LEVERAGING THE POWER OF PLM IN THE COLLABORATION AGE

© 2012 Dassault SystèmesLeveraging the Power of PLM in the Collaboration Age

Contents

3 Introduction PLM Baseline Industry Shifts

4 Getting More From Your PLM System Cost Leverage Labor Leverage Visibility Leverage

7 Overcoming Common Concerns Will Suppliers Be On Board? What’s In It for Design and Development? Will Sourcing Really Get Early Visibility?

8 Simplify and Accelerate

9 Start With the End In Mind

© 2012 Dassault Systèmes Leveraging the Power of PLM in the Collaboration Age3

IntroductionThe fashion industry continues to face enormous challenges in today’s economic climate. Just as fashion brands and vertical retailers have finally managed to get inventories back in line with reduced consumer demand, they are being hit with increased supply chain costs in the form of higher prices on raw materials, labor and transportation. At the same time, increasingly savvy consumers expect more fashion newness, technical innovation and better prices each year.

With supply chains stretched farther than ever before, how do fashion brands and vertical retailers leverage every tool to support their global sourcing strategies and maximize raw material opportunities? Increasingly, winning brands and retailers are leveraging the power of PLM beyond ‘single version of the truth’ to identify material, component and supplier opportunities. They are comparing not just cost options between multiple sources but comparing the value of cost vs speed. They are also leveraging inputs from their global supply base, where the best source of ideas on new technical materials and design concepts often comes from the finished goods and raw materials suppliers themselves.

PLM BaselinePLM solutions were originally adopted to create a centralized data repository providing internal design and development teams with a ‘single version of the truth’. Design could upload an initial product brief, to be further elaborated by product development and technical design teams with fit, construction and other details for commercialization. But the process was still largely sequential, with merchants reviewing printed line plans and physical samples. While supplier communications on sample development and fit were iterated through email and static PDF documents. Early PLM systems were deployed as tactical, not strategic, solutions.

Executive SummaryThere is a general consensus that PLM (Product Lifecycle Management) is the ideal ‘single version of the truth’ for product definition data – the images, colors, components and measurement specifications that define the ‘product blueprint’ for sampling and, eventually, production. But what if you could do more with this data? Do more with what you already have?

Today, PLM has progressed well beyond ‘single version of the truth’. Winning fashion brands and vertical retailers are extending the value of their PLM data by taking advantage of the extended supply chain. They are involving sourcing teams and strategic suppliers earlier in the design process to ensure samples that meet merchant and design intent, and can be commercially reproduced at the right costs, and in the right volumes and timelines. And their sourcing teams are able to use this information to identify potential opportunities for materials and supplier leverage earlier as well, for maximum negotiating power.

© 2012 Dassault SystèmesLeveraging the Power of PLM in the Collaboration Age 4

Getting More From Your PLM SystemWith increased pressures on speed-to-market and speed-to-innovation driving product timelines down and product complexity up, fashion brands and vertical retailers can no longer maintain a competitive advantage in a serial world. Winning retailers and brands are those who are leveraging their PLM systems and processes to align internal and external teams around massively parallel communications, and who are leveraging their total global supply chains as sources of design ideas and ‘design-for-cost’ options.

It’s also possible to significantly improve concept-to-market cycle times by involving sourcing teams and strategic suppliers early in the process for time savings as well as cost savings. When multiple teams collaborate early in the design and development process, they can contribute to the evolving spec in parallel and from multiple perspectives. Teams can iterate and refine components and style features to meet merchant and design intent, as well as to hit target costs, much earlier in the design calendar rather than waiting until final hand-offs to identify cost or component constraints, adding weeks to the process to find alternate sources, materials or trims.

Suppliers can offer material, trim, construction and even style options to meet merchant and design intent. Sourcing teams can take advantage of early visibility to initial and evolving assortments to determine if they need to multi-source based on volume, speed or complexity; or even identify if they need to develop new sources of supply. And Technical design teams can balance workloads to improve speed and throughput by gaining visibility to sample requests in the pipeline.

Gradually, integrations to merchandise planning systems and ERP systems were added to manage more data through the product lifecycle, but processes were still too-often managed in a sequential flow, and within a company’s ‘four walls.’

Industry ShiftsIn the economic crisis of 2008 ~ 2009, many fashion brands and vertical retailers found themselves having to dramatically adjust inventory levels. Heavy markdowns moved goods out of the stores, albeit slowly as consumers worried about further job cuts or waited for further discounts. But in order to impact goods already in the pipeline, fashion companies needed to work directly with their factories and component suppliers. And while the fashion industry has a reputation for sometimes walking away from ‘soft’ commitments, smart brands and retailers have always found long-term benefit in working collaboratively with their suppliers.

