Sharing Competitive Secrets
“Retailers and suppliers are in a tug of war,” asserted Bill McBeath, co-founder and chief research officer of ChainLink Research, Cambridge, Mass., when he opened the Supply Chain Summit session, “Supply Chain Orchestrator.”
McBeath’s suggestion was to replace the traditional approach of a retailer selecting a supplier that in turn selects its supplier, with a supply chain orchestrator that would manage and oversee the entire product life cycle.
After posing the rhetorical question: “When should you trust your trading partners and when should you withhold information?” he promptly answered, “Never, and never.”
Joining McBeath in the presentation was Ellen Martin, VP, supply chain information systems, for branded-apparel supplier and retailer VF Corp.
“If you share knowledge with a trading partner you may be giving away a competitive advantage to the next company that goes to them,” Martin said. “But we had to take that risk. Every partner in the supply chain has to make money, and we couldn’t do to our suppliers what we wouldn’t do to our own plants.”
VF Corp., which had 2006 revenues of more than $6 billion and is based in Greensboro, N.C., operates more than 850 retail stores, manages roughly 1 million SKUs every year and currently has active partnerships with 1,578 factories throughout the world.
Martin cited strategies that have helped VF to better orchestrate its global supply chain, including establishing creative partnerships, getting closer to the source and achieving the right mix of off-shore vs. near-shore suppliers.
VF now has 800 employees in Hong Kong and has recently opened its first prototype showroom in China. “Our designers can spend a week in this showroom making adjustments, and we’ve been able to reduce the lead time for prototyping from 70 days to 22 days,” she reported. “That makes a huge competitive difference.”
The company also owns plants in Mexico, which provide the near-shore presence necessary for faster replenishment.
Sears Holdings ceo unhappy with 2Q
HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $176 million, or $1.17 per diluted share, for the second quarter ended Aug. 4, compared with net income of $294 million, or $1.88 per diluted share, for the second quarter ended July 29, 2006. The company attributed the decline in its second quarter results from the same quarter last year to lower operating results at both Sears Domestic and Kmart, which were partially offset by improved operating results at Sears Canada.
“We are disappointed with our second quarter results. Our gross margins came under pressure from sales declines and increased promotional activity, and as a result, our net income was significantly below last year and our expectations,” said Aylwin Lewis, Sears Holdings’ ceo and president.
Sears Domestic’s comparable-store sales declined 4.3% for the quarter, while Kmart’s comparable-store sales declined 3.8%. Total domestic comparable-store sales declined 4.1%. The company reported lower sales across most merchandise categories at both Kmart and Sears Domestic, partially offset by increased sales of women’s apparel at both Kmart and Sears Domestic, as well as within consumer electronics and footwear at Sears Domestic. For the quarter, total revenues declined $0.6 billion to $12.2 billion in fiscal 2007, as compared to $12.8 billion for the second quarter of fiscal 2006.
Lane Bryant pres. joins Christopher & Banks
MINNEAPOLIS Former Lane Bryant president Lorna Nagler will join Christopher & Banks as president and ceo effective Aug. 31. She will replace Matthew Dillon, who resigned from his position as president and ceo and as a member of the board of directors today. Nagler has also been elected as a member of Christopher & Banks’ board of directors effective Aug. 31.
Nagler most recently served as president of Lane Bryant, a division of Charming Shoppes. Before joining Charming Shoppes in April, 2002, Nagler served as a senior vp and general merchandising manager for apparel and jewelry at Kmart Corp.