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Index CCAA 28th Conference on the Caribbean [TC]² Activity Member Profile - Sara Lee Corporation Important Dates A Look Ahead

CCAA 28th Conference on the Caribbean

On December 6-8, 2004, the CCAA (Caribbean-Central American Action) held its 28th annual “Conference on the Caribbean” in Miami. The purpose of the CCAA is to facilitate increased trade and investment flows to the small economies of the Caribbean and Central America. The theme of the conference in Miami was “An Integrated Third Border” and its purpose was to bring together leaders from the public sector and the business community to have a constructive dialogue about issues affecting the region and its economic prospects. More than 600 people were in attendance, including seven heads of state.

Jim Jacobsen, the Vice Chairman of Kellwood Company, is the Chairman of CCAA. He very capably represents and promotes the needs of the apparel industry. Other industry sectors include agriculture, energy, financial services, intellectual property, telecom, tourism, and transportation and logistics. Federico Sacasa is the Executive Director of CCAA and Jose Perez-Jones, Senior VP for Seaboard Marine, Ltd., is the current President.

During the conference, each of the sectors had the opportunity to meet in a roundtable format to discuss issues pertinent to the sector. The apparel roundtable was moderated by Jesus Canahuati of Elcatex in Honduras and Mike Fralix of [TC]². The panelists included Julio Berea of Russell Corp., Richard Coles of Multi-Tex in Haiti, Jerry Haar of Florida International University, Alfonso Hernandez of Argus International, and Mike Todaro of AAPN.

The apparel roundtable was challenged to discuss that while the region has benefited from the provisions set forth by the CBI, the 2005 apparel quota phase-out and China's entry in the WTO have dramatically altered the privileged position that the region once enjoyed with the U. S. They were then asked to answer such questions as: Can the region survive the surge of China's apparel exports? Can the region become more fashion-oriented with a quick-response cycle time? Is Full-Package the answer? Will the region simply become a “strategic” supplier to the U.S? Do CBI provisions allow for vertical integration?

At the end of the roundtable a plenary session was held and each of the moderators was given an opportunity to summarize the key action items that were discussed. Dr. Fralix presented the results of the apparel roundtable. Included in his remarks were:

Next year's CCAA conference will be held in Miami on December 5-7 and its theme is titled Strengthening the Third Border.

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[TC]² Activity

Collaborative Planning in Apparel

The Voluntary Interindustry Commerce Standards Association (VICS) has been defining standards for doing business in the manufacturer, distributor, retailer and consumer supply chain since 1986. VICS currently has seven active committees where standards, technical specs and business processes are being developed to facilitate commerce in global supply chains. One of these committees, the Collaborative Planning Forecasting and Replenishment (CPFR) committee has just formed a subcommittee to focus on apparel. The apparel subcommittee membership includes several manufacturers, a retailer and several solution providers. They are actively recruiting additional members. (See www.vics.org and www.cpfr.org .) The objective of the subcommittee is to refine the business processes for apparel, which in general has longer lead times, a shorter selling period and a more complex mix (style, color, size) than most other consumer products.

CPFR has been defined as “a business process for value chain partners to coordinate plans in order to reduce the variance between supply and demand.” In a CPFR partnership, the buyer and the seller have a collaborative agreement with specific business goals like in-stock %, order fill rate, DC service level and forecast accuracy. Nine business process steps were identified to guide companies into collaborative relationships.

Recently, the CPFR committee has redefined the CPFR model to make it easier to understand and easier to implement. Iterative ongoing processes have superseded the nine steps. The general model of CPFR below shows the business processes and how they are related in a continuous cycle.

A case study of the Wal-Mart CPFR initiative has been published by the VICS CPFR Committee. The experience so far with 1300 suppliers connected through Wal-Mart's Retail Link system has the suppliers sharing responsibility for the in-stock position of their products. Better in-stock rates result in increased sales and more brand loyalty. Research has shown that consumers will pick a competing brand 50% of the time when their first choice is not found.

There are two levels of Wal-Mart CPFR suppliers. The “full suppliers” create a sales forecast and it is compared with Wal-Mart's forecast. The Retail Link system compares the store-level POS forecasts for 52 weeks and generates exceptions or differences which are reviewed collaboratively on line. In the study, the full suppliers achieved the following results: in-stock rates improved by 7.85%, weeks of supply shrank by 5.3% and inventory turns increased 3.72%. The “moderate suppliers” used the retailer's forecast. The more active moderate suppliers who exchanged more than 100 collaborative messages achieved an average of 96.97% in-stock. The less active who exchanged fewer than 100 collaborative messages achieved in-stock rates of 93.87%. Wal-Mart defines in-stock as having one day's supply on hand.

Other CPFR pilot studies have been completed by Ace Hardware, Best Buy, Pharmavite, Sara Lee Branded Apparel, West Marine, Kimberly Clark and TAL- JCPenney showing positive results in forecast accuracy, increased sales, reduced inventory and fewer out-of-stocks. So why have most apparel companies been slow to adopt CPFR? One member of the committee offered that there is too much emphasis on product price and not enough on inventory management. What's your opinion?

Jim Lovejoy of [TC]² has been a member of the CPFR committee since its inception. Opinions or comments will be forwarded to Jim.

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Member Profile
Sara Lee Corporation

Nobody Doesn't Like Sara Lee!

Sara Lee Corporation produces high-quality, brand name products known worldwide. Headquartered in Chicago, IL , with operations in 55 countries, Sara Lee has 150,400 employees around the world. With leading brands that are household names, Sara Lee's growth has come from innovative ideas and products that have met consumer needs and expectations while delivering exceptional quality and value.

Sara Lee's apparel roots began in 1901, when brothers Pleasant and John Wesley Hanes started companies to make men's underwear and hosiery. Splitting the one-piece men's undergarment – the union suit – into two, Pleasant Hanes paved the way for today's many underwear choices – T-shirts, boxers, briefs and more. In 1918, John Wesley switched to women's hosiery, setting a new standard in 1938 when a partnership with DuPont led to nylon and seamless hosiery.

Today, Sara Lee Branded Apparel is one of Sara Lee Corporation's three lines of business, and its portfolio includes not only Hanes underwear, sportswear, socks and hosiery but also Champion, Playtex, Bali , barely there and Wonderbra intimates; and Just My Size, a leading apparel and intimates line for the plus-size woman. The company also markets products under licensing agreements with Donna Karan, DNKY and Polo Ralph Lauren.

Hanes became part of the Sara Lee portfolio in 1979 when Consolidated Foods Corporation, later Sara Lee Corporation, acquired the Hanes Corporation. Since then, Sara Lee Branded Apparel has since expanded globally and grown from $450 million to nearly $7 billion in annual sales. Today, Hanes is the largest brand in Sara Lee's portfolio. Quality and innovation continue to be hallmarks of Sara Lee Branded Apparel products, with introductions in recent years of seamless bras and panties for women, tagless T-shirts and underwear for men and StayClean fleece and activewear for the whole family.

For more information on the products and many brands of Sara Lee, visit their website at www.SaraLee.com . Follow the Our Brands section for direct links to each brand individually.

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Important Dates

January

February

March

For detailed information about industry events, visit www.techexchange.com

Thanks to the techexchange site sponsors Blinco Systems Inc., Gerber Technology and Methods Workshop.

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A Look Ahead

January 25-27 – Colombiatex, Medellin, Colombia

March 16-18 – Material World, Miami Beach Convention Center

View previous editions of this newsletter

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