A Retail Sourcing Suite Built on Experience

Eqos's valuable engagement-based experiences discussed in the previous part of this series (please see One Vendor's Quest to Garner a Global Sourcing Ecosystem) were parlayed into the 2006 launch of Eqos 3.0 and the more recent launch of Eqos 4.0 in May 2007. Eqos's Web-based applications help retailers streamline and scale their sourcing operations by allowing every member in the supply chain—whether located in Boston (US), Pretoria (South Africa), or Beijing (China)—to collaborate online and access the most up-to-date information on the sourcing process of consumer goods.

Based on best practices learned through its work with such retailers as Best Buy and Tesco, the updated Eqos product enables retailers to manage the sourcing process of goods, from initial concept and design through to product specification, bid management and assessment, landed costs estimation, packaging, sampling, testing, and final order confirmation.

Hosted by Eqos (http://www.eqos.com), the solution includes critical path management, workflow management, reporting analytics, and an alerts-and-exceptions function. Pertinent information, including product images, can be entered into a master repository, which reduces duplication and errors, and provides a single view of the supply pipeline—accessible to approved internal or external users. The solution, which also enables the monitoring of suppliers from a quality compliance and risk management perspective, has continually improved its intuitiveness. It now allows all levels of designers, technicians, and buyers, as well as supplier personnel, to easily track the sourcing process.

Another major breakthrough for Eqos came mid-2006, when Edgars Consolidated Stores Limited (Edcon), the leading retail group in South Africa for clothing, footwear, and textiles, selected the vendor's global sourcing solution to improve supplier collaboration, support the expansion of its retail supply chain, deliver the latest fashions to consumers faster, and boost bottom line profitability. The solution has since been implemented by a joint Eqos and Accenture team working closely with the Edcon merchants.

Operating in Johannesburg as Edgars Department Store since 1929, Edcon today offers ten retail brands: Edgars (offering clothing, footwear, kitchenware, household textiles, and housewares), Jet (clothing and footwear), C N A (books, stationery, and music), Red Square (cosmetics), Boardmans (housewares, household textiles, and kitchenware), Legit (young women's fashion), Jet Shoes (footwear), Temptations (intimate wear), Prato (footwear), and JetMart (general merchandise such as clothing, kitchenware, music, do-it-yourself (DIY) items, small electrical appliances, household textiles, health and beauty products, and stationery). Grouped within the Edcon department stores and discount divisions, the above brands cover multiple categories throughout the approximate 1,000 stores located across South Africa, Botswana, Namibia, Swaziland, and Lesotho.

Eqos Today

Consequently, Eqos is currently supporting some of the world's leading retailers by hosting their near 15,000 users (which include retailers, agents, suppliers, and other trading partners) in over 55 countries. Eqos is a professionally managed and growing organization of about 70 employees, and the vendor has been consistently profitable, with quarter over quarter growth. It has recently experienced physical expansion, opening offices in Boston, Massachusetts (US) in early 2006, and in Hong Kong, China in early 2007. This latest investment has signaled the company's commitment to supporting more fully customers' sourcing operations in Asia.

Eqos's global expansion comes as more retailers establish sourcing offices and strengthen relationships with agents and strategic suppliers throughout Asia. The company's Hong Kong office provides retailers and their trading partners with Mandarin, Chinese, and English language support across numerous time zones and geographical regions. Eqos supports more than 4,000 users in China alone. On a global basis, the company manages more than 5,000 transactions a day and 100,000 user logins per month, thereby supporting the management of nearly 38 billion dollars (USD) worth of inventory annually.

The most recent US customer win took place in April 2007; retailer H.E. Butt Grocery Company (H-E-B) selected Eqos's business solutions to support and expand its global sourcing and supplier management operations, as well as to enhance its private label offerings by improving supply chain collaboration and visibility. H-E-B opened its first store in 1905 in Kerrville, Texas (US), and today is one of the nation's largest independently owned retailers, serving a broad range of customers. With more than 300 stores in Texas and Mexico, the supermarket chain earns revenues in excess of 12 billion dollars (USD). Now based in San Antonio, Texas, H-E-B employs more than 60,000 partners and serves millions of customers in over 150 communities. Known as an IT innovator, the retailer claims to have consistently outpaced its competitors by offering differentiated products and services through a variety of formats.

Another trend that has played a key role in Eqos's success is that retailers are increasingly implementing private label strategies to help grow their revenues. As reported in The Promise (and Complexities) of Private Labels (and given the recurring private label theme thus far in this article), there is clearly a growing trend among retailers toward offering private (or the retailer's own) labels and brands. Consequently, a fundamental reassessment of the structure of global sourcing has occurred; companies are now reconsidering whether they need agents or other middlemen at all, since more and more, companies can now work directly with manufacturers via Internet trading exchanges. Given some reported success with lower-priced house brands, retailers in several segments, including fast-moving consumer goods (FMCG), consumer electronics, and apparel, are increasing their focus on private label merchandise (which is typically imported) to take advantage of margin improvements, improved quality consistency, and brand loyalty.

