That was the word from GAP executive Gary Moore, who manages the multi-billion dollar retailer's product integrity, and other sourcing executives speaking at a "Global Sourcing Perspectives" session at the SPESA Show, held May 18-20 in Atlanta, GA.
Moore said that historically, "being innovative in product development was the way in with GAP," but that oftentimes those innovative developers fell short on production execution. "Those suppliers are no longer suppliers to GAP. Today, if you are not good at all of the baseline requirements, you won't be a supplier to GAP," he said.
Referencing risk management, for example, Moore said that suppliers were quick to talk to GAP about the rising cost of commodities, such as cotton and oil. "Well, we already knew that. What we would turn around and ask is, 'What are you doing to improve, and to save money on electricity and water vs. last year?' At first these kinds of conversations just cut them off at the knees, but now they understand we want to work on these issues together with them."
Facing a challenge to grow the top line, Moore says GAP has gotten much more sophisticated in talking directly to its customers about quality pre- and post-purchase. "Post-purchase performance is what drives customer satisfaction -- as we do more and more post-purchase focus groups we have learned a lot about our product - and our suppliers should understand this too."
Moore also noted that its suppliers must spend more time learning about its business. "Opportunities are gone in a flash. We may have a need on Tuesday and then the window closes, so it doesn't matter how good your solution on Wednesday is."
Keith Burchett, quality control director for JCPenney, said that beyond the standard and stringent baseline requirements, the retailer is looking for fast fashion in "every opportunity we can."
Speaking for VF Corp., which has more than 30 brands, many with a strong lifestyle affiliation, John Strasburger, vice president of Americas sourcing, echoed that more involvement in product development would be key for its suppliers in the future. "We will expect them to come to the table with innovations."
VF currently produces or sources approximately 46 percent of its product in the Western Hemisphere and 54 percent in the Eastern Hemisphere. One-third of its product is made by internal VF facilities, with two-thirds outsourced. Mexico is the No. 1 provider in units, while China is the largest in terms of FOB dollars.
With a growth strategy of increased international sales, such as selling Northface into Brazil, Strasburger said VF will look to local markets for local manufacturing, and as such, is looking at factories in Brazil, for example. This follows its European sales model. Also being considered is whether more of VF's lifestyle brands can be produced in the Western Hemisphere.
Supporting these goals, VF will open a new supply chain office in Panama City, Panama, this fall to encompass sourcing, manufacturing oversight and procurement operations. It is expected to employ 65 people.
Soma Intimates, part of Chico's FAS, has a more unusual sourcing model in that while total corporation revenue is a $1 billion-plus, it has no overseas sourcing offices.
With 114 stores, Soma is adding another 40-plus stores this year, said Doug Tepper, senior director of production and sourcing. With a boutique feel and mentality, where customers need to feel that they must "get it while they can," Soma remains open to new vendors as trends change.
"We are very committed to our vendors and give them every possible opportunity to succeed," said Tepper, adding that Soma seeks to provide its suppliers with as much information as it can to assist in capacity planning and volume projections.
Going forward, Tepper said strong emphasis will be placed on being as close to the raw materials supply base as possible, with raw materials planned and staged accordingly.
Susan S. Nichols is publisher of Apparel and may be reached at [email protected].