Web-based Solution Steps Out for Cohesive Retailer Sourcing
Written By: Predrag Jakovljevic
Published On: August 2 2006
Progressing Towards Unified Buying Process
As a gradual and logical evolutionary step, in mid-2005, TradeStone Software, Inc. (http://www.tradestonesoftware.com), a provider of collaborative e-sourcing solutions for Global 2000 companies, set its sights towards becoming the leader in enabling domestic and international sourcing through a "unified buying process." This is a bold strategic initiative to support a single cohesive view and business process for both international and domestic sourcing, for both buyers and sellers, across diverse systems, organizations, and geographies. The idea is that the process should not be separate for buying brands and private-labeled products. To that end, the vendor announced the commercial availability of its Unified Buying Engine, a technology platform that should enable user companies to streamline all purchasing into a single view and business process.
Part Three of the series Collaborative Sourcing Solution Vendor Leaves No Stone Unturned.
For information on TradeStone's history, see Collaborative Sourcing Solution Vendor Leaves No Stone Unturned. Also see A Well-designed Solution for Sourcing: Its Technological Foundation and How It Works.
For an extensive discussion of global retail sourcing, see The Gain and Pain of Global Retail Sourcing, The Intricacies of Global Retail Sourcing, and The Fashion and Apparel Retailers' Conundrum.
Owing to the technological foundation that enables supply chain visibility (via reporting and queries and alerting for exceptions), as well as critical path management, best practice modeling, workflow and collaboration, TradeStone's Unified Buying Engine is designed to work with an existing buying and sourcing infrastructure that may include legacy systems such as product data management (PDM), forecasting, order entry, warehousing, and finance. This design enables it to enhance existing systems reasonably quickly with expanded functionality, while converting disparate islands of information into truly collaborative nodes, resulting in a single, unified buying process.
As mentioned many times before, buyers and sellers in a typical supply chain must access multiple internal and external systems to view data, create transactions, and somehow collaborate to update constantly changing information. The unified buying process consolidates these multiple systems for both sides, masking the underlying complexities that cross multiple systems and geographies by enabling the same way of buying goods worldwide, regardless of sourcing location, language, currency, lead times, and so on.
Throughout the history of sourcing, companies (especially retailers) have naturally focused their efforts on domestic systems. However, approximately 70 percent of a store's merchandise is reportedly produced outside any retailer's home country, and the advent of a truly global marketplace creates the need for a sophisticated sourcing system that addresses the complexities of international sourcing. By implementing a unified buying process, retailers should be able to more effectively leverage the margins that are currently being left "on the table" when goods are not sourced internationally in a smart way. Since the process also welcomes smaller, disadvantaged players (thereby creating a level playing field for a truly global market), the end result should be the acceleration of business decisions, and access to a greater choice and diversity of products.
The Engine represents the underlying technology platform of the released and renamed TradeStone Suite (formerly the SteppingStones Suite), which is comprised of five modular applications, further complemented by the TradeStone Tools, which enhance an organization's ability to tailor the suite to best meet their business needs and reflect their business processes, rules, logic, exceptions, and exclusive nuances in the fully implemented solution. Tools include the TradeStone StepBuilder, the TradeStone CompositeBuilder, and the TradeStone QueryBuilder. As in its predecessor releases, embedded workflow processes foster collaboration among far-flung buyers and suppliers throughout the collaborative commerce community, while the modular design allows a more rapid deployment, as well as a system which is priced according to the size and scope of the implementation.
TradeStone Suite Modules
TradeStone Suite modules are sold independently, along with the Unified Buying Engine. They can be configured alone (if only to plug gaps in some missing global sourcing functionality) or as part of a broader solution, while the optional tools are sold separately. The modular applications are listed below:
Designed for all product planning, design, costing, and allocation needs, this module enables planning refinement, and tracks assortments, line lists, flows to stores, product traits, bill of material (BOM), images, specifications, product hierarchy, vendor compliance, merchandise calendar, merchandise charts, delivery channels, delivery flows, and so forth. It aims at providing users with the flexibility to design a product as a function of budgets, units, available materials, trims, capacity, and so on. Collaboration flexibility with multiple suppliers before an order is placed should enable them to take advantage of trends, new styles, cuts, colors, and the like. Users can even establish a collaboration history with the technical design group, merchandising, and the factory, and develop critical path product milestones for merchandise types. A product definition workflow handles BOMs, assortments, line lists, channels and specifications, whereas the product brief capability is a repository of preliminary concept information against plan. The initial product planning capability allows what-if modeling with dynamic costing, creation of product variations on the fly, creation of sell channels (pre-defined by color, size, delivery, and flow), and visibility into margins.
Designed to read information from TradeStone tables and other product design-focused systems in the organization to create requests for quotes (RFQs), this module enables users to normalize information received in vendor offers, auto-calculate landed costs, and create planning calendars. It invites vendors to interact and collaborate on the design and delivery of products, while monitoring vendor performance relative to established tolerance and product expectations. The module also takes care of customs pre-classifications, separate packed items, set and nested items, European Article Number (EAN) item codes for stock-keeping units (SKUs), libraries of attachments, pre-packed items, bulk size or color ratios, product testing, and sample management. So as to quickly develop comprehensive RFQs for both domestic and international sourcing, the product pulls information directly from the product brief repository, and invites suppliers to review and provide quotations.
The comprehensive RFQ Builder walks merchants and buying professionals through workflows to build RFQs from the product brief repository, and attaches drawings, designs, and technical packages. Vendor collaboration is enabled to allow users to consider design suggestions from vendors, and answer any questions as they come in. The module then compares offers from multiple suppliers (which have all first been harmonized for language, currency, and lead times), to then select suppliers based on best attributes for product goals (for instance, margins, time-to-market, or precise quality specifications). One can also have an offer history and comparison report, where a user can view and compare all offers, again standardized with respect to currency, language, and lead time, and also taking into consideration the costs of freight, customs charges, and fees. The Estimated Landed Cost Engine automatically provides costing for freight, fees, and customs, and recalculates automatically when pricing changes.
TradeStone Unified Order Management
Designed to track finished goods, raw materials, blanket orders, and aggregations by customer, channel or store type, this module enables quality assurance, vendor and channel management, and planning. It also supports the creation of smaller, more frequent orders, thus giving retailers the ability to respond to sales data and changing market conditions via multiple delivery and destination, dynamic updates, and order status and management capabilities. The tightly linked product brief, RFQ, order, packing list, and invoice modules eliminate redundant data entry, with a date and time stamp for all commitments and change orders, whereas the collaboration history provides one central repository for all product discussions.
This module was designed to track and manage containerization opportunities, shipment building, trace and track offers, visibility of orders, items and components, container visibility, and bill of lading (BOL) visibility, as well as government-related processes, including customs and duties calculations, actual landed cost generation, and vendor performance analyses and reports. The module aims at simplifying containerization, volume utilization, and shipment options, by applying packaging recommendations and automatic bar code generation. It also provides vendor-generated packing lists and commercial invoices: all standard documentation for transportation, customs, and so on, is pulled directly from the purchase order, and the notification to upstream supply chain stakeholders is sent too. Standardized invoices and customs documents are provided (whereby packing list and invoice are tied to purchase order for accuracy), and service invoices cover agent fees, customs fees, and the like.
The track and trace capability provides virtually real-time visibility into order status and location, whereas the visibility to shipment status capability enables a view of the status of all products (from quality tests to packaging to shipments), and the status on any inventory liability. Sarbanes-Oxley (SOX) Section 401 compliance is supported via a codified agreement information with electronic date stamps, critical path management for any change in status to an order, and if-then-else planning capabilities. The containerization and multi-routing capabilities provide ocean versus air what-if scenarios and split orders (whereby users can change allocated quantity, mode qualifier, lading point, destination, or price).
Designed to focus on invoicing, costing, banking, and other financial processes, this module integrates with banks for on-line financing or LoCs (letters of credit), commercial invoicing, electronic payment, purchase orders (POs), and open accounts. It also enables vendor self-invoicing (since from the packing list one can automatically create, audit, and approve vendor invoices, thereby significantly reducing invoice payment processing expense), audits against tolerances, and waiver collaboration. Furthermore, it enables landed cost reconciliation.
Basically, the module reconciles planning, manufacturing, and sales, since the reporting tools compare seasonal plans, commitments, WIPs, and items received, and also compare estimated versus actual landed costs and selling prices (the more components the estimate can take into account—such as the cost of quality testing, agent fees, tariffs, taxes, duties, and exchange rates—the closer the user can come to the margin forecast).
It also assists suppliers with proper documentation and invoicing practices, whereby suppliers can pre-populate standard forms, such as advanced shipping notices (ASNs), bills of lading (BOLs), commercial invoices, and service invoices, all with critical visibility into payments for all parties: workflows for finance users are automatically updated with pre-payments, change orders, and advanced shipments. The payment processing and reconciliation between commitments capability identifies which items have been manufactured towards the plan, and which items have been paid for towards the plan.