End-to-End Digitalization Allows Retailers to Go Beyond Traditional PLM Systems
Product lifecycle management (PLM) software has become a necessity for retailers and brands that have partly or fully outsourced their supply chains. The right PLM can help businesses shorten product development cycles, reduce time to market, and control costs, all of which are essential at a time when consumers are demanding more variety than ever before. In fast-moving sectors like apparel and consumables, a PLM solution is particularly essential for staying responsive to consumer trends.
In truth, however, most product development software on the market doesn’t do nearly enough. Between the growing complexity of the supply chain and new processes required by the increased scrutiny of retailers’ value chains, a PLM alone is insufficient for ensuring that products are brought to market as quickly, cost effectively, and responsibly as possible. Businesses that only implement PLM software are addressing just a narrow portion of the processes and challenges involved in sourcing merchandise.
Recent supply chain shortages, inflationary pressures, and the decisive global push toward social and environmental responsibility have only further underscored the need for brands and retailers to adopt more comprehensive digital solutions. Businesses that outsource their supply chain need to take a true end-to-end view of their processes. That means implementing a multi-enterprise platform that can optimize not only product development but also sourcing, order management, quality management and logistics. Only through this all-encompassing view, which allows stakeholders across departments to work together as a complete unit, can companies achieve the next level of cost savings.
Amid tightening ESG regulations, many of which require closer collaboration with suppliers to navigate, more businesses are turning to multi-enterprise supply chain platforms, also known as multi-enterprise collaboration networks (MCNs). As Gartner notes in a new Market Guide, “there is a driving need for more resilience and transparency in the supply chain. Organizations experience greater disruptions than ever before, so collaborating effectively with one’s trading partners is a must-have capability.”
Multi-enterprise platforms enable a community of trading partners to coordinate and execute business processes that extend across multiple enterprises, providing end-to-end visibility and enhancing collaboration between businesses and their suppliers while enabling progress on ESG goals. They also facilitate smarter, more cost-effective material procurement. The right platform can not only identify missed cost-saving opportunities and show landing costs for different commodities based on countries of origin, but also help predict demand and identify alternate or future supply sources.
These cloud-based platforms create visibility into prices, supply bases and costs, enabling predictive sourcing and allowing buyers to negotiate more transparent agreements. When brands and retailers have full visibility into their complete supplier base, down to the Nth tier, they’re better able to mix and match materials during the specification and procurement process. This visibility is invaluable for sourcing competitively, with the added benefit of providing flexibility needed to adjust when supply chain disruptions occur.
Comprehensive Systems Foster Efficiency
For brands and retailers with outsourced supply chains, the needs of supply chain departments are vast and varied. As port backups have become more pervasive, logistics departments require timelier, more reliable data. Sourcing managers need efficient systems for managing enormous global networks of suppliers, selecting and onboarding new vendors, and collecting and comparing quotes.
Merchandisers also require smarter systems for confirming orders with suppliers and for getting status updates on orders after they’ve been issued. They need to ensure that any changes to those orders are received and approved by suppliers — which is often more difficult than it should be since the industry’s reliance on spreadsheets means that parties are often working from inaccurate or outdated information. Too often key product details are siloed across disparate emails, Dropboxes, WeChat and WhatsApp messages.
The right multi-enterprise platform addresses all those challenges. A connected supply chain management software suite can extend the data that businesses are already entering into their PLM and make it available to all stakeholders across all departments. This software serves as a central conductor of all supply chain operations, monitoring orders and suppliers and keeping departments on-track.
On their own, PLMs are insufficient to help businesses stay ahead of tightening ESG regulations. However, multi-enterprise platforms introduce an array of increasingly critical solutions. For instance, due to recent supply chain due diligence laws like the United States’ Uyghur Forced Protection Act and Germany’s Supply Chain Due Diligence law, large brands and retailers must be able to track and document the chain of custody for every raw material used in every good they produce.
Multi-enterprise platforms enforce ESG in other ways as well. Supply chain mapping and impact measurement tools allow businesses to more accurately back up the sustainability claims they make about their products, which is essential as regulations have pushed back against greenwashing. Carbon-tracking tools and carbon action plans, meanwhile, allow businesses to achieve ambitious Scope 3 emission reduction targets.
Brands and retailers that have implemented product development software have made the necessary first step toward digitalization. A PLM remains an invaluable tool for brands and retailers, especially those looking to scale their private-label operations. However, it’s only the beginning. Businesses need a multi-enterprise platform to optimize the entire product development process from ideation to delivery. By using totally integrated software, they can avoid the inefficiencies that result from using incompatible systems while ensuring they’re prepared to meet the growing challenges of managing complicated supply chains.
Eric Linxwiler is senior vice president of TradeBeyond, a company that connects retail supply chain operations from product development to delivery.
Eric Linxwiler is senior vice president of TradeBeyond. He has over 30 years of experience in enterprise software and cloud-based platform companies with a specialty in supply chain optimization and workflow management. Contact him at email@example.com to discuss how the TradeBeyond platform can address the supply chain challenges created by new ESG regulations.