SYSTEM PREVIEWS SOURCING COSTS
Byline: Jeanette Hye
NEW YORK — By using a new version of simulation software, apparel manufacturers have the ability to predict the costs and financial implications of their manufacturing and shipping decisions.
The software, Sourcing Simulator 2.0, is an analysis tool that allows manufacturers to understand how their services affect key financial measurements in the sourcing and production cycle, giving them a competitive edge. Using the software, companies can factor how raw material lead time, process time, shipping time and minimum order quantities affect the profits generated by the manufacture and sale of products.
This latest version of the Sourcing Simulator, from the not-for-profit research firm TC2, Cary, N.C., is the first to allow manufacturers and their suppliers to access this information. The first version of the software provided financial data only to retailers. Retailers currently using the software include Gap, Nordstrom, Dillard’s, J.C. Penney, Bergdorf Goodman, L.L. Bean, Federated Department Stores and Lands’ End. Manufacturers that are taking advantage of the technology include Tropical Sportswear International and Healthtex, a division of VF Corp.
The software is based on several years of research by Dr. Russell King and Dr. Alan Hunter of the University of North Carolina. They worked closely with Gap to develop the system.
The Sourcing Simulator takes a variety of factors into consideration and allows the user to structure the most sensible plan for ordering, manufacturing and delivery.
The software evaluates each factor, such as retail price, wholesale cost, product assortments, vendor reliability, consumer demand, anticipated markdowns, and determines the best approach to sourcing the product. The user can determine replenishment or assortment strategies, for example, based on the profit the simulator says each approach could generate.
A single license for the software is available for $750. An upgrade charge from the previous version is $450. TC2 will offer a one-day workshop on the Sourcing Simulator in Cary, N.C., on Nov. 18.