Merchandising as Centre of Excellence (CoE)

Have you come across a person in apparel industry, who is forever in ‘crisis manager’ mode. Every issue that occurs during an order cycle cannot be resolved without his involvement in some way or the other. This person is often found running from one department to another, you spot him in fabric department, negotiating with fabric manager on when will he get his strike offs, you spot him in washing floor, comparing  the washed garments to the original standard from buyer, you spot him in trim store, hunting for trims for his urgent samples, you spot him on production floor clarifying the doubt about the button placement as per buyer requirement, you find him in conference calls with the buying agents, you find him doing costing negotiation in buyer meets, you find him in top bosses cabin, giving the case history to justify delivery extension for a PO, you find him on phone ( oh so often ! ) talking to the embroidery guy, the lace dyeing guy, the Chinese zipper supplier, you find him struggling with the newly installed ERP.. oh we all know the lock of pain on his face while he enters the data for the numerous Pos into the damn system !

No guesses for telling me, who this person is?  We are talking here about the ubiquitous, omnipresent individual called the merchandiser in any apparel supply chain set up.  So where else can we look for a creating a differentiating edge in our set ups, if not here?

Just imagine this scenario.  A manufacturing or buying set up, which exudes professionalism with a capital P from the moment you step in. You can feel it in the air, in the well maintained greenery, in the neatly organized work desks, in the samples hanging near workstations with neatly typed tags, in the bulletin boards displaying inspiring stories of achievements of employees, relatively quiet place (?) place, or is that too much to ask.. a contagious  high energy environment,   full of young people passionate about their work, looking forward to come to work every day, total harmony between several departments, communicating seamlessly, a zero error zone of sorts, having customers addicted to its service levels so much so, that they won’t go anywhere even in times of recession, competition or price wars.

I have a dream. Yes, and someday I will live to see this dream come true.  Our apparel industry has already made a huge beginning by giving these youngsters a channel to focus their immense energies. True these 20-30 year olds are not from premier MBAs like IIMs (though that would be my ultimate dream come true scenario when our industry will attract the best and the brightest ! ), but these kids are smart  nevertheless,  trained in the MBA institute of life.

The apparel industry has inherent unique challenges and complexities of working in a tightly time bound, multi styles, truly global set up. I mean where else can you find a scenario like this – Australian long staple cotton travelled 1000s of miles from Australia to Pakistan where its woven into greige fabric, then travels another few 1000 miles to Sri Lanka, where its processed into dyed and finished fabric made to order in different colors, again travels a few 1000 miles to Bangladesh, and simultaneously trims are being travelled back and forth for various rounds of approvals between Hong Kong and USA and finally from Hong Kong to Bangladesh,  to be converted into flat front pants,  then shipped to the US or Europe  to be sold on shop floors, coordinated with a shirt which went through a similar journey, made in Mauritius and a hat using that same shirt’s fabric as trim binding, made in Taiwan, all at the same time, and all made to happen within the time frame allotted to get the jobs done !! Phew!!

I am not sure if many other industries can beat such huge level of complexity!!

So the platform is already available. A highly dynamic field to be in with ever increasing and stringent demands… You cannot find a better place than this to hone and sharpen the skills of the young potential of this country.

And yet, let’s be honest, do you feel the merchandisers have got that ‘elite’ status as yet in our industry, that pride of place which a function like merchandising deserves.  It’s the one thread which ties the enterprise together from beginning to the end. This is the place to begin with when creating a differentiating edge. This function must transform into the Centre of Excellence model which is already prevalent in other professionally run industries.

“Center of excellence” is a concept gaining traction across businesses. A quick survey of companies in any industry will turn up centers of excellence in such areas as IT, finance, human resources, manufacturing, business process, procurement, and, yes, supply chain. Though these centers may go by different names, they basically are hubs for focusing skills and resources on a specific functional area. The general purpose is to identify, develop and disseminate technologies and best practices that make the business work better

Creating a team of people working as centre of excellence, a platform engaged in finding the best practices, in delivering customer centric process improvements , in putting together the expertise from within the organization to deal with complex situations, in brainstorming and generating new ideas of doing business better, to raise the competency level of how we execute the work day in and day out.

Here is an excerpt from an interview I came across of an executive from Procter and Gamble. At P&G, this translates into developing “machine equivalent” ways of managing work, based on processes that deliver “reliable, predictable, repeatable performance, no matter who is doing the work or where in the world it is being done,”

So how can we apply this Centre of Excellence model in our merchandising context? Well it need not be a formal or elaborate structure. We can simply begin by having a group of individuals in a company to form a team of sorts with the objectives outlined above. This could be as simple as an email distribution group!! The purpose will be to share ideas and knowledge for the benefit of the entire organization.  These will be the internal consultants of sorts who will be obliged to freely share the knowledge, resources, information, best practices accessible to one and all in the company.

And the idea is not to copy other industries best practice and ask the question ‘ why can’t we do what they do ?  The key is the learning process itself – that helps develop ideas and practices which are right for your business and your context.  The idea is that of a self motivated peer group, who will brainstorm the ideas on how to conduct every aspect of business better and how those ideas can be put into practice there and then.

This core team or group would be the exalted, respected elites of the organizations who will rise above petty politics or vested interests and enable and lead the change in an organization which will bring in the differentiating edge.  It could well be a group with a cross functional flavor to bring in different streams of competencies into the thinking process at a common platform.  Their job will be to relentlessly pursue the objective of implementing the newer and smarter ways of doing everyday tasks.

I experienced it happening personally during the course of my career. An export house which was primarily a CMT vendor was able to try similar methods and slowly but surely transformed into a preferred supplier partner for a major designer label from U S A  What was the success secret ? A weekly meeting headed by the CEO himself, inviting the cross functional heads and merchandisers at a common table to talk about the issues and find solutions there and then

Another example, where by virtue of a facilitation session that I happened to chair, three different units of the same organization came together for the first time, and when we got talking to each other about common problems, we were able to find solutions and expertise right there and then, proven methods of solving similar problems available within the company, so far kept disparate from each other for the sheer lack of platform which could bring them all together with one overriding objective of finding smarter ways of doing our work.  Why have pockets of skills or ‘expertise silos’ of sorts within the same company? Why not get together and share the knowledge first within the company and then maybe across the entire industry.

Coming back to my contention of making merchandising function as the centre of excellence and hence the differentiating edge, let’s talk about what is expected of this community to rise to the next level of professionalism, an evolution of sorts into the venerable ‘elites’, who could be the deciding factor for whether or not a customer will place business with X company?

Price, on time delