Page 5: Driving change through information technology
One of the key ‘drivers’ for change was the development of the Group’s Integrated Supply Chain Management (ISCM) system. ISCM is the back-of-house supply chain IT system used by the Burton Group. Introducing the system involved the largest staff training programme ever undertaken by the Burton Group and this has had a major impact on all job roles within the organisation.
The main benefit of the new system is ‘on line’ stock visibility through all stages of the supply chain bringing greater supply chain control. ISCM has provided a common system with standardised operating procedures across all retail brands. ISCM provides common communication to all Multiples external contacts (such as suppliers and carriers). The benefits of the IT development programme continue to feed their way across the organisation - benefits will increase over a number of years thus enhancing the process of Fastflow.
Getting it right - Hipsters
The benefits of Fastflow were crystallised in the autumn of 1995 when Top Shop first picked up on the trend for Hipster Pants. At this point, the buying teams were still unsure whether they would be a fashion ‘hit’ or ‘miss.’ However, because the Group has built up an excellent relationship with five suppliers of Hipsters, based on the new Fastflow approach, it meant that the suppliers could respond quickly when the new style finally took off.
The Group first tested Hipster Pants at Top Shop in October 1995. Initially just 200 pairs a month were sold, but by February 1996, demand had soared to 30,000 pairs per month! The chain coped with this sharp increase in sales as suppliers quickly increased their volumes in order to respond to the challenge. Their quick response was due to the efficiency of Fastflow.
Fastflow’s success is also well illustrated by a recent innovation involving Evans stores which now means they can react to colour trends during the season. The chain has cut the number of T-shirt sources of supply from four to one. The remaining supplier balances product finishing between the Far East and the UK to gain the maximum flexibility. Products from the Far East will be cheaper, mainly because of lower labour costs, but will take longer to transport to the UK. Locally-sourced products will be available sooner, allowing the retailer to react to fashion trends at a later stage in the selling season, but will be more expensive.
Evans found a combination of the two sources provided the optimum supply. Product for early in the season was dyed at source and then sent to the UK. Later on, T-shirts were brought into the UK by the supplier in their greige, or un-dyed form, then dyed and delivered to stores in gradually decreasing lead times to react to colour trends. The project married the benefits of lower-cost production on lower-risk classic colours on long lead times from the Far East with improved sales later in the season from fast turnaround fashion colours sourced in the UK.
Fastflow enabled the store chain to react to consumer demand particularly in high season. T-shirts sourced for the beginning of the summer season, for sale in March, had 15 week lead times from the long-haul source and came in basic colours. Eleven-week stock was introduced in April and then midseason, in May, the chain started to source over six weeks and two weeks. By the end of the season, in July, 40% of the T-shirt offer was turned round in two weeks, another 40% in six weeks and the remaining 20% was 11 week stock. This example highlights the key aspects of the Burton Group’s Fastflow process and philosophy.