Improving Product Development with E-Commerce Tools

Bobbin, Oct, 2000 by David Bassuk

New business-to-business (B2B) e-commerce tools are allowing the soft goods industry to dramatically improve the product development process.

The product development process has never been more critical than it is today, and more and more sewn products firms are looking to Web-based tools and services to help them improve this function within their organizations.

Just how important is product development? Consider these findings of the most recent annual Consumer Outlook Survey from Kurt Salmon Associates (KSA):

* Even when consumers have a clear idea of what they want to buy, only 51 percent actually make the purchase.

* Of the consumers who choose not to buy, 63 percent say the store does not have their size in stock, and 42 percent say they cannot find the item in the store.

* The No. 1 reason consumers walk out of stores empty-handed is because they do not like the styles offered.

The key to making the customer happy lies in product development. Fortunately, opportunities to improve the inefficient product development process abound. In fact, KSA's recent study also identified an opportunity to reduce nearly $7 billion in inefficiencies from the soft goods supply chain through enhanced collaboration in product development.

By adopting collaborative business practices, companies have improved their market responsiveness; introduced more innovative, fashion-right products; and increased the effectiveness of their development teams. In short, such practices are allowing companies to:

* stay abreast of trends by designing closer to market;

* improve forecast accuracy by committing to production quantities with more information; and

* reduce work-in-process inventory levels by improving efficiencies.

These developments translate into increased sales, reduced costs and ultimately, market share improvements.

Design and Development Complexities

Many apparel and soft goods companies rank the product development process as the most complex part of their business. The complexity of coordination required throughout the process -- among the departments and the systems housing the ever-changing information -- is unparalleled.

Consider the following example. A popular women's wear company attempts to reduce its cycle time by creating an integrated calendar of all activities. The problem is that each time it identifies the need for a new activity -- a focus group, an additional fitting, a new sample or another meeting -- the affected departments request more time. So, rather than reducing time to market, the company now faces longer and longer processes. In the final tally, the company has identified 250 product development activities, including more than 40 that occur simultaneously. How can all of this be managed?

It is not just the processes that are challenging. Coordinating people and information throughout the processes is not an easy task. The manufacturing department needs to know what the design department is creating. Pattern graders need to know what the designers are thinking. The specification technician needs to be aligned with the bill of materials and costing groups. As a result, the number of meetings, both formal and informal, that take place just to get one season to market can potentially add up in the hundreds.

Now imagine a world in which these frustrations are reduced. Samples are on time. Costs and margins are within the plan. Manufacturing is able to produce the garments as design has intended. Why has this been so difficult to achieve before? It is because the ability to share real-time information with all required parties throughout the process has been limited.

Different companies' objectives for improving the product development process vary. Some fashion-oriented companies attempt to improve their rate of "hits," or new styles that are successful, by doing everything they can to gather inputs that will improve the chances of bringing a hot product to market. Other companies focus on improving their time to market so they can react to market trends in season, or simply beat their competitors to market. However, many firms attempt to make both improvements at the same time. This often results in opposing directives.

The good news is that both objectives can be accomplished more successfully with effective sharing of information during the process. If key customers are able to view designs prior to receipt of a sample, for example, they can give valuable input prior to raw material commitment dates. Likewise, if manufacturing representatives view designs and specification details as they are created, they often can identify problems before delivery is delayed.

New Web-enabled business tools can help make this possible. Following is an overview of some business-to-business (B2B) e-commerce solutions that can be used to improve the product development process.

E-Commerce Tools for Product Development

Collaborative development portals allow authorized users to collaboratively develop things such as designs, specifications, bills of materials and costs in real-time, shared online environments. Utilizing such tools, each party in the product development process still maintains its own deadlines, but can now perform its function with the benefit of this shared, real-time information.