Byline: Elaine Glusac

CHICAGO — When it comes to distribution and vendor relations, U.S. retailers and manufacturers can take a lesson from the Europeans, according to Phil Kowalczyk, director of general merchandise retail services at Kurt Salmon Associates.
“European Quick Response leaders have much to offer those of us in North America who are working to find ways to speed product development, tailor assortments by store and rethink the role of buying and selling organizations,” he said.
Kowalczyk spoke at last week’s IQ 1996 conference here. He was one of three KSA consultants at the session, “Global Vision: Key QR Advances Throughout the World.” The panelists covered QR advances in Europe, the Pacific Rim and the Caribbean Rim.
Among the worldwide QR developments:
* Multilingualism and incompatible technologies have hampered quick replenishment programs in Europe, but the continental market has created an innovative “Fast Fashion” program to manufacture, deliver and manage apparel distribution.
* With significant government aid and industry investment, Japan has created a QR infrastructure in only 20 percent of the time it required North American major department stores to achieve their initial QR success.
* In the Caribbean Rim, largely an export-based market, QR aims to make suppliers more efficient. Although the NAFTA agreement has accelerated trade, a lack of investment continues to hamper distribution in this region.
Kowalczyk said while Europe is still struggling to establish common EDI standards and bar code labeling, its efforts have focused on building better vendor relationships and speeding production cycles.
“North America has launched into [speeding] replenishment and honed and refined inventory management,” he said. “In Europe they are concentrating on fashion, but the two regions have a lot to learn from one another.”
Kowalczyk said retailer Marks & Spencer in the UK has credited its vendors with helping it turn apparel inventory over nine times each year. Marks & Spencer works with few suppliers, sticks with them when times are tough and publishes a timing and action calendar for product development and delivery.
Although many European textiles and apparel companies are located in close proximity, Kowalczyk said the key to the fast-fashion system is better coordination between partners.
For example, Kowalczyk said, when a knit manufacturer in Wales receives an order from Holland on Monday, it dyes the yarn to specification and knits the yardage by Wednesday, sends it overnight to a 24-hour cut-and-sew operation in Amsterdam and is able to ship the store by Saturday.
Another European advance, he noted, is “Pronto Moda” in Italy. Under this system, junior shops in large retail stores are managed by the manufacturer. The vendor splits the sales receipts with the store on a 70/30 basis. Oviesse, of the Coin Group, uses the program extensively and turns its stock 5.5 times per year, Kowalczyk said. This compares with competitors, who turn inventories about 2.2 times per year.
In the Pacific Rim, Japan and Hong Kong are mobilizing QR strategies through a government and industry partnership, said Jerry Black, KSA’s director of retailing consulting in Japan.
Japan’s Ministry of International Trade and Industry has committed to funding 100 percent of pilot programs in electronic commerce for 1996, Black said. The government has developed a business plan to implement key QR concepts modeled after U.S. practices through 1998.
The initiative is under way at Japan’s Hankyu Department Store, which gets electronic orders from only 2.6 percent of its 3,000 vendors. Those vendors account for 22 percent of Hankyu’s sales.
Among the QR benefits Japanese firms hope to achieve are better in-stock levels, improved order accuracy and shortened lead times, Black said In the Caribbean Rim, QR aims to make contractors better suppliers to North American clients.
“U.S. textile manufacturers are showing interest in becoming apparel suppliers using North American fabric and owned apparel manufacturing resources in the region,” said Sergio Cruz, regional service director of Caribbean and Latin America for KSA.
Cruz said joint ventures in Mexico and an increase in Caribbean contracting by North American companies should help spur investment in the region, including improving the telephone lines that are “inadequate even in metro areas.” — Fairchild News Service

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