For instance, retailer Best Buy realized that it could not compete with the likes of Sony and Panasonic in high-end, premium electronics equipment, appliances, and computers because of these two brands' loyal customer bases. However, Best Buy also realized that no such customer loyalty exists for accessory items. Therefore, the retailer has come up with its own line of competitively priced cable products, as well as other peripherals, such as external drives, USB ports, keyboards, etc. The retailer has also found a niche market receptive to private label TV sets and consumer electronics, at the low and mid-range price points.

Eqos's Current Mission Enabled by a Service-oriented Architecture Platform

Eqos's current mission is to become the leading provider of global sourcing and supplier management solutions for the retail supply chain worldwide, empowering sourcing and procurement executives and clerks to improve time to market, increase customer value, improve margins, decrease operating costs, and scale private label business. In other words, the idea is to enable customers to increase their span of control over their global supply bases, thereby driving competitive advantage and promoting collaborative product and supplier innovation. This is to be achieved by simplifying, standardizing, and scaling the processes associated with the sourcing of private label merchandise across the entire supplier network, by working collaboratively with suppliers. These processes span from the initial product concept through to production and delivery to the retailer's distribution centers (and in some cases, into the after-sale phases).

In addition to software and support, Eqos offers hosting support, user community management, and applications management services. These offerings stem from Eqos's acknowledgement that over time, companies have invested in technology to support their business and supply chain processes. The desire of companies to protect their investments must be balanced with the agility and speed that the market is demanding. This means that newly acquired capabilities must complement existing IT environments in a way that seamlessly integrates information and processes across both old and new systems. The idea (if not an imperative) is to leverage retailers' legacy enterprise resource planning (ERP) and supply chain management (SCM) applications to build forward-thinking cross-enterprise processes that promote collaboration between retailers and their suppliers, buying offices, and other trading partners.

Logically, global sourcing and supplier relationship management (SRM) demand control of enterprise processes and close collaboration with suppliers (all of which may have very different systems or levels of IT expertise). Thus, managing the extensive and diverse retail supply chain requires a simple approach to workflow and project management that is supported by network-wide collaboration.

The Eqos Collaboration Platform is built on service-oriented architecture (SOA) given the closeness of the peer-to-peer (P2P) and SOA concepts, and underpins the entire Eqos solution suite with a flexible architecture that can adapt to rapidly changing business needs and IT landscapes. The application addresses global sourcing, product lifecycle management, and supplier management business flows. It not only streamlines integration with trading partners, but also handles internal integration using flexible extensible markup language (XML)-based servers.

Early in 2006, Eqos announced the launch of its new platform release, Eqos Platform 7, which was primarily an "architectural" release with the following three principal areas of advanced development:

  1. A technology move to Microsoft.NET technologies and Microsoft SQL Server 2005 database to provide better performance. Solution developers can use these well-known and widespread technologies to extend the core capabilities of the Eqos solution.

  2. Further performance enhancements through a more flexible data schema. This new approach has addressed the needs of customers that are embedding collaborative solutions more deeply into their business and increasing the traffic through them, by providing easier navigation and customization of data and reports. To that end, the platform's latest release has significantly improved the scalability and has reduced demands on supporting hardware by two-thirds, allowing more data and concurrent users to be managed than ever before.

  3. Enhancements that further simplify the collaborative application developer's experience, making these applications even more productive. Such enhancements include a richer web user interface (UI), improved password management, and quicker data entry. At a technical level, customers have since been able to define, customize, and manage their web pages and web UI configuration, thereby simplifying the configuration, maintenance, and expansion of application web sites. Further, improved, more flexible installation and configuration options allow customers to adapt the application to meet their changing requirements.

The application is accessible to other programs by using the power and flexibility of integration via Web services (see Understanding SOA, Web Services, BPM, BPEL, and More). XML is used for data mapping and process definitions to Web services, legacy systems, and databases, or to any other third party system. Again, this brings us to the important ability of leveraging existing applications (that is, a view and the extraction of the data from several disparate source systems), such as order management systems, warehouse management systems (WMSs), item masters, vendor masters, etc., and aggregating them on a single screen, thus minimizing traditional “hard-coded” integration costs.

This is part two of the series One Vendor's Quest to Garner a Global Sourcing Ecosystem. Part three takes a deeper look at Eqos's global sourcing offerings and how they could serve the retailing sector.

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