Automating a retail supply chain

Having worked with their existing provider for 12+ years, a large Australian fashion retailer and importer was looking for some fresh thinking.

The customer felt that they no longer knew what good looked like and were seeking a new partner with a strong reputation for innovation. In 2020, Ligentia was selected to take on the management of its international supply chain with the objective to improve supply chain efficiency, increase vendor compliance and deliver added value.

The solution: a risk-managed end-to-end solution leveraging automation and digitalisation to maximise efficiency

The requirements of the project were complex. To ensure the solution could be up and running as quickly as possible, the technical solution providing real-time critical path milestone PO lifecycle visibility from origin to distribution centre locations in Australia needed to replicate the existing set-up – including 12 separate integrations with their internal systems.

From day one, we made a number of enhancements to the existing supply chain operations, including:

• A tailored Landed Cost calculator with SKU level data visibility
• A new Vendor Portal to handle bookings, PO confirmations, buyer to supplier communication, supplier confirmations and online ‘Declarations of Origin’ (replacing a ‘certificates of origin’ process which required paying fees of $75USD per PO)
• Self-service tools for the supply chain, merchandising, buyer, allocation and finance teams delivered through Ligentia’s Customer Hub
• Reduced number of hubs in China from 4 to 2, and Shanghai hub was moved to a bonded facility
• Vendor management and performance including SOPs
• Automated electronic documentation removing manual paper-based processing

The original implementation was delivered with a significant focus on risk management, including the following measures:

• Transition from incumbent carefully scheduled and managed so as to not impact key trading periods
• Technical solution matched legacy set-up in terms of integration points to maximise stability of the supply chain during the transition
• Comprehensive vendor education programme to support vendors through the change and train them on the new processes
• Dedicated individuals supporting the customer’s buyers and allocators on use of Ligentix and self-serve tools

Value added services offer further efficiencies

In addition to the technical solution, Ligentia provides value added services to further optimise the customer’s supply chain. Delivered at our 4 dedicated hubs (Shanghai, Shenzhen, Mumbai and Melbourne), and crucial to the vendor compliance support that we provide, these services include:

• Receive PO’s from their numerous overseas suppliers
• Full unit piece count and QA check of all inventory received
• Pre-retailing services including price label check, unit size, colour, style, hangar and stitch check
• Prepare the products so store-ready including security tagging
• Port split each order against store allocation using WMS
• Repack for shipping to 4 distribution centres

The customer’s logistics team works closely with our customer success team on the ground in China to anticipate and mitigate volume spikes. However, there are strategies in place to ramp up output for peak periods such as Christmas trading.

The impact: efficient and cost-effective operations – under control

Over the first year of the partnership, we supported the customer in shipping, storing and distributing 4500TEU into Australia. What’s more, the customer has benefitted from:

• $1.7m USD saved using digitised ‘Declarations of Origin’ instead of ‘Certificates of Origin’. Suppliers have also benefited from $600K cost savings
• 87% container utilisation achieved in year one of the contract, +7% on the previous record
• End-to-end visibility of their supply chain – from booking to delivery to stores
• A global supply chain operation that works far more efficiently and effectively than previously
• Through effectively managing purchase orders to ensure that priority items arrived in Australia when they were needed, the customer was able to achieve growth during the pandemic when other retailers struggled

Following the successful first year of the engagement, Ligentia is moving into a phase of continual improvement, with the aim of reducing technical complexity (where this is possible) and driving further innovation to allow the retailer to extract even greater value from their supply chain.