ERP Manufacturing

Apparel ERP: Enabling the move from Manufacturing to Sourcing

Time was outsourcing meant subcontracting buttonholes to a buddy down in the garment district. Today, successful brands in the apparel industry have moved away from their manufacturing roots altogether, focusing internal resources on the high value-add of design and customer responsiveness. Apparel ERP systems have really enabled this transition, harnessing the power of Information Technology to manage far-flung and often fast-shifting global supply chains. Apparel ERP systems also provide insights into suppler performance that can have a dramatic impact on your sourcing strategy.

Conventional wisdom says sourcing means finding the lowest cost source and that the search for higher margins and competitive advantage is an unending one. The tendency, then, is to chase from region to region to region, say from China to India to the Caribbean, looking for a few extra percentage points here or there.

Experience, on the other hand, has shown that developing longer-term strategic relationships with strategic sources may, in the long run, be more profitable than moving opportunistically, one competitive bid at a time. There are two reasons for this: The accumulating efficiencies of Apparel ERP-based relationships and the hidden costs of quality aberrations.

For all the technology involved, Apparel ERP systems are fundamentally about relationships and communication. Over a period of three, five, even seven years, efficiencies, understanding and trust established with a stable supplier base in a single region brings costs down.  Quality soars, of both physical product and the intangibles of the working relationship. Apparel ERP provides the metrics to spot areas for improvement, and the tools to achieve those improvements.

Quality control, ultimately, tips the balance in favor of the longer-term approach over the more opportunistic. Opportunistic companies always choose the lowest cost. Strategic competitors, however, use Apparel ERP to drive down costs over time through improved relationships. And that promotes higher and higher quality at lower and lower costs.

Chasing the lowest cost supplier requires significant and ongoing investments—of both time and money—in QA. A tremendous amount of tome can be spent on quality-related follow-up. Without endless diligence, some significant percentage of goods received are going to be unsellable, because of poor quality or workmanship, short or inaccurate or untimely shipments or even mislabeling. One not quite hidden downside is your brand suffers. Once you factor the true cost of poor quality, the cheap source is not always as cheap as you may expect.

Written by :

Amy Cruz