Technology may be transforming nearly everything when it comes to retail, but navigating the perplexing world of PLM, ERP, SCM and other acronyms that describe enterprise software, can prove trying for comfortable companies—especially when they’re wed to outdated legacy systems.
When Aspen, Colorado-based skiwear company Sport Obermeyer realized it needed a more robust business system in place than founder Klaus Obermeyer’s handshake, it called in Greg Bannister, now the company COO, to drive the shift.
Obermeyer needed better communication with its overseas factories, better process efficiency, better cost accounting and a shorter production cycle—and the company knew improvements to the aforementioned would mean a better bottom line.
Too much and too old inventory was a problem too.
“All of our purchase orders were written on Excel spreadsheets,” Bannister said. “But when they [the orders] really came into the system, you’d find that the real numbers were very different and no one could understand why we were losing money.”
The company was using an old green-screen system and the staff, some of whom were still learning computer commands like ‘Control V,’ were comfortable with it.
So moving them over to an updated system was no simple task.
“Nothing is ever easy,” Bannister said. “If anybody ever tells you the employees are going to rally around and sing songs, they’re kidding. In some cases this company was harder than other companies because this is a family-run business and they’re very protective.
But the biggest challenge, as Bannister explained, was modernizing the company mentality.
“It was trying to change the mentality from a process-based mentality to an enterprise mentality,” he said, like getting employees to understand that entering data earlier will make someone in shipping’s life easier down the line.
Sport Obermeyer had sustained years of marginal growth or losses, but that data was never available in the previous AS400 system and no one was able to analyze the available data.
Bannister took over Obermeyer’s operations in May 2012, interviewed every employee and found that in-house departments weren’t communicating and the company wasn’t hitting its data or margin goals—things that could easily improve by putting a more productive system in place.
After examining the company’s existing systems, Bannister interviewed eight different enterprise software providers and requested live demonstrations of how the software would work. The company ultimately settled on NGC’s Global Enterprise Suite, a fully integrated suite with applications for product lifecycle management (PLM), supply chain management (SCM) and enterprise resource planning (ERP).
“The selection was based on what we need as a company,” Bannister said.
The integrated software is designed to interact with all departments, warehouses and users across the company. It lets Obermeyer engage with factories in real time so that mid-production changes can be put in place, it minimizes data re-entry and improves workflow for faster time-to-market and allows the company to run detailed reports for quick insight into its business performance.
Eleven months after Obermeyer started incorporating NGC’s system, all was implemented and the company was running efficiently and planning development for two years out.
“We did it extremely fast. Most companies go in with a two-year ERP implementation. But if you’re doing it in two years, you’re training over and over again and when you go live, everyone forgets what they were trained on,” Bannister said. “You might as well go live and then triage. It’s like throwing you in water, if you can’t swim you drown.”
So which system does what exactly?
Put simply, PLM is for building your product, Bannister explained. With it, from the concept and design phase, users are able to create a Bill of Material (BOM) and cost the product with all parties—like merchandising, design and pattern-making—looped in so that all can make information-driven decisions throughout the product’s lifecycle.
ERP is your core business system, how you create orders for your product, where the sales team can enter orders and the accounting department can manage the financial details. That all ties into your warehouse system so the warehouse knows how to receive, stock your goods and pick and pack.
“We start our line in our PLM system, we integrate that into ERP so you know what to order, and the information flows to our supply chain management system [SCM],” Bannister said. “We give them technical diagrams to build our clothing and we ask them to tell us where their work in progress is. Did they buy the fabric? Did they buy the product and ship it to us? In the old days we ran a PO and we found out five months later that they hadn’t even started it.”
Now, factories can pull the POs from the system, provide cost data for a button they sourced themselves and put in cost sheets, Bannister explained. “So it becomes a real partner oriented system where we’re asking them to put data in our system and we’re watching the production lines.”
Obermeyer has even started asking factories to print out carton labels and place them in boxes so that when the packages arrive in the warehouse, they can be put away, picked, packed and shipped quickly.
“Before it was two weeks between receiving and shipping, now we’re doing it all in the same day,” Bannister said. “Receiving goods, putting them away, pick, pack and ship is usually a four- to six-month cycle on the delivery side, we were done in three. We really cut the bulk of what we do from six months to three months.”
And speed in today’s high-demand market means better return on investment and more loyal consumers.
“When you think about getting products to the stores early and on time, it means we’re competing better. The customer can choose us over someone else. Our reorder rate has gone up about 20 percent, and that’s where our best profit is,” Bannister said. “The message is that it’s a system, it’s process improvements, it’s process change, it’s everything you have to look at in the business run more effectively and profitably.”