Upstream Focus is Sourcing Journal’s series of conversations with suppliers, associations and sourcing professionals to get their insights on the state of sourcing, innovations in manufacturing and how to improve operations. In this Q&A, Guido Schlossmann, president and group CEO of sourcing and supply chain management firm Synergies Worldwide, discusses which stores are faring better during the pandemic and how sourcing needs to address omnichannel retail operations.
Name: Guido Schlossmann
Title: president and group CEO
Company: Synergies Worldwide Ltd.
What’s the number one question you get from your clients now that was never really a consideration before?
It really differs, if you listen to clients from the U.S. or Europe. Business for U.S. off-price retailers and clubs seems very positive. Our clients in this segment are asking us to manufacture and ship goods as fast as possible. For short lead times, they are prepared to pay higher prices and even considering to airship the goods into the U.S.
In Europe, it is the opposite. The majority of our clients are asking us to hold and postpone shipments. It’s a mixture of deferring volumes and styles.
Which processes have you put in place due to Covid that you’d like to see continue even after the health crisis is behind us?
Our processes are now more goal- and performance-oriented, rather than a 9 a.m. to 5 p.m. task-focused office work. This is changing the culture and mentality of our company to a more team-oriented, collaborative networking style.
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In the absence of travel opportunities, virtual meetings and digital product presentations have been introduced. We are now able to connect with our clients more often and in a very focused and strategic way. This is helpful for a better understanding of our client’s needs and is more efficient as compared to some of our interactions pre-pandemic.
How are you evaluating potential brand and retail clients differently now compared to before the pandemic?
We prefer clients with whom we can enter into strategic collaboration versus a transactional one. To establish this kind of relationship, we have to ensure there is transparency of information and develop a constructive problem-solving approach rather than falling into the panic mode. Information about the financial status or creditability is also important to evaluate the risk while discussing a potential collaboration and payment terms. The segment or distribution channel in which the clients operate has become more important as well. Off-price retailers and hypermarkets with a grocery offering have proven to be most resilient against pandemic-caused lockdowns. Well managed direct-to-consumer brands (DTC brands) and e-retailers benefited a lot from a surge in online shopping.
As the apparel industry tries to overcome its Covid overstock issues, how can supply chain partners improve inventory management?
Strategic collaboration with clients to achieve transparent communication about stock level, forecast and demand. The strategic road map is followed by an integration and alignment of all supply chain partners. Doing so, we are able to stock raw material, go into quick product replenishments and execute more styles at smaller order quantities.
What should be brands’ and retailers’ top lesson from Covid? How can they address this in their operations?
On top of the list should be supply chain resilience. An agile, multichannel, global sourcing strategy will be key to achieve this goal. Part of the multichannel sourcing strategy is to have the right global supply chain management partners, who have personnel on the ground to visit factories, ensure sample development, follow-up production, check compliance level and conduct quality inspections within short lead times.
Brands and retailers shall be looking at sales from a unified commerce perspective that considers online, offline and other channels as one large bucket and engineer its supply chain according to that ecosystem.
How are you working with your factories to support quick-turn, small run orders?
We support our factories with design and product development (PD) to come up with ready-to-produce styles for our customers. We combine these efforts with using locally produced fabrics and accessories. Fabric and prints are then often bundled across multiple styles. Due to our heterogenous client mix, we are in a position to place large and small size orders with our manufacturers, which helps to make our factories accept smaller runs as well. Last but not least, we operate a global manufacturing base to give us the most optimized sourcing options.
Which new sourcing regions are you either considering or ramping up today?
As we collaborate with our customer with very unique needs, we are engaged in most production countries in order to engineer a supply chain towards their specific needs and challenges. During this supply chain engineering process, we consider the impact of tariffs, logistical issues, price, lead time, cost of quality in changing production countries, etc. There is not one specific production country that we are ramping up, as it depends on the kind of customer and product category. For the selection of the right production country, it also matters whether our client is an importer, retailer or brand and whether [the company] operates an e-commerce, brick-and-mortar business or omnichannel business. Since Synergies works more with price-sensitive customers, we currently produce more in Bangladesh, Pakistan and India.
As you’re considering where to source, what are your top considerations today?
Key is a global mix of production countries and offices to address and solve various sourcing needs of our customer.
What keeps you up at night?
Access to flexible financing tools—trade financing and factoring—at affordable rates.
What makes you most optimistic?
What survived and exists today has become stronger, what was sick has disappeared. Very traditional business is speeding up to catch up to the digital age. Covid-19 has become a catalyst for the needed change in our industry.
What’s in store for Synergies Worldwide in 2021?
In order to provide specific and individual product and supply-chain service solutions for our clients, Synergies Worldwide has started to evolve into a group that comprises multiple companies from different supply chain verticals and/or are specialized in different parts of the supply chain. We will be leveraging this expertise to help companies transition to unified commerce by offering highly competitive, flexible, technology-driven supply chain solutions.
We are aiming for strategic collaboration with existing legacy supply chain companies and at vertical integration with our existing and potential clients. For 2021, we will continue our focus on sustainable fabrics and products.