You wouldn't blame Steve Bernier for getting his knickers in a twist. Just a few years ago the supply chain operations at Haggar Clothing Co. were perking along smoothly. Each day unfolded according to a predictable pattern: electronic advance shipment notices (ASNs) popped up on computer screens, alerting the staff to the impending arrival of, say, 15 cartons of expandable waistband pants.Within an hour of their scheduled arrival time, the cartons materialized on the dock ready to be processed by the awaiting staff. Life was good.
But, changing fashions in Haggar's international sourcing strategy brought on a drastic reshaping of this well-tailored operation. A couple of years ago, Haggar's logistics guys started to see things revert to a pre-electronic state of affairs that was as anachronistic as a mini-skirt revival. "We moved from having a lot of information to having no information," recalls Bernier, who's vice president of logistics at the Dallas-based company. "We were just getting paperwork and packing slips, which were turning up with the goods.We went from complete electronic visibility to a situation where we issued purchase orders from our system with due dates and then just hoped it would all turn up on time."
What happened at Haggar is a story familiar to apparel manufacturers across the country. The company, which makes men's casual and dress apparel as well as women's sportswear, found cheaper places to manufacture its garments. At one time, all manufacturing was done in the United States. Then Haggar started importing goods from Mexico and the Dominican Republic under the so-called 807 U.S. tariff schedule (which means cloth can be cut in the United States and sewn in a designated country like Mexico, incurring import tax only on the value added abroad). That worked fine … for a time. But inevitably workshops in Asia and other far-flung locales came strutting down the catwalk of global trade, hoping to attract business with flashy ensembles that featured favorable government tariffs, quota agreements and lower labor rates. Today, Haggar imports 50 percent of its goods from an ever-changing patchwork of around 20 different countries in Southeast Asia, the Indian subcontinent, Africa and even the Middle East.
That shift brought other problems too. As a relatively small player in the importing business (Haggar sells around $500 million worth of clothes a year, which means about $250 million worth of goods are imported across the Atlantic or Pacific), Bernier complains that shipping companies were holding back some of his shipments when higher-volume customers needed the space. "With being a small player out there, we were at the whim of not getting on the fastest ship or getting bumped from ships," he says. "We didn't have the economies of scale to prevent that."
Sew far away
Though some might go storming to management with demands to rethink its sourcing policy, Bernier and his colleague Greg Jones, Haggar's director of industrial engineering,made their peace with the notion of an ever-changing supply chain and resolved to fix the information problem instead. "We will continually be moving to places we've never been before," Bernier says. "So we accepted that our challenge would be to go from a closed-loop system where we had good visibility and accuracy, to a situation where [that was rarely the case]."
But that doesn't mean they've resigned themselves to eternal chaos. In April 2002, they bought a software package called e-SPS from New Generation Computing, a Miami Lakes, Fla.-based vendor that specializes in apparel supply chains. It's basically a purchase order tracking system, but because it's Web-based, it provides an international network that any Haggar supplier—existing or new—can plug right into. "We create purchase orders in our system and they're immediately available to any manufacturer worldwide," explains Jones. "The system gives them access to all the product specs.We're also using it for production tracking, label generation by the factories, tracking and finally for sending ASNs to our DC for all of the shipments created around the world."
Contrary to what you might expect, no advanced technology is required. All a manufacturer needs is a modem, a PC and a rudimentary knowledge of computers (and English) in order to feed vital information back to Haggar in Dallas or download updated orders and product specs. During the rollout of the e-SPS system last year, Haggar representatives went out into the field and provided handson instruction in how to use the software. But now, Jones says, most agents and manufacturers can get connected using a training CD supplemented by a telephone help line.
With that problem behind it, Haggar has been able to move forward with another change in its supply chain— shipping direct from factories to its customers. Traditionally, all incoming garments were routed to Haggar's DC in Forth Worth, Texas, and distributed from there. But as more of Haggar's customers began maintaining a presence on the West Coast, it no longer made sense for the company to route product that was being unloaded at West Coast ports through Texas. It helped that Haggar's manufacturers were willing to deliver clothes "pre-cartonized" to retailers' requirements, ready to be unpacked and placed directly on the store floor, eliminating the need to send them through the DC.
