The benefits of private label merchandise can be so large that they become crucial to retailers' strategies—to the extent that ignoring global sourcing is no longer an option for most. The issues discussed above could be particularly critical and even more complex for companies that offer their sourcing services to other independent retailers. They must also comply with those retailers' unique billing and documentation requirements as well as internal invoicing and vendor payment for goods bought on their own behalf.
Again, an astute sourcing product lifecycle management (PLM) and finance management package should be able to enumerate all the elements (line items) of an original order and, in turn, trigger the generation of other documents, such as the letter of credit (L/C), the packing list, the advance shipping notice (ASN), the bill of lading (B/L), the commercial invoice, and the service invoice. These documents—and the detailed information regarding carriers, shippers, country of origin, export country, import country, and final destination—are essential for meeting the ever more stringent global trading security standards and for clearing customs without delay. This synchronization of all participants within the supply chain would be a major performance enhancement to speed up the product-to-market time. For more information, see Globalization Has a Profound Impact on the Supply Chain and Supporting Information Technology.
A number of major, and often conflicting, objectives discussed thus far have been driving retailers to turn to IT solutions to streamline their sourcing and logistics processes. One key objective is the pursuit of lower prices, which often involves extended supply chains to remote, lower cost regions. On the other hand is the contradictory quest to shorten cycle times, which is essential, but so is having quality control that ensures companies receive their merchandise on time and according to exact specifications.
Until fairly recently, the Internet has been neither reliable nor ubiquitous enough to support such broad supply networks and resolution of these networks' issues. Lately though, the Internet has reached a much higher level of security, bandwidth, and connectivity, which coincides with emerging applications designed to run over the Internet and offer near real-time data and events for managing and analyzing the variables of global sourcing. For instance, Web-based supply chain visibility tools have reportedly helped many companies improve their production lead times, better manage their inventory movements, and track the production and delivery of products in near real time. Moreover, Web-based sourcing tools can help these organizations identify suppliers, negotiate contracts, ship manifests, streamline sourcing through event management, collaborate and plan with their trading partners, and ultimately increase their on-time deliveries.
Some importers might have both “big ticket,” expensive items along with high volumes of low-cost accessories sourced directly from Asia. Such a situation requires an integrated approach within the supply chain and more accurate visibility. Again, collaboration among suppliers, logistics providers, buyers, and product managers is critical throughout the entire product life cycle. An astute sourcing software suite should enable product managers and buyers to quickly develop comprehensive requests for quotes (RFQs) for their global sourcing efforts.
Such a solution should also be able to normalize disparate currencies, languages, and lead times, and automatically calculate the estimated landed costs for a clear understanding and comparison of all offers submitted by competing suppliers. For these suppliers, which are located around the globe, the suite should seamlessly unite and coordinate such details as product specifications, RFQs, quality control, packing lists, and all the invoices and customs paperwork, thus eliminating redundant data entry errors and speeding up production. Such a solution should also enable buyers and trading partners to more quickly collaborate on accommodating change orders in an effort to respond to any fluctuations in market conditions.
With suppliers on the other side of the globe, it can be hard to check to see how things are going, and one typically finds out about a problem after the fact—more specifically, when the goods arrive. Therefore, taking the above analysis of strategic sourcing, although some vendor relationships can be smooth and run on “automatic pilot” (meaning companies might occasionally monitor purveyors of office supplies for best prices and basic service requirements), a much deeper and more involved relationship is essential for strategic vendors—that is, retail goods suppliers that must deliver to specifications, on time, and at the right cost. These vendors can be evaluated on many key performance indicators (KPIs) in a holistic scorecard-based fashion. Some of these KPIs can be on-time delivery, quality, innovation (organization health and technology), responsiveness and customer service, security, social compliance, etc.
Again, an astute sourcing product lifecycle management (PLM) and finance management package should be able to enumerate all the elements (line items) of an original order and, in turn, trigger the generation of other documents, such as the letter of credit (L/C), the packing list, the advance shipping notice (ASN), the bill of lading (B/L), the commercial invoice, and the service invoice. These documents—and the detailed information regarding carriers, shippers, country of origin, export country, import country, and final destination—are essential for meeting the ever more stringent global trading security standards and for clearing customs without delay. This synchronization of all participants within the supply chain would be a major performance enhancement to speed up the product-to-market time. For more information, see Globalization Has a Profound Impact on the Supply Chain and Supporting Information Technology.
A number of major, and often conflicting, objectives discussed thus far have been driving retailers to turn to IT solutions to streamline their sourcing and logistics processes. One key objective is the pursuit of lower prices, which often involves extended supply chains to remote, lower cost regions. On the other hand is the contradictory quest to shorten cycle times, which is essential, but so is having quality control that ensures companies receive their merchandise on time and according to exact specifications.
Until fairly recently, the Internet has been neither reliable nor ubiquitous enough to support such broad supply networks and resolution of these networks' issues. Lately though, the Internet has reached a much higher level of security, bandwidth, and connectivity, which coincides with emerging applications designed to run over the Internet and offer near real-time data and events for managing and analyzing the variables of global sourcing. For instance, Web-based supply chain visibility tools have reportedly helped many companies improve their production lead times, better manage their inventory movements, and track the production and delivery of products in near real time. Moreover, Web-based sourcing tools can help these organizations identify suppliers, negotiate contracts, ship manifests, streamline sourcing through event management, collaborate and plan with their trading partners, and ultimately increase their on-time deliveries.
Some importers might have both “big ticket,” expensive items along with high volumes of low-cost accessories sourced directly from Asia. Such a situation requires an integrated approach within the supply chain and more accurate visibility. Again, collaboration among suppliers, logistics providers, buyers, and product managers is critical throughout the entire product life cycle. An astute sourcing software suite should enable product managers and buyers to quickly develop comprehensive requests for quotes (RFQs) for their global sourcing efforts.
Such a solution should also be able to normalize disparate currencies, languages, and lead times, and automatically calculate the estimated landed costs for a clear understanding and comparison of all offers submitted by competing suppliers. For these suppliers, which are located around the globe, the suite should seamlessly unite and coordinate such details as product specifications, RFQs, quality control, packing lists, and all the invoices and customs paperwork, thus eliminating redundant data entry errors and speeding up production. Such a solution should also enable buyers and trading partners to more quickly collaborate on accommodating change orders in an effort to respond to any fluctuations in market conditions.
With suppliers on the other side of the globe, it can be hard to check to see how things are going, and one typically finds out about a problem after the fact—more specifically, when the goods arrive. Therefore, taking the above analysis of strategic sourcing, although some vendor relationships can be smooth and run on “automatic pilot” (meaning companies might occasionally monitor purveyors of office supplies for best prices and basic service requirements), a much deeper and more involved relationship is essential for strategic vendors—that is, retail goods suppliers that must deliver to specifications, on time, and at the right cost. These vendors can be evaluated on many key performance indicators (KPIs) in a holistic scorecard-based fashion. Some of these KPIs can be on-time delivery, quality, innovation (organization health and technology), responsiveness and customer service, security, social compliance, etc.
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