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TradeStone Software Delivers Omni-costing Capabilities

Written By: Predrag Jakovljevic
Published On: September 20 2013

TradeStone Software, a provider of merchandise lifecycle management (MLM) solutions that unify the design, sourcing, ordering, and delivery of retail goods, has announced the release of Dynamic Omni-Costing. Most product lifecycle management (PLM) systems are rudimentary in terms of product costing, as typically there is only a first cost estimate and possibly a cost broken down by the bill of materials (BOM). Yet, costing functionality is very important to retail, footwear, and apparel (RFA) brand manufacturers, retailers, and vertically integrated retailers.



Sourcing and costing capabilities have long been TradeStone’s market differentiators. The vendor has always provided a detailed BOM and a dynamic what-if costing engine that estimates landed cost by factoring in all of the supply chain constraints, such as freight, duty, and tax. In this way, the buyer can determine a true margin—some customers have reportedly realized 50 -250 basis points in decimal improvements just by understanding an accurate landed cost and making better decisions around the source of supply.

Omnichannel Complexity

With the rise of omnichannel retail, the costing problem has become even more complex, as impact must be understood by channel and market. The margin opportunity with multichannel is considerable, but the execution issues can be risky. Thus, TradeStone helps scale the analytics required to move to omnichannel by providing costing that considers channels and markets served.

The Dynamic Omni-Costing engine spans product development, sourcing, purchase order, open balance, and other attributes such as color, size, and market to address the needs of discrete manufacturing and wholesale/trading company operations in today’s omnichannel environment. This announcement represents a culmination of product enhancements, deployment approach, and business intelligence (BI) and reporting into a true multi-industry costing engine.

Dynamic Omni-Costing can auto calculate cost based on geography (including origin, freight-on-board point, and destination), BOM/components, suppliers, assortment mix, customers/brands, packaging, production period, delivery flow, etc. Cost components can include freight, duty at the finished goods and component levels, inspections, QA testing, brokerage, finance, administration, and other organizational fees.

Benefits seen among TradeStone’s customer community include reductions in unallocated expenses, cost containment and reductions, and the flexibility to adjust designs and materials to achieve margin targets. The capabilities should allow RFA companies to hit the target cost at retail and the resulting profit margins; enable more efficient entry into cost-sensitive categories or markets; and provide clearer line of site to cost/quality or cost/attribute trade-offs during product design.

The Dynamic Omni-Costing engine has been used across multiple product categories, including apparel, hard goods, and food, and in multiple formats, such as apparel, wholesale brands, and trading companies. While TradeStone provides retail PLM capabilities, its can also use PLM data from other PLM solutions that may not have strong costing capabilities.
 
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