As the strongest brands, retailers and suppliers worked together to realign material and goods flow, suppliers were often the ones proposing ideas, good ideas, for style options to use up materials in the pipeline which could not be made to ‘go away’. Even as inventories began to realign, suppliers continued to provide a source of new design ideas as a way of gaining more business. And smart retailers and brands found benefit in continuing to leverage all sources of ideas as a cost effective, and time effective, way of creating their product assortments. It’s an opportunity to increase your innovation pipeline without adding direct headcount or bottom line cost.

© 2012 Dassault Systèmes Leveraging the Power of PLM in the Collaboration Age5

This collaborative approach yields a more satisfying result for design, development and sourcing teams, with less time spent chasing information and more time focused on product.

Providing suppliers with direct access to fast-changing product specs also means samples that are closer to ‘right-first-time’ for esthetics, fit and finish as well as cost, often saving weeks out of the total cycle time by not having to endlessly iterate through samples. “Any user in the world can go into the PLM and see the current version of a style” according to Mike Relich, CIO of mega-brand and retailer, Guess. “No matter how many changes are made, you can’t end up manufacturing the wrong thing.1“

Cost LeverageIn addition to speed and efficiency benefits from earlier and greater collaboration, PLM data can provide opportunities for cost negotiation leverage across materials and suppliers.

Taking advantage of ‘where used’ capabilities in PLM systems, it’s possible for authorized materials managers and sourcing managers to analyze data across multiple brands and genders, as well as multiple seasons, to see total potential requirements for a given material that might not otherwise be visible and be able to negotiate for greater cost savings. There may also be virtually identical materials which can be consolidated for additional leverage or further differentiated based on brand and business strategy. Even where unique materials are involved, knowing total volumes for a particular mill, component supplier or factory provides a much stronger basis for cost negotiations.

© 2012 Dassault SystèmesLeveraging the Power of PLM in the Collaboration Age 6

Visibility LeverageFinally, ensure that product samples and production are executed against the latest versions of product specs by providing direct access to your PLM system to the broadest logical internal and external teams. Allow trusted suppliers to work directly in the system, while others should at least be able to access, view, and print. They may also participate in discussion threads, and/or online markup to ensure everyone is clear on sample iterations and evolving approvals. As trust and skill improve, arms-length suppliers can progress from shared visibility to shared collaboration so that all teams are working towards the common goals of developing high-quality products at the lowest logical cost and optimal speed to market.

Centralized materials and component libraries also allow testing to be performed once and used across multiple styles and product categories, saving both cost and time, while ensuring a consistent quality experience for the end consumer.

Labor LeverageWinning fashion brands and vertical retailers have also found there is benefit from migrating work to the source – whether internal teams or suppliers – minimizing re-keying, reducing the potential for error, and increasing associate satisfaction by unlocking more time to focus on product and not paper. In this way, PLM as a ‘single version of the truth’ is even more effective --it becomes not just something centrally available for viewing, but centrally available to be populated and managed.

Figure 1. PLM Phase wise Cost BreakupSource: AMR Research 2003

© 2012 Dassault Systèmes Leveraging the Power of PLM in the Collaboration Age7

What’s In It for Design and Development?Design teams are often hesitant to involve their sourcing partners in costing product and finalizing components and suppliers until they have an ‘approved’ product sample in hand. But engaging sourcing, and even strategic suppliers earlier in the process, ensures that the product samples will be closer to the merchant vision and design intent and can eliminate many last minute substitutions to achieve a commercial cost or to make a critical delivery date. Design thus actually gains control by engaging their partners earlier in the process. The PLM system can produce cost estimates without all style attributes having been entered, allowing designers to gauge costs at an earlier point in the design; if the costing exercise shows that a style is too expensive, it can be dropped without much wasted effort. Costing in PLM also makes it easy for designers to play with multiple versions of a style and decide which ones to keep based on cost estimates, Relich says.4

Overcoming Common Concerns

Will Suppliers Be On Board?Suppliers are usually well-motivated to accept a shift in workload, providing direct data entry on materials, samples, cost quotations, and iterations in exchange for increased participation in the collaborative process. “Innovation, full product development and design support, together with rapid prototyping, is critical and differentiates good suppliers,”2 according to Mark D’Sa, Senior Director, Sourcing and Production at Gap Inc.

Winning suppliers are those who know that working in close partnership with their fashion brand and vertical retail customers provides benefits for both sides in speed and efficiency, and strengthens the long term business relationship. “The most reliable vendors have seen their orders increased and have been treated more like partners,” says Relich, Guess CIO3. After a successful pilot project, vendors are now being trained to enter fabric, trim and costing information.

