TradeStone Software STARS 2013: Retail Rocks! Part 2

Part 1 recapped TradeStone Software's user conference, STARS 2013. 

TradeStone’s Core Capabilities

TradeStone Software’s bread-and-butter capabilities continue to be sourcing, supplier management (including quality testing, inspections, and social, legal, and compliance-based supplier performance as exemplified in Guitar Center’s case study), and order management, which includes global trade management (GTM) as well. Enterprise resource planning (ERP) systems cannot really do sourcing, generally speaking. The following activities are what they typically don’t do well:

  • Handle item specifications and order line and header details before they are firm.

  • Provide collaboration of buyers with vendors pre and post order placement and replenishment.

  • Handle order changes well both on the line and header levels.

  • Accommodate setting up the relationships between the Sell, Trade, and Buy companies

  • Functionally they don’t do much with product development, vendor collaboration on costing, quality management, or raw materials sourcing and ordering.

Moreover, strategic sourcing software providers such as Ariba, Emptoris, SciQuest, CombineNet, etc. are not of much help either when it comes to sourcing retail goods. Conversely, TradeStone Software speaks in retailers and suppliers’ vernacular exactly. As opposed to discrete-manufactured widgets that have long product lifecycles and only a few specifications, retail goods are much more short-lived and are full of attributes such as color, artwork, size, fabric, etc. (see Figure 1). Product briefs, technical specs, tech packs, and dossiers, among others, are the terms used to describe the elaborate details that retailers send to their suppliers in the form of requests for proposals/quotes (RFP/Qs).

These packs can include info on the product line overview, design intent, bill of materials (BOM), constructions (e.g., cuts and sewing instructions), handling instructions, points of measure (POM, e.g., chest, sleeve, bodice, armhole, etc.), samples, and relevant design and compliance standards. Often, before the order is agreed upon and placed, one needs to handle and track samples and their approvals, changes to design, and so on. Softlines (apparel items) seem to have much more specs info at the level of the individual item and are typically sourced from multiple possible suppliers. Hardlines (e.g., glassware, cookware) work more at the level of item collection and are typically sourced from a single place.

Figure 1

TradeStone Software is not a demand sensing, assortment optimization, and demand planning/forecasting system per se, and some more precise demand data might be imported from more specialized solutions, e.g., JDA Demand Planner, Quantum Retail, or JustEnough. Similarly, better financial planning data might be imported from, say, Oracle Hyperion. But once it has the data, TradeStone Software can perform elaborate planning, such as viewing financial plans and product collections/programs. One can check the work in progress (WIP) critical paths, and perform what-if analyses in the visual buying program calendar, as well as what-if costing scenario analyses, Harmonized Tariff Schedule (HTS) pre-classifications, and line reviews.

The product offers significant production forecasting capabilities such as material sourcing and commitment, material consumption and liabilities, vendor capacity planning, vendor and factory allocations, and production management. A Production Dashboard screen shows a material projections summary. Although there is currently no out-of-the-box visibility for potential material shortages (and how best to optimize and re-plan), custom reports can be designed as required. By forcing users to do everything in a table-like screen, TradeStone Software cures the so-called Microsoft Excel addiction. Recently, TradeStone Software struck a partnership with Microstrategy to embed its business intelligence (BI) tools in TradeStone, and dedicated reports and dashboards for executives and other roles are coming (some are already available, see Figure 2).

Figure 2

Tackling Product Design

Several years ago, TradeStone Software introduced new capabilities in retail product lifecycle management (PLM) as a logical add-on to sourcing and creating tech specs. The Creative Design Center showcases a color library, artwork library, material library, and many other libraries that can be imported from places like Pantone Match System. In the design center dashboard, users can edit pictures and be taken straight to Adobe Illustrator (if they have the license).

Given that competitors like PTC, Lectra, Dassault Systèmes, Centric, NGC, etc. have longstanding design pedigrees and integration with many more of the popular design tools, by comparison TradeStone’s design user interface might be more compelling and design functionality deeper. But some bells and whistles that TradeStone Software users like to use would be the following:

  • Smart Copy—for more efficient creation of tech specs and product briefs from existing designs

  • Threaded Messaging—discussion forums that intend to cut e-mail traffic, although some social features à la Yammer or Facebook such as feeds, follows, groups, user profiles, etc. have yet to be made available

  • Change Alert Subscriptions—whereby users can select the topics and items for which to be alerted (somewhat similar to social follows)

  • Vendor Onboarding Wizards— which guide users through the necessary steps during sourcing and order management

Some recent and/or upcoming enhancements are in the realm of order management. While the Order Builder, Vendor Dashboard, Packing List Builder (from which vendors can invoice directly) and Trace & Track (for visibility) features were already there, it is now possible to split orders on the fly based on vendor performance. The new Supplier Recommendation module provides a search engine and added intelligence that scans selected supplier profiles, filters a list of viable options based on defined criteria (e.g., kosher, vegan, certifications, competencies, finishes, treatments, capacity, etc.), and filters to an RFP/Q (see Figure 3). Packing lists, advance ship notices (ASNs), bills of lading, costing, invoicing, and payment processing capabilities are extensive, but TradeStone Software often has to work side by side with order management and invoicing functionality within a customer’s back-office ERP system.

