A Well-Heeled Supply Chain

The days of getting by with "The check is in the mail" are long gone. If a business can't pinpoint the exact location of any commodity in its global supply chain and interact in real time with the entire network, from suppliers to consumers, its competitive advantage is severely compromised.

Esprit designs, produces and distributes a variety of clothing including sportswear, children's wear, footwear and accessories, as well as an assortment of Dr. Seuss merchandise. Esprit also offers licensed products such as swimwear, bath and bed accessories, eyewear and watches. The brand is available in department stores, specialty stores and 350 Esprit retail stores worldwide.

Executives of the company saw that handling supply chain information manually or via a limited-access proprietary system was becoming an outmoded, ineffective and costly way to do business. Dan Allison, director of global logistics for Esprit in San Francisco, wanted a system that would provide detailed, accessible information throughout the entire process--from the pre-transaction negotiation stage to proof of delivery.

"Esprit is a global business with a presence in 44 countries and a complex distribution channel that includes over 500 wholesale and retail outlets in the United states and U.S. territories alone," says Allison. "We deal with many partners, and we have high shipment volumes that are destined for multiple locations. So we desperately needed a way for everyone to access real-time information from a single source."

For the highly seasonal apparel business transparency of the entire shipment process and quick execution of orders along the supply chain are crucial to success. Products have to be brought to market when consumer interest is high or they will languish on store shelves.

Digging for Details
Allison and his team settled on Capstan 2.0 from Capstan Systems of San Francisco as the basis for Esprit's real-time system. A Web-based, integrated suite of applications that provides end-to-end coverage of the international trade transaction life cycle from purchase order to delivery, Capstan 2.0 is comprised of four main modules: transaction management, logistics management, export management and import management.

Each module can function as an independent unit. The modules contain banks of standard regulatory data and can be customized to ensure compliance with contracts and internal company policies. Transaction workflow is incorporated within each module and across all of them for scaleability.

According to John Fontanella, research director of e-fulfillment strategies for AMR Research in Boston, the modular structure is a benefit. "This approach enables a staged adoption cycle and ensures rapid rollout of each module," he says. "Its component architecture should also provide quick benefit realization, since it allows the user to implement functions incrementally. There is no big-bang install here."

Esprit initially will use the Capstan 2.0 logistics management module, which unifies and automates the logistics process through features such as integrated load planning, transportation management, booking, shipment load and confirmation, shipment merge and consolidation, track and trace, and reporting.

"For the first time, Esprit will have complete visibility and control over its entire global supply chain," says Allison. "Supply chain partners in 23 countries will be participating in the first full rollout of the system."

Counting Cost
AMR's Fontanella points out another possible benefit to users: Capstan designed the system to be hosted on the Web using the application service provider (ASP) model. For a yearly subscription fee a company has unlimited use of the Capstan solution regardless of the number of users or transactions. An Internet connection and a standard Web browser provide global access to Esprit's Capstan modules.

"The XML exchange server is the product's backbone. It dovetails with virtually all of the standard back-office applications," says Allison. The ASP arrangement eliminates investments in software, hardware to run it on and IT personnel to roll it out and train users. Capstan handles systems management also, so there are no maintenance costs for the user.

Real-time collaboration was an essential feature for Esprit. The company will be able to send and track shipment information via the Internet with its suppliers, third-party logistics providers, brokers and customers. "We know what's going on at every moment, and the system alerts us to situations that require attention early on, so we can handle and resolve developing problems rather than simply respond to issues that are already in progress," says Allison.

He also likes Capstan's scaleable structure. In the second phase of the rollout, Esprit will implement the Capstan 2.0 Import Management module to simplify import compliance and documentation generation and make the entire process more efficient and less subject to human error. As a result, Allison expects the company to save time and money.

"In the Web-based supply chain, the winners will be vendors that can take emerging technologies and transform them into something that delivers value to users," AMR's Fontanella predicts. For industries such as apparel that have complex demand dynamics, easily deployed grow-as-you-go applications should be useful virtual partners.