Stores Magazine - December 2007 - (Page 48)

NUTS AND BOLTS / SUPPLY CHAIN TREND IN CHINESE IMPORTS (in billions) es by American consumers; 42 percent said they would purchase a toy made overseas because of a lower price – but nearly one-third said they’d be willing to pay up to four times as much for a toy made in the United States. When it comes to assigning blame for unsafe products that make it to store shelves, roughly the same number of people point the finger at foreign manufacturers (33 percent) as at the import companies (30 percent); 17 percent said the U.S. government isn’t doing enough to safeguard against the problem, and 89 percent said it should put pressure on China and other countries to increase product 300 250 The value of goods imported to the United States from China has grown nearly 4,600 percent since 1987 200 150 100 50 0 1987 1992 1997 2002 Source: U.S. Census Bureau, Foreign Trade Statistics TOTAL RECALL ith high-profile recalls so much in the news of late, the industry is not only focusing on quality assurance and improving manufacturing practices around the world, but also on how to effectively and efficiently manage the recall of potentially harmful products. There are many aspects to reverse logistics, “but the first has got to be notification — finding out which stores have tainted merchandise, alerting them that they have it and telling them how to send it back or destroy it,” says Tom Kozenski, vice president of product strategy for Waukesha, Wis.-based RedPrairie. The cornerstone of RedPrairie’s recall strategy is its centralized database of shipping information: It provides end-to-end visibility across supply chains, thus enabling companies to know where all products came from and where they are located. “From there, we can automate instructions on what to do with products — whether they can be sent back or simply destroyed,” Kozenski says. “And if they are sending product back, we can make sure we get them the vehicle to do it.” While manufacturers are primarily responsible for recalls, they are working closely with retailers on moving the product. “Without the proper tools, it becomes a manual instruction or necessitates a lot of phone calls and e-mails,” Kozenski says. “A real-time system is essential. Without it, it could take hours to figure out who’s got the recalled merchandise. “If you don’t know who’s got it, you can end up taking everything from every store off the shelves; we’ve seen that happen.” RedPrairie’s warehouse management solutions also facilitate recalls. “If the merchandise being picked up is going back to a warehouse that has our system, we have the information at the warehouse on what to expect and in what quantities in order to confirm all returns,” Kozenski says. “It’s good to have historical information on what you got back for those who are accountable to government agencies or outside auditors. It also gives firms a good understanding of how much product is still out there that has to be recovered.” W quality and safety standards. An important, but often overlooked, aspect of the recall issue is the fact that, of the more than 20 million Chinese-made toys that were recalled this summer, many were ultimately cleared. And of those that were determined to be flawed, more than half were as the result of design, rather than manufacturing, errors. The majority of those products were designed in the United States and Europe, not China. In 2004, NRF led the effort to establish the Fair Factories Clearinghouse (FFC), a system for retail and consumer brand companies to manage and 2006 share supplier audit information on a non-competitive basis. FFC’s audit management system is a secure, web-based application that helps companies track compliance at suppliers’ factories with respect to labor, security, environmental and qualitycontrol requirements. As a result, FFC provides its member companies with much greater visibility and control over their sourcing operations and supply chains, including measures to ensure that products meet U.S. health and safety requirements. Establish an import czar Recently, a plan to beef up federal safety standards was introduced by Sen. Charles Schumer (D-N.Y.). This included establishing an “import czar” at the U.S. Department of Commerce to oversee import inspections and revamping the Food and Drug Administration, which is being blamed for being largely ineffective when it comes to imported food and pharmaceutical products. Longer term, apparel industry executives are concerned that the furor over imports could lead to even stricter requirements and user fees on importers. Moreover, economic nationalism could create huge problems for U.S. consumers, according to Wal-Mart CEO Lee Scott, whose company imWWW.STORES.ORG 48 STORES / DECEMBER 2007 http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of Stores Magazine - December 2007

STORES - December 2007 Contents Executive Editor's Page President's Page Holiday Shopping Extravagance What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Niche Marketing Eight Predictions for 2008 Concept2Watch Merchandising Strategy Sourcing E-Commerce Supply Chain Warehouse Management Software Contactless Payments Marketing Marketing Online Loeb Retail Letter ARTS Update Point of View NRF News Retail Industry Calendar Last Laugh

Stores Magazine - December 2007

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