Haggar expects to move more than 10 percent of its goods direct to the customer this year, with hopes of nudging the volume up to 20 percent in the next several years. "Our goal is to continue to direct ship as our business grows so we don't have to expand our DC," Bernier says.
Finding their voice
Ironically, at the same time the company is arranging for more direct shipping, bypassing the DC, operations have been improving steadily inside that DC. It's partly a result of improved visibility and partly because of a new voice picking system from Lawrenceville, N.J.-based Voxware.
As picking operations go, Haggar's tends to be among the more complex. Because the company participates in continuous replenishment programs with its customers, most of the picks involve small numbers of items rather than full cases. The orders, based on point-of-sale information, are generated either by customers or by Haggar itself at least once a week, and then picked and shipped. "Our picking operations used to rely on paper pulling, but we had a higher than expected error rate with that," says Bernier. "So we went with a voice picking system 18 months ago."
In many ways, voice was not the natural choice for a DC environment that is, as Bernier describes it, "very challenging." Not only are noise levels high, but the volume also varies widely from one part of the DC to another, as staff move toward and away from thundering high-speed conveyors and slat-sorters. Voxware provided a calibration device on the individual pickers' equipment that allows them to sample the ambient noise level at any particular time; the system then adjusts the picker's voice profile to make it easier to hear instructions received and to relay spoken responses.
After the system was fully staffed, the company recorded its biggest month ever in terms of units shipped last January. But it wasn't all wrinkle-free, Bernier says. "The ramp-up involved training 40 people across two shifts, so we had a learning curve of a few months," he reports. Changing from a sight to a voice basis doesn't necessarily suit everyone, he adds. "We've found there are pullers who were very efficient at paper pulling who aren't as productive with voice picking, while others have become more productive with voice." Offering voice communications in Spanish as well as English has proved an enormous boon, as around 50 percent of Haggar's warehouse staff—or "associates," as the company likes to call them—are native Spanish-speakers.
With the new system in place, Haggar can use its distribution center management software, developed by Manhattan Associates, to allocate orders according to customer and dispatch them to the picking floor. "With paper, we had an interim step where we had to generate all this paperwork. The price labels and catalog labels all had to be collated before we could even begin picking," Jones says. "Now it's all ready to go."
Haggar's DC has 46 packing stations, each of which is equipped with a thermal transfer printer. When the system diverts a tote from a tilt tray, all of the labels that belong with that order get printed up and married up with the product. The system will also identify any special packing requirements, such as the need to attach hangers or bag the items. Haggar prides itself on being at the forefront of the trend in the apparel industry for providing "floor ready merchandise," and the combination of the new picking system with the warehouse management software has made that a great deal easier.
Say the right thing
Easier, maybe, but not infallible.Voice technology, Bernier concedes, is not an instant fix. The company initially lost some of the capabilities it had with the old paper system, which had to be re-engineered into the voice-based technology. "You have to say: 'We're not going back; this is a good thing and we just have to work through whatever issues come up,'" Bernier says. "And it's important to listen to feedback."
At first, DC associates resisted the notion of donning a backpack with a battery and being wired up with a headset and cables. But the company was able to modify the equipment in response to their complaints. "We tweaked things along the way to make it more comfy," Bernier says.
Then there was the matter of training, which turned out to be more time-consuming than the company had expected. "You need to have focused trainers, experts on the system, who can do the training.We have trainers on staff who do only that. It's not something you can delegate to a supervisor to show an associate in a matter of minutes. [It takes] several hours," Bernier says. "Beyond that, it's a matter of making sure associates understand the logic of the voice dialogue itself—what to say when."
Despite the company's efforts, some problems persisted into the early months of this year. Many associates reported that they found the product code numbers hard to see and read into the system. In March, Haggar decided to supplement the pickers' voice equipment with line-of-sight handheld scanners. Scanning the corresponding bar codes instead makes life a lot easier, Bernier reports. It just goes to show, there's no one-size-fits-all solution in the complicated world of apparel logistics.