August 2003 | Case Studies | I.T. Toolkit

Logility: May the Source Be With You

No tags available

Collaborative sourcing management steers Bell Sports toward greater control over its brands.

Whether you're crossing the Pyrenees in the Tour de France or crossing the playground on training wheels, Bell Sports has a product for you.

A mere six years ago, Bell Sports derived most of its income from its well-known line of cycling helmets. Since then, mainly through a series of acquisitions, the company has evolved at a pace Lance Armstrong would appreciate into a market leading purveyor of high-end and mass market helmets, bike racks, lights, air pumps and myriad other cycling accessories. Through brand ownership and licensing agreements, it markets products under names such as Bell, Giro, Blackburn, VistaLight, XGames, Barbie, Hot Wheels, and Fisher Price.

The "old" Bell Sports made most of its products in the United States. The newer, much larger incarnation still operates a factory near Champaign, Ill. But like so many brand owners in today's global economy, it outsources most of its production—of high-end helmets and nearly all its accessories—to suppliers in Asia.

The revolution in its business model has forced Bell Sports to rethink its procurement strategy. And that rethinking, in turn, has spurred the company to embrace new technology to manage its sourcing.

When it started selling brands manufactured overseas, Bell Sports relied on third-party sourcing agencies in Asia to manage relationships with suppliers. But the company's executives quickly realized that their brands were too valuable to entrust sourcing to outside service providers.

"We didn't control our destiny in terms of trying to make that process truly a competitive advantage," says Jeffrey Gregg, executive vice president and general manager of Bell Sports' mass market division. The time and money the company spent working with third parties did not yield especially good results.

Moreover, "we were not moving the ball forward in terms of product—differentiation, speed to market, those kinds of things that traditionally have been critical to making our business successful," he says.

To remain a leader in design, quality, supply chain management, and service, Bell Sports had to conduct its own sourcing. "We needed not to rent that core competency, but to own it," Gregg says.

So last year, Bell Sports established a sourcing operation in Hong Kong. It shifted most of its product development and engineering to that office, along with quality control, vendor management, and logistics management for products manufactured overseas. As it brought those functions in house, Bell Sports outlined a detailed process for developing and sourcing products. But an important element was still missing.

Nothing to Put it In

"We had some really great structure for tracking projects, development, and milestones," Gregg says. "But we had nothing to put it in."

The company relied on e-mail, spreadsheets, phone calls, and videoconferences to coordinate the work of its teams in Hong Kong, the United States, and other corporate locations. These "weren't horrible solutions for the circumstance, but we knew they certainly weren't long-term solutions," he says.

To get the operation up and running in 90 days, company officials also decided to continue running the business on their current information technology platform, "a somewhat antiquated ERP solution that had been mildly tailored to what we do as a business," Gregg says.

In the fall of 2002, Bell Sports started looking for technology to help handle sourcing and supplier management, and especially to provide better visibility into the product development process. The solution had to be web-based, it had to be simple to understand and use, and it had to require minimal integration with the ERP and other information systems, Gregg says.

This April, the firm chose Voyager Global Sourcing Management from Logility. Bell Sports was already using other Logility solutions for demand planning and purchasing. These have helped the company reduce inventory by 60 percent, Gregg says.

Logility's solutions for collaborative planning, forecasting and replenishment (CPFR) allow companies and their suppliers to share information about long-term needs. The new product helps consumer goods companies extend collaboration to shorter-term concerns, such as choosing offshore manufacturers and monitoring their performance, says Karin Bursa, vice president of marketing at Logility in Atlanta. Logility released Global Sourcing Management in February.

The solution started with a focus on production visibility. "The offshore manufacturer needs to provide information on work in process," Bursa says. The brand owner uses the software to establish milestones and assign responsibility for each step in the process. Pre-defined alerts inform the brand owner if any of these milestones are missed.

Logility next added functions to manage the front end of the process—supplier relationship management. These modules help the brand owner develop bid request packages, coordinate the bidding, and compare responses from vendors. The software provides a way to share product specifications, quality testing procedures, and other information about production requirements. It also provides tools for scoring vendors on performance and using that data in future sourcing decisions.

