Custom Media

" Fashion companies are almost entirely dependent on bringing goods in from multiple global sources. Fashion retail chain Anchor Blue is no exception. The problem was, it had little control over its supply chain operations. The company had no visibility into where goods were and it was taking on average three-and-a-half days for product to move through the distribution center. The lack of visibility led stores to order more product, which increased inventory costs. And if goods were lost, it took dozens of phone calls to resolve the problem while the store went without merchandise.[1]

Companies like this are facing the new manufacturing conundrum:

• You built a centralized distribution center (DC) network 10-20 years ago based on sourcing in the U.S. or NAFTA countries;
• You’ve moved production offshore to multiple regions that are continually changing, so now you’re shipping product across the country to your old DCs often to ship it back again to your customers;
• Your suppliers can’t provide the value-added services needed to meet customer requirements;
• Ports and the areas around them are congested;
• Transportation costs are out of control due to limited capacity and escalating fuel costs.

These conditions are not going to change—in fact, the complexity of the global supply chain will most likely increase. What companies need to remain competitive is flexibility in their DC networks.

'In reviewing all of these issues, we decided it made the most sense to outsource the DC to a third-party logistics provider,” said Richard Space, senior vice president for logistics and sourcing for Anchor Blue. “It was clearly not this company’s core competency and it was costing us a lot.'"