Richter's Model for Success
The merging of global sourcing and transportation with industry-specific manufacturing creates a golden opportunity for software providers. The apparel and fashion business in particular is prime territory.
Staking its claim to this territory is Richter Systems Inc., based in Montreal, Canada. Founded in 1968, Richter focuses its software applications on the apparel industry.
"The apparel industry has been a technology laggard," notes Martin Doettling, Richter's vice president of marketing. "The apparel industry has not embraced the latest and greatest in technology."
Richter's core product is called SUCCESS. It is comprised of two major components: sourcing management and demand management that is targeted at manufacturers, wholesalers, distributors, and importers.
The SUCCESS sourcing component is built from five different interacting modules:
- Planning offers full insight into sourcing activities. It creates action notices that are useful to planners, buyers, and expediters. It has flexible path/step logic that gives advanced bill of material rules, and resource loading guidelines.
- Purchase order offers open purchase order balances, including contracts and drawdowns, as well as in-transit control and the capabilities of auto-completion.
- Production provides long- to near-term planning using material consumption methods, drawdowns, and loading rules for resources.
- Inventory maintains the visibility of a company's multiple sites, and inventory balances through customer-defined profiles.
- Costing supports financial and variance analysis.
The SUCCESS software is targeted at high-end retailers—those reporting more than $150 million in revenue. The program is best suited to companies that have IT infrastructures that tie into their overall planning and business strategy, and can support and maintain Richter's client/server solution, which uses Oracle development tools that are part of SUCCESS.
Mirroring this application, but based on different technology, is Richter's new product, Richter Express. Richter Express is a complete IT solution designed for smaller manufacturers and retailers ($20 million to $80 million in revenue).
"Richter Express was developed to help companies that do not have an information technology structure, and do not have the resources or manpower to maintain a complex IT infrastructure," says Doettling. "In most small companies, IT consists of laying wire and connecting computers. It is not a business or planning strategy."
An interesting trend is emerging in the apparel industry, Doettling notes. The big companies are getting bigger by buying small companies. These companies can only grow more efficient, more effective, and become real global players if they build huge IT infrastructures to support the business.
Small companies in the apparel business fall into three categories, Doettling says. First are those who say they have been running their business for 30 years, know how to run it, and don't need supply chain management software.
Second are the forward-looking apparel companies, led by new breed, Generation-X, no-fear visionaries who build a $100-million business overnight. These young entrepreneurs understand the benefits of a strong IT infrastructure.
Third are the e-commerce players. These new entrants to the apparel industry come with a dot-com strategy, and their perspective allows them to tap into venture capital money. Startups will continue to flourish in this new arena, Doettling says.
The Y2K issue has forced the apparel industry to address IT concerns. Companies know they must address the issue or face problems come January. Some companies are deciding not to just fix the Y2K problem, but to create an IT infrastructure that lets them build into the next century.
Liz Claiborne, a new Richter customer, falls into the category of companies that have bought into a large IT infrastructure. The company has implemented the SUCCESS software as part of its IT-enabled reengineering project.
The large-scale retailer (more than $2.6 billion in annual revenue) manages complex manufacturing and retailing operations globally. It has installed the Richter SUCCESS sourcing and demand management software on 1,200 computers worldwide.
"The SUCCESS software helps us manage our supply chain smarter and faster," says John Thompson, CIO of Liz Claiborne. "Most importantly, it improves customer responsiveness."