Poor old Humpty Dumpty. He had, you will remember, an unfortunate encounter with a wall. But aficionados of Lewis Carroll’s Through The Looking Glass will also remember him for his favoured way of using words. When Humpty Dumpty used a word, it meant just what he chose it to mean. Neither more nor less.
Today, the Humpty Dumpty syndrome is all around us. Take the word “integration” for example. It’s hardly a word which is new to the world of IT. In fact, it’s a word that has been around so long that it seems to have taken on a kind of chameleon-like character, assuming a new meaning every time it is used.
So what - really - is an integrated system? And, more usefully, what benefits can it deliver in a supply chain context? How does a truly integrated system compare with - for the want of a better term - a pseudo-integrated system? To answer these questions, we will turn to an actual example; a company which, to address a strategic business issue for which the supply chain is critical, has turned to an integrated solution. The company is Liberty, the UK design-led retailer and wholesaler. And the solution is supplied by Prologic. But more of this later.
Established by Buckinghamshire-born Arthur Lasenby Liberty in 1875, then selling ornaments, fabrics and objets d’art from Japan and the Far East, Liberty is, today, at the cutting edge of fashion. Now focusing on four principal categories - ladies fashion, accessories, gifts and homeware - the company’s retail operation is focused on its famous store in London’s Regent St., though it also has satellite stores in Windsor, and at Heathrow Terminals 3 and 4.
Liberty’s retail business sells products which are produced by the company itself, as well as products which are sourced from other manufacturers – the majority of which are imported from the Fast East. But there’s more to Liberty than retailing; the company also operates a very successful fabric wholesale business, too. In other words, as well as running a large retail business, Liberty also has to manage a wholesaling and a production operation. In short, its supply chain is a complex one.
In fact, by the end of 2000, it was a supply chain which was becoming too complex. At least, too complex for its existing IT solution. Actually, this wasn’t so much a solution, as many solutions, each dedicated to a different area of the business, such as merchandising, production, finance, distribution, retail and wholesale. And not only were each of these systems beginning to get long in the tooth, but none would easily interface with the others. The result was that it was difficult, if not impossible, to get an accurate snapshot of the entire business at any given time. Further, this lack of ability to share data between systems had led to a less than optimum visibility of the supply chain, in turn resulting in a variety of planning and control issues at an operational level.
Clearly, they were issues which needed to be resolved. But how? It was a question which was given a high priority flag by the new management team of Liberty, which had been acquired by the MWB (Marleybone Warwick Balfour) Group in June 2000. And to arrive at an answer, the company worked closely with management consultant, KPMG, carrying out a full analysis of business and system strategy. The result was that Liberty would embark on a large-scale programme of business development, focused around the integration of all aspects of its operation. This meant that both arms of the business - retail and wholesale - would work from a common IT platform, and all divisional systems, from production planning, through distribution to retail EPoS would seamlessly share data. The aim was, in the words of Liberty’s Commercial Director, Malcolm Newbery, “a single view of a single business”.
In principle, perhaps, it sounds simple enough. In practice, though, not so simple. Because, to achieve the aim, the company needed to source a system which could deliver extremely close integration of a wide range of functions. Which, of course, is where we return to the Humpty Dumpty syndrome. What do we mean by “close integration”? After all, many vendors make the claim. But many such “integrated” systems actually consist of separate packages, from different sources, patched together to make the whole. Although such systems can be individually powerful, there is no escaping the fact that their component parts are not designed, at a fundamental level, to work together. At some point, this is likely to become a limiting issue. A truly integrated system, on the other hand, is one in which the components are from a single source; based on the same data structures, sharing the same programs. These are relatively rare animals - especially in the Fashion and Lifestyle sector.
In the absence, however, of a universally agreed definition of “truly integrated”, Liberty turned to a practical approach. The company would evaluate the various options in terms of functionality. The proof, in other words, would be in the pudding. The result of this process was a shortlist of three - NSB (the incumbent supplier), JDA, and - the only sector specialist of the trio - Prologic.
