invoice with auto-populated customs codes, this type of duty savings becomes possible. It requires automation and digitisation of the financial supply chain, but it can deliver value during times of uncertainty.
How will the fashion product lifecycle management (PLM) market look like five years from now?
AI and Machine Learning will make its way into PLM and the planning process, featuring things like recommendations to help enhance designs and round out assortments, intelligent alerting, and more process automation.
Please tell us about the recently launched cloud PLM for fashion. What digital changes does it bring to the fashion industry?
Infor Cloud PLM slashes time from concept to consumer. It enables internal and external collaboration and streamlines processes from line planning, design, and development to sourcing and production. In today's fashion world where customers expect unique assortments and options and brands are pressured to deliver new styles and looks more frequently, Cloud PLM creates new possibilities in product development and assortment. This solution is offered in an enterprise grade, multi-tenant solution that can scale from a small design company with 5 users to a large enterprise with over 1,000 users.
What will be the next big thing in PLM?
PLM solutions will leverage the massive amounts of data available to help curate more personalised assortments that are hyper localised. As consumers become comfortable sharing more data, fashion companies can then better predict what will resonate with their customers, which leads to faster sell through and higher profits.
What are Infor's plans with respect to textile and fashion industry? Any new solutions you plan to introduce this year?
We continue to expand critical visibility to shipments in transit across global supply chains. Real-time visibility with GPS tracking for air and over-the-road transport will join our existing Live Ocean tracking this year. This will have a major impact on inventory visibility and agility, including predictive intelligence and predictive ETAs to optimise inventory decisions and ensure fulfilment. (HO)
