Meanwhile, PayPal acquires mobile payments firm Paydient.
How Wilsons Leather pulls together far-flung sourcing and manufacturing with web processes.
Getting its own line of leather goods and apparel from tanneries in Europe to factories in Asia to its 909 stores in the U.S. is a complicated process for Wilsons The Leather Experts Inc. With 12 zone offices in Southeast Asia handling the factories that produce its goods, the Minneapolis-based company, like other retailers that manufacture their own products, has a huge job in keeping track of what the factories are making, what obstacles have arisen in the manufacturing process and how those obstacles will affect the shipping date for goods.
Take one example of the volume of information that goes back and forth: Communicating orders and specs from Minneapolis to Wilsons’ Hong Kong operation, which is the main liaison office with the Southeast Asian offices. “We had to double and triple handle purchase orders and specifications, which meant e-mails and phone calls going to our main office in Hong Kong,” says Bill Zajack, project manager of Wilsons’ sourcing system. “The Hong Kong office would in turn re-input that information and pass it on to the factories. Any changes also had to go through that process.”
Other parts of the manufacturing process were similarly cumbersome. Wilsons had taken a stab at streamlining seven years ago when it moved from a mainframe environment to a client-server network. “We decided to move to client-server systems to be nimble and to be able to scale,” says Jeff Orton, CIO and vice president of logistics at Wilsons. “At the same time we had developed our own system to handle overseas operations. But it became difficult to run with a client server system.”
That difficulty forced Wilsons executives to look elsewhere. And where they focused was on the Internet, which they believed could play a role in smoothing out communications and operations. And so they turned to New Generation Computing Inc. for its e-SPS sourcing software that promised to cut the time and expense out of the normal process of organizing factory sourcing, production and delivery in various locations around the globe.
The sourcing software tracks orders, distributes product specifications and reports real-time updates throughout the production process. It allows all parties involved in creating and manufacturing products to have real-time access to one document that keeps track of the process, which can be from five to 25 steps just in pre-production, via the Internet. The web-based program saved significant time just in the one small piece of communicating orders and specs from headquarters to Hong Kong. “Cutting that process out saves 28 hours per week,” Zajack reports.
And there are benefits at the back end as well. Unlike the current process which often does not reveal problems or mistakes until someone realizes the end delivery date will be affected, the system highlights problems so everyone knows what is causing the delays and who is responsible. And it standardizes the way in which various managers respond to problems and how they alert the next links in the chain to situations that could delay manufacturing.
A big deal
For example, a lab dip to determine a fabric’s color that does not match the required sample holds up dying the fabric until the lab dip is corrected and approved. In the past, communicating the results of the lab dip and the steps to correct it would have taken mail, faxes, e-mails and telephone calls. But now, everyone in the process can know there’s a problem right away and take steps more quickly to correct it. “Not getting something on time kills the retailer’s profit,” says Fred Isenberg, vice president of sales at New Generation Computing. “Having end-to-end visibility from pre-production through delivery allows a manufacturer to anticipate and be prepared for delays, rather than being forced only to react to the problem.”
“This product is changing the way we look at doing things,” Orton says. “It’s a big deal in the context of how business systems work.” Wilsons tested the software in the fall and started rolling out to the second of 12 zone offices in Southeast Asia this spring. “It’s cool how well the medium works,” Orton says.
E-SPS runs on a web browser that does all the work individuals used to do manually via phone, fax and mail. Instead of having to re-type product specifications and progress reports into Excel files or from the mainframe system in Minneapolis to the office in Hong Kong, all they have to do to check up on an order is log onto the online system. “The way the screens are laid out is intuitive and repetitive in nature and every screen looks the same,” Isenberg says. “Once you learn one task on the system you can do any other task because it follows the same intuitive pattern.”
But this not only makes getting information easier, it also makes setting up new factory locations and training local managers easier. Sourcing executives can train employees over the phone, walking employees through the web-based system instead of having to travel overseas to the factory, Isenberg says. Cutting out travel and communications expenses, while not yet tallied up by Wilsons, clearly saves money and frees up management from what Wilsons calls “non value-added work.”
A further benefit that Wilsons sees is that suppliers have an easier time connecting to the Wilsons system, which in turn will allow them to reduce their costs and make it easier to do business with them. “With this system there is virtually no cost to our vendors,” says Steve Waller, Wilsons vice president of sourcing. “All the vendors need is a browser and they’re up in five minutes. Our vendors are happy because other retailers use homegrown systems and require them to do it their way.”
Wilsons plans to make the workflow process even easier by providing access via cell phone, PDA or wireless laptop, a move that should save the company money on providing hardware for its traveling employees and those that work locally in foreign markets. Quality control managers, for instance, who travel from factory to factory to approve goods before final production and shipment also need to manage a huge flow of information that would previously be tracked manually on spreadsheets and faxed or e-mailed back and forth from the main office.