If the back office is the new black, then collaborative sourcing with your vendors may be the new key to staving off retail failure.
Whereas suppliers may have been those arms-length partners who did as directed in years passed, today, many are leading innovation and educating brands and retailers about the best options for their product.
“It’s really a two-way relationship now,” Ann Inc.’s SVP of global sourcing Philippa Abeles said last week at the American Apparel & Footwear Association’s Sourcing Conference in Washington, D.C. “What we get from the suppliers, whether it’s design innovation, whether it’s construction changes to drive down costs, is invaluable.”
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The reason this buyer-vendor relationship has evolved to what it is today, is because the new supply chain demands it—speed to market and agility can’t be delivered without partners working toward the same goal.
“Gone are the days where we could pay the extra whatever or take a little more time,” Abeles explained.
Suppliers have become the eyes and ears and tools for brands and retailers relying on their insight to make faster, more informed decisions in their supply chains and deliver product that actually strikes a chord with consumers right when they’re ready to buy it.
“Suppliers today have it together more than we do in New York,” Abeles said, noting that sometimes the best ideas the brand gets comes from their innovative suppliers. “They’ve been forced to think differently.”
For Ann Inc., as with many other major brands and retailers today, reducing speed to market has been a key focus in recent years. To start cutting chunks out of the timeline, Abeles said the company honed in on reducing what was in its control—the development cycle.
“We’ve reduced our development cycle by eight weeks in the last two years,” she said, adding that emphasizing raw materials sourcing closer to garment manufacturing helped the company get there. Ann Inc. had been buying much of its fabric in Turkey and waiting 45 days to get it to where it was manufacturing at the time, so instead, they built up production capabilities in Jordan, where they could have fabric delivered from Turkey within a week. “Now our garment production lead time is max 120 days at the longest, and we’re chasing production in three weeks.”
For Timberland, this move toward more local manufacturing, and tapping suppliers for their insight has helped the company better understand where to go with its product.
“We’re leveraging analytics to help predict our demand, to reach out to where our retailers are…to help us understand trends and different product mixes,” said Bert Spiller, VP of product creation for Timberland PRO, the footwear brand’s workwear arm.
When BASF Corporation, sustainable chemistry creator and one of Timberland’s suppliers, brought the brand “this popcorn-looking foam,” according to Spiller, it was so novel the company couldn’t figure out how best to use it, and instead passed on incorporating it.
The forgoing ended up proving beneficial to Adidas, which later tapped into the technology.
But, as Spiller stressed, the fact that BASF brought the innovation to their table in the first place proves there’s innovation there.
“We look for suppliers that have this innovation, this think tank pipeline in their own operation,” Spiller said. “We can’t always be thinking of the next best thing.”
