Step by Step
With a legacy of providing a new pair of shoes to a child in need for every pair purchased, TOMS has already left footprints across the globe. Now a recent engagement with GT Nexus offers the footwear company a new way to keep up with its ever-expanding supply chain via the cloud.
Through its One for One movement, TOMS works with more than 75 “giving partners” to help individuals and communities in 50 nations. The shoes are made in South America, Asia and Africa and sold in more than 30 countries; the effort now includes eyewear as well.
With such a “big, growing, complex supply chain,” TOMS needed a better information system to help manage it, says Greg Kefer, vice president of corporate marketing for GT Nexus. And as GT Nexus had experience not only with retailers but also nonprofits like the United Nations’ World Food Programme, the collaboration promised new opportunities for benchmarking and growth.
“TOMS needed to see what’s going on out there, and the cloud is one way to do that much quicker and easier than before,” Kefer says. “The ability to see is actually something that’s been pretty elusive despite a lot of investment for a lot of companies.”
TOMS has declined comment beyond an official statement made at the time of the announcement. In February, TOMS vice president of global supply chain Chris Bonner said the company had been “thrilled by the response” to both TOMS and the One for One movement.
“But such growth adds complexity in our supply chain,” Bonner said. “In addition to a vibrant growing commercial business, we have a large global giving program that ensures donated shoes reach the right people. GT Nexus will help us improve how we collaborate with suppliers and allow us to control inventory flows around the world.”
GT Nexus operates a cloud-based global supply chain platform of more than 20,000 businesses. What makes it unique, says Kefer, is that it doesn’t just offer those businesses their own little space; instead, the platform is a network that allows for industry-wide collaboration. Just about every sector is represented; the growing list of retailers includes ANN INC., adidas, Charming Shoppes and Cost Plus World Market.
No surprise there. Kurt Cavano, founder of TradeCard (which recently merged with GT Nexus), says retail, “especially apparel retail, is the fastest-paced business in the world. What is ‘in’ today is out tomorrow. You need to have complete control of your supply chain to compete in this world.”
The cloud platform is also well-suited to omni-channel operations. GT Nexus focuses on the physical supply chain, but the merger with TradeCard means the financial supply chain enters the picture as well.
“You’ve got people trying to make mission-critical decisions,” Kefer says. “Let’s say you’ve got a sale the weekend after next and you don’t know where those sweaters are. You type that into your system and you’re not really sure if the information is accurate. You’re going to have to get on the phone and start calling people, and then you’re back in the dark ages.”
You’ll pay extra to expedite a shipment, only to have another arrive in the meantime, he says. “And that’s the kind of thing that happens all the time. As a company, you have to operate in a ‘failure-isn’t-an-option’ mode. You can’t afford to be out of stock on a sale. The same holds true for omni-channel, where retailers are trying to get to a single source of inventory.
“Whether the demand is from mobile, e-commerce, bricks-and-mortar or social, you want one source of inventory, to draw from a single pool,” Kefer says. “The problem is that a lot of retailers have a hard time bundling all that into one. They’ve got different systems in different parts of the world or different parts of the country, and they’ve got multiple stores that they own and operate, and it’s very, very hard to bring all that together, because it’s typically tied up in all different software systems.”
Leading by example
From discussions with prospective clients, Kefer finds that many believe they’re doing better at seeing the whole picture than they actually are. He’ll often ask, for example, how many hot shipments they have coming into the Port of Long Beach, Calif., that need to be expedited directly to a store.
“But most companies can’t get that information for hours,” he says. “We believe it should be available in 10 seconds.”
More and more companies seem to agree. Gartner announced last September that the public cloud services market was expected to grow 19.6 percent to $109 billion in 2012 and effectively double to $206.6 billion by 2016. Among the top adopters: transportation management systems, global trade management, collaborative sourcing and procurement and demand planning.
Kefer is careful to say that joining the cloud platform does not mean instant changes; there’s still plenty of work to be done in getting data flows set up and driving change management.
“It’s not something you want to be taking lightly,” he says. “A lot of people say they want to see a lot of proof cases before [taking the leap]. So for the last seven or eight years, that’s what we’ve been doing ... You need a lot of [proof cases] to get a market to shift. It’s not something you just dabble around with for five months and then decide you’re not going to do it. You’ve got to commit to it and bring your vendors onto it.”
As retail increasingly moves toward the cloud, examples from other industries abound — many leading to greater efficiency and corporate responsibility. Kefer tells of a recent GT Nexus customer summit that involved a pharmaceutical company, a high-tech manufacturer, a chemical company and an apparel retailer, all sharing experiences.
“They may involve different commodities and work through different supply chains, but at the end of the day, they’re all simply moving stuff around the world,” he says. “It’s fascinating how these companies compare notes, and how they use common partners ... For example, there are about 30 ocean carriers carrying the bulk of global freight.”
GT Nexus estimates that logistics providers controlling more than 90 percent of worldwide container traffic are currently part of the GT Nexus platform. But it wasn’t that long ago that conversations about the cloud meant concerns about the safety of the data. Cavano points out that it’s “all about the tools you use to protect the data,” no matter where it is stored.
“We’re beginning to see the old fears go away,” Kefer says. “There are enough companies getting involved that we’re seeing more traction. If you look at the customers we have, they’re lighthouse companies. They’re big, global brands, including many of the world’s top retailers.”