In implementing Global Sourcing Management, Bell Sports is focusing first on the front end of the process. Even before it assembles a request for proposal (RFP), the company will use the system internally to ease communication among all the people who work on a product—product managers, marketing managers, sourcing managers, engineers and packaging designers—in multiple locations.

China to the U.S. to Ireland

The problems Bell Sports needs to solve are fairly simple, Gregg says. "How do we manage the information, summarize it, and make it visible from China to the United States to Ireland to wherever? And how do we manage basic issue resolution," making sure that when problems arise, the right people find out and can work together across time zones to solve them promptly?

During the bidding process, Global Sourcing Management will replace e-mail with a more organized tool for receiving and evaluating bids. "You can see Vendor A's bid, you can see Vendor B's bid, and you can understand how that bid is loaded," Bursa says. "Does it include transportation costs? Is it delivery to my DC or is it just in-country delivery?"

Bell Sports had expected to implement these functions by the end of July. By year's end, it will add production visibility. Suppliers will use a browser to view their open purchase orders and report when they meet specified milestones—when they receive raw materials, for example, and when goods have been released to production.

With all communications about an order passing through one pipeline and stored in one place, "you've got one version of the truth and one place to go to get that," Bursa says.

"Right now, we pick up the phone and say, 'How's it going?'" Gregg says. Global Sourcing Management will make those communications more reliable, giving Bell Sports confidence about incoming orders, which could help it cut inventory further.

The solution allows companies to schedule transportation and quality inspections. It also provides a repository for information about a product, including pictures, inspection instructions, technical details, and sourcing information. Any employee of Bell Sports or the manufacturer who needs to review these items can access them through the system.

Bell Sports expects the new software to streamline the company's product development and sourcing procedures. "We are doing these things okay now, but we're doing them in the ugliest way possible," Gregg observes. Greater efficiency will help the company focus its resources and reduce the overhead involved in managing projects and solving problems, he says.

Big Hands, Little Hands

The system will also give people lower in the hierarchy the power to move projects forward. "We get to the escalation button far too often, the way we are today," Gregg says. "It's not that things don't get done, but it takes big hands, as opposed to little hands, to get them done."

With the new system, employees on different continents collaborating via the web can make decisions on their own, "rather than everything coming to a screeching halt and waiting for a conference call or a video conference" among top managers after business hours.

A company such as Bell Sports faces complex communications issues, especially when creative professionals and detail-oriented professionals need to collaborate, Gregg says. As a communications tool, Global Sourcing Management "offers more support, more visibility and more documentation—it's less verbal—so we can effectively manage those kinds of things."

Supervisors can monitor exchanges on the system, and if communications break down, employees can use it to ask upper management for help.

"When we're talking about the product manager who handles the Barbie line, how do you translate 'crazy/cute' for an engineer in China?" Gregg asks. "This is my lifelong dilemma: how to build cool stuff for a buck and how to translate crazy/cute."

With new sourcing management technology, Bell Sports could lose a lot less in translation and gain a lot more control over the destiny of its brands.

Digital Editions

October 2014 Cover

Full Digital Issue

October 2014

(132 pages • 21.15 MB PDF)

July 2014 Cover

Full Digital Issue

July 2014

(261 pages • 56.1 MB PDF)

2014 Logistics Planner Cover

Digital Edition

2014 Logistics Planner

(162 pages • 23.2 MB PDF)

2014 Shipping Lines Directory Cover

Digital Edition

2014 Shipping Lines Directory

(9 pages • 0.63 MB PDF)

Thought Leaders Cover

Digital Edition

Thought Leaders

(6 pages • 0.27 MB PDF)

Memphis: America's Multimodal City Cover

Digital Edition

Memphis: America's Multimodal City

(1 pages • 2.62 MB PDF)

Star Search: Discovering the Best Site for Your Business Cover

Digital Edition

Star Search: Discovering the Best Site for Your Business

(1 pages • 1.33 MB PDF)