“There’s no doubt that all three candidate systems had much to offer,” reflected Malcolm Newbery, “but it was clear that Prologic’s CIMS solution was the most appropriate for our needs. Essentially, this was due to the fact that the system consists of modules which are designed for each other, providing a level of integration we found lacking in other approaches. Not only would CIMS allow us to manage our retail and wholesale businesses from a single IT platform, but it would give us the level of data sharing we needed for production planning and total visibility of the supply chain.”
This visibility will deliver many advantages to Liberty. Take stock pre-allocation and planning, for example. Previously, with disparate systems, stock booking was based on a manual process, resulting in stock not being visible to merchandisers until the information was entered into their own system via a batch system. This meant an inability to plan effectively, and the possibility of lost stock and delays - up to a week, in Liberty’s case - in getting stock to the shop floor. Now, though, all pertinent systems are updated in real time, so planners know the stock situation at all times. When stock arrives in the warehouse, allocations are managed by CIMS.
Lack of visibility of stock can lead to other problems, too, such as overselling. If systems are out of sync. because of manual updating processes, for example, it is possible to sell stock which has already been sold. To avoid this, it is important to know the free-to-sell position on a real-time basis. Under Liberty’s previous arrangement, overselling had been identified as an issue. Now however, it is a thing of the past.
But the attractions of CIMS were not limited to visibility of the supply chain. It was also important to Liberty that the company could interact with it, in real time. In fact, Liberty wanted to go further: to let - in effect - the customer interact with it. Malcolm Newbery explains: “Our ability to supply custom-designed products, often involving other-label fabrics, is well-known,” he said, “and it is important to us that we build on this reputation. To do this, we need to make it easy for customers to specify their choice, and to place an order. Previously, this had been done manually, at the Point of Sale. This was slow, often inconvenient, and prone to error. We wanted to improve the process.”
The solution the company determined upon was a PC-based Point-of-Service. This concept allows the customer to make their selections via a PC, on the shopfloor away from the PoS, in an un-pressured environment. When they are happy with their selections, and the details confirmed by the system, they are entered directly into the production process at the point of order. From this moment, everything is automatic, and all relevant Liberty personnel can monitor status via the critical path. This is possible because CIMS Point-of-Service is simply an extension of the main application.
Manufacturing planning and control is, in fact, extremely important to Liberty, as it has a significant volume of own-brand sales. And, as a system which, fundamentally, is built around business planning, CIMS is ideal for managing the production planning process. But the system does not dictate the production process. Instead, it presents information, and advises on actions to take. For example, it will suggest a critical path based on supplier/factory lead times and requested customer delivery date.
Of course, planning and control is an essential part of the management process. But reporting and analysis is important, too. For this, Liberty is making use of the advanced On-Line Analytical Processing (OLAP) facilities supplied as part of CIMS. OLAP is increasingly used by companies as a powerful analytical tool, providing the benefits of real-time reporting using 3-D visuals, rather than flat reports. But, while OLAP is not particularly new as a concept, the fact that Prologic is focused on a specific market sector means that it can make it significantly easier for companies to make use of it. This is because, to implement OLAP, a company will normally commission a third-party specialist to build “cubes”, so-called because they consist of multiple dimensions of data used to analyse a business. Each cube allows analysis in a different way, and if you need more cubes, you need to commission them specifically. This can be expensive and time consuming.
Not so with Prologic. Because the company supplies exclusively to the Fashion and Lifestyle sector, it is producing new dimensions, suitable for use in this arena, all the time. This means Liberty can build any data cube at any given time, offering very high flexibility in the way the business – and particularly the supply chain – can be monitored and analysed. It is possible, for example, to ask the system to identify bottlenecks by showing suppliers which are consistently late, or it can set up “traffic lights” to flag always late, sometimes late etc. Or, if you have a question, the cube can give you an answer. For example, show me the ten worst product suppliers in terms of customer returns by value, then rank them in terms of lost margin.
Running on an Oracle platform, CIMS uses the very latest database management technology at its core. CIMS can be accessed from a PC on the local network, or from anywhere via a standard web browser. Together with the Prologic application itself, this is a powerful combination. And it needs to be. Because Liberty has up to a thousand users which will require access to the system, all contributing to a process which is designed to keep the company where it has been for the past 126 years. At the leading edge of fashion.