Obviously, it’s easier to do business with someone who works closely with you to understand design intent, offer options, and ensure clear communications for ‘right-first-time’ samples. And there is relevant value in a strategic partner who can assist with ‘design-for-cost’ by offering material and component options early in the process, not just substitutions at the final costing stages. Rather than resisting change, supply chain partners are often eager to provide material and component information so that seasonal libraries represent their offerings accurately and robustly.

© 2012 Dassault SystèmesLeveraging the Power of PLM in the Collaboration Age 8

Simplify and AccelerateTechnology vendors such as Dassault Systèmes have responded to the fashion industry’s needs for a ‘single version of the truth’ in design and development. But in addition to their industry-specific ENOVIA® Apparel Accelerator™ for Design and Development for retail, footwear and apparel companies, Dassault Systèmes extends the benefits of PLM to the broader global collaboration network with dedicated solutions allowing sourcing and production stakeholders to collaborate and contribute via the ENOVIA® Apparel Accelerator™ for Sourcing and Production, and the ENOVIA® Apparel Accelerator™ for Sourcing and Production Partners.

Quoting from a Women’s Wear Daily article of March 23, 2010 Susan Olivier, director of industry market development for retail, footwear and apparel at Dassault Systèmes, noted product life cycle management tools also can help foster a collaborative platform technology that can cut costs and speed up lead times.

“You’re looking at different ways of connecting people globally and getting faster time to market and better product innovations,” said Olivier5.

Ultimately, you can simplify the communication flow by involving all relevant teams upfront and accelerate the process of getting from idea to approval, and ultimately from concept to shelf. Rather than iterating sequentially through samples that don’t meet merchant and design intent or can’t meet commercial hurdles, sourcing teams and suppliers can contribute options before samples are made, removing weeks from the cycle.

“ENOVIA V6 has definitely made us more efficient. We wouldn’t be where we are today if it weren’t for [Dassault Systèmes] ENOVIAE V6. We consider it essential to our business.” says Johnny Claus, General Manager for Product Creation, Haglöfs6.

See http://www.3ds.com/fashion for more information.

Will Sourcing Really Get Early Visibility?Sourcing teams often struggle to obtain costs on too many throw-away styles. Getting the right people involved early in the product development lifecycle significantly reduces wasted work on samples and style details that can’t be produced cost-effectively or in the right volumes or timelines. Everyone spends less time on revisions. If design and development teams incorporate their sourcing partners in a more-collaborative ‘design-for-cost’ process, they gain the benefit of sourcing’s ability to offer logical material and sourcing options before merchants solidify expectations that cannot be met. Similarly, sourcing can use the early visibility to work closely with their strategic suppliers to obtain cost and delivery information to support informed choices.

And, as mentioned earlier, sourcing will also be able to identify, and leverage, consolidation opportunities in key raw materials and supplier volumes much earlier in the cycle when they have the biggest potential to negotiate cost savings. As well, they can highlight differentiation opportunities in a tiered or multi-brand product strategy.

© 2012 Dassault Systèmes Leveraging the Power of PLM in the Collaboration Age9

Start With the End In MindFor fashion brands and vertical retailers just embarking on a PLM journey, it’s logical to plan this in phases. A common approach is to solidify internal processes and roles, building the central version of the truth, and slowly sharing it outwards from design and development to the rest of the organization. But by understanding the rapid layering of benefits that comes from an expanded approach, you can design your implementation with the end goal in mind of taking full advantage of all internal and external partners—and set expectations that this is where you will get to before the project is ‘done’.

For those fashion companies already deployed with PLM, now is the time to make the most of the data you already have and leverage the power of your extended supply chain. Boost competitiveness by simplifying communication, accelerate time to value through ‘right-first-time’ samples that are designed to meet and exceed your commercial hurdles. Now is the time to truly Leverage the Power of PLM in the Collaboration Age.

ENDNOTES:

1. “Guess Gets IT Right” by Masha Zager, Contributing Writer Apparel Magazine August 2010

2. “Global Sourcing Perspectives: things to consider” by Niki Tait Just-Style PLM Hub June 4, 2010

3. “Guess Gets IT Right” by Masha Zager, Contributing Writer Apparel Magazine August 2010

4. “Guess Gets IT Right” by Masha Zager, Contributing Writer Apparel Magazine August 2010

5. “Suppliers Count on Service, Sustainability” by Evan Clark and Ross Tucker. WWD March 23, 2010

6. “Fast-growing Haglöfs maintains quality with ENOVIA V6” by Dora Laine. Contact mag Autumn 2010

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Dassault Systèmes, the 3D Experience Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes’ collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 150,000 customers of all sizes in all industries in more than 80 countries. For more information, visit www.3ds.com.

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