Managing the Supply Chain
May 4, 2009-- Home Textiles Today,
During the many executive presentations at last month's JCPenney annual analysts meeting, one of the key messages that came forth was the growing sophistication and streamlining for efficiency and competitive advantages of its sourcing operations.
It's a refrain being heard of late at a growing number of suppliers and retailers around the world. While Penney is very focused on direct imports, perhaps more so than some of its major competitors, it has narrowed the field geographically. It's looking at doing business in 11 or 12 countries vs. the some 60 it has used in the past.
As a company that is product-driven by fabrics, whether for apparel or home, it has reduced the number of fabric mills used from 800 to 150 to enable the company to pre-position greige goods needs and purchases.
Even more important, it has squeezed days and weeks out of the "concept to store cycle," cutting the calendar for all private brands by a minimum of 41 days. One of the interesting things about the Penney scenario is that while the company views China as the long-term lynchpin in manufacturing, it has already established a diversified sourcing network where manufacturing could quickly move from one country to another as need requires.
The sense coming from the home textiles world is that some of Penney's key competitors — namely those folks in Bentonville and Minneapolis — are intensifying their efforts in direct imports corporately. Some of the home textiles campaigns to do it all internally may be tempered in today's environment by the realities of merchandising and competition.
We're beginning to hear that some of these programs are coming to back to more conventional suppliers that are based off-shore but provide other elements needed in the merchandising and marketing of home textiles products.
Over the last year or two, it appears that Penney has been more intensely dedicated to internal product development for home while some other retailers may be moving a bit back, but not retreating. The issue of self-sourcing and the critical changes in these approaches is coming more and more to the forefront with Goliaths like Li & Fung and fast-fashion specialists like Uniqlo, Zara and H&M all looking to change the norms of the past decade. In home textiles especially, where redundancy is the operative word — because everyone seems to want to do what the other guy is doing — total concentration on self-created product could be a danger signal.
Perhaps it's time to step back and remember who brought them to the dance.
Related Content By Author
Industry Related Content
More From the NY Market: It's All About Product!