October 4, 2010

Haggar's slimmed-down supply chain produces results

Slashing its supplier base helped Haggar Clothing Co. better control costs and boost forecast accuracy.

By Toby Gooley

Haggar Clothing Co. needed to do a better job of forecasting in order to mitigate rising material, labor, and transportation costs, but it was having trouble getting accurate information from its contract manufacturers. Putting the company's supply chain on a "diet" helped the menswear manufacturer both improve the availability and quality of information and cut costs, said David Price, Haggar's vice president–global sourcing, in the session "Planning and Managing the Supply Chain From Asian Contract Manufacturers to the U.S. Consumer" at CSCMP's 2010 Annual Global Conference in San Diego.

Complexity was a big part of the problem, according to Price. Haggar was working with 75 factories in 16 countries to provide fabric, trim, and assembly. Furthermore, most of those relationships were strictly based on price, so there was little continuity and sometimes unreliable service, said Price, who joined Haggar in 2009. "The result was that we found ourselves having to chase down every piece of information for every P.O. (purchase order)," he said.

To reduce complexity and improve service without raising costs, Haggar slashed its supplier base to just 18 manufacturers in eight countries. Today, the apparel company represents 50 percent or more of the business produced by all but two of those suppliers, which gives the company strong leverage when it comes to pricing and service, Price said. Haggar now collects timely, accurate data from its suppliers and works with a third-party logistics service company to track each purchase order after it leaves the factory. Global trade management software has also helped to improve information and planning, he said.