Figure 3

Retail Marketplace and Community

This is not your father’s retail world any longer. Buyers are becoming sellers, retailers are establishing trading companies (sourcing outposts), and suppliers want in on the action.

During the conference, the team from Family Dollar Store presented about change management intricacies and the lessons learned during TradeStone Software implementation. The customer also discussed having created its own trading company in Hong Kong called Tar Heel Trading. Trading outposts help with local oversight of quality, local knowledge, and pricing expertise. They buffer the business from bribes or other local practices that are not legal in the US. Moreover, custom inspection and control is less complicated for a trading company that has the custody of goods, and there may also be some benefits in terms of duties, tariffs, and taxes (but this varies by commodity and country of origin).

Bamboo Rose, TradeStone’s cloud marketplace, has also had some traction, allowing designers, buyers, and suppliers to interact socially, be immersed in the shopping experience, and then transition to TradeStone to make sourcing and buying decisions. In a Pinterest-like fashion, retailers’ buyers now have a slick way to capture what inspires them. They can collect images (even if it is an early idea sketched on a napkin) with their smartphones on the go and inspire others. Once they have seen what they want, they can share their wishlist sketches and drawings with others in their creative departments to produce more detailed designs. Alternatively, they can tap into Bamboo Rose’s approved global resources and discover suppliers, designers, and buyers that share their vision. Once the prospective suppliers have set up showrooms based on the retailer’s wishes, buyers can shop across supplier showrooms for more ideas and products. They can plan actual shopping trips, order samples, and so on. When buyers are ready to transition from the shopping experience to the buying process, Bamboo Rose can send the design information to TradeStone to create tech packs, RFQs, and purchase orders.

Apparently, since the marketplace’s launch in 2012, a few retailers are already using Bamboo Rose and collaborating with about 20,000 vetted suppliers in a semi-private exchange manner. Pricing seems reasonable ($100 per month or $900 annually for each approved participant), and once the critical mass is reached, Bamboo Rose should represent a nice recurring revenue stream for TradeStone Software. Needless to say, setting up an account for Bamboo Rose and getting started is almost instant, and compares favorably with the weeks and months required to implement traditional TradeStone Software solutions.

Daymon Worldwide, a full-service global retail branding and sourcing partner that works directly with the suppliers and retailers to drive sales and growth through customized brand-building and sourcing solutions, was also present at TradeStone STARS. The chief supplier officer spoke on the company’s omnichannel initiatives and how the partnership with TradeStone to offer PLM and Bamboo Rose capabilities is enabling its customer teams around the globe to communicate, collaborate, and coordinate sourcing programs more efficiently on a single platform (see related video).

What to Expect in 2013 (and Beyond) from TradeStone Software

TradeStone Software is reportedly coming off its most successful sales year to date, where the company had double-digit growth and added a number of new customers globally, including Hot Topic, New York & Company, Daymon Worldwide, Gap, and Kaufland (a German hypermarket) to name but a few. This year is off to an even better start than 2012, and the vendor considers the NRF 2013 conference a phenomenal success. It views the conference as a good bellwether for the year, and given the number of meetings that have already been moved into the pipeline the company might be in for another very good year. Still, the fierce sourcing competition goes on against Core Solutions and Trace One, as well as against PTC, Dassault Systèmes, NGC, Centric Software, and Lectra in both the design/PLM and sourcing realms.

In 2012, TradeStone Software released a number of functional capabilities to help customers manage and mitigate risk, such as production forecasting and capacity planning, materials management, and quality management. The focus in 2013 will be the Trading Company Management module to connect buying from retailer’s vendors with selling to its customers, the Supplier Recommendation module, and data analysis in the form of packaged BI gadgets.

The company outlined its future integration roadmap to advance from its current capabilities of document-oriented Web services (passing data back and forth). Next improvement steps will be prebuilt integrations (that have a certain purpose), a TradeStone integration server (leveraging open source middleware), and cloud-based integration services (testing, color services, Retailsnoops, etc.). The vendor is also cognizant of the need to beef up its customer support and account management team in Asia, and some hiring has already taken place (and continues). TradeStone Software is also working on its system integrator ecosystem expansion, which was absent from STARS 2103 (with the exception of IBM, the only sponsor present). Kurt Salmon, SD Retail Consulting, Logica (in France, now part of CGI), and Tradestream (South Africa) are other established relationships

Given that everyone is abuzz with omnichannel marketing but hardly anyone is an expert in omnichannel supply chain, TradeStone Software is forming customer advisory boards to work together with customers on platform, analytics, omnichannel supply chains, brand building, and other topics. Speed to market is the goal here.

See also
TradeStone Software Presents Bamboo Rose
NRF 2013 Highlights: Technology Driving Customer-centric Retail
“Act Vertical” vs. “Go Extinct” Retailers
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