Appleseeds (www.appleseeds.com) offers specialty apparel through distinct catalogs, retail stores and the internet. The merchandise sold through retail channels are primarily private label, and 70% of its items are imported from Asia, using both sourcing agents and direct factories.
Connecting with its International Sourcing Agents & Factories
Several years ago, Appleseeds launched a strategic initiative to improve visibility of inbound orders using Advance Ship Notices (ASNs) sent directly from the factory where the goods were made. Connecting to global partners was required, but they lacked the internal systems and resources needed. Appleseeds quickly decided that this type of integration was not their core competency.
Based on the recommendation of one of their partners, Appleseeds contacted SPS Commerce and learned how its outsourced EDI service could provide a direct link between Appleseeds, their agents and their factories.
In 2005, Appleseeds began live testing using SPS' WebForms service to communicate with Parklane, a direct factory in China. It went well, and the company is now able to receive ASNs directly from this factory. Six months later, sourcing agent Li & Fung performed similar testing with its factories, and within a month, Appleseeds was submitting all purchase orders to Li & Fung via EDI.
At that time, Appleseeds was the first company to use SPS' new forwarding function with international sourcing agents. This capability enabled their agents to send Appleseeds POs directly to the selected factory, removing all sensitive information. Using only a browser, these remote factories could receive their orders, print their labels and send the corresponding ASN.
On-Site Meetings & Trainings in China Build Trust
Recently one of Appleseeds' other sourcing companies, Cheung Brothers, shipped their first shipments using its ASN program. Today, all shipping and order communications with Appleseeds' international supply chain partners are done electronically using SPS Commerce's outsourced services.
This final step in their program was accelerated by meetings and trainings in China with representatives from SPS' Minneapolis and Beijing offices. These meetings enabled Cheung Brothers to understand the entire process, how they would benefit from the automated solution, and the requirements of both agents and factories. Appleseeds knew that agents had a more direct relationship with the factories; SPS needed to build the agents' trust in the program in order to gain factory cooperation. SPS neeeded the agents to understand and trust SPS' solution. This was accomplished, and the program is running smoothly.
Barcode Labels Decrease Receiving Time by 50%
In addition to ASNs, Appleseeds worked with their agents and factories to incorporate SPS' labeling service into their shipping process. Using this online solution, factories in Asia can now create and affix a label for every case that ships from their factory. When its cases arrive at the Appleseeds distribution center, they can be quickly scanned and sent directly to their appropriate location within the warehouse. With this change, the company has greatly increased their throughput and ability to process receipts, with only a small number of cases needing to be unpacked and re-packaged. Using the barcode label service from SPS, Appleseeds' warehouse staff can process 600-650 units per hour. Previously, only 300 units per hours could be processed as they needed to open all cases to verify content.
Next Step: Targeting the Domestic Supply Chain
With their international supply chain running smoothly, Appleseeds plans to reach out to their larger domestic vendors (responsible for ~30% of its inventory) in 2008 and add them to the ASN program.
"Appleseeds has achieved what many thought was impossible — connecting with our international sourcing agents and factories via EDI," said Jack Lally, Distribution Center Manager at Appleseeds. "By teaming with SPS Commerce, we can focus on other aspects of our business, while they provide the technology, expertise and staff to ensure that our communications with these locations are processed smoothly and securely. Today, we have reduced receiving times by 50% and more than 99% of POs are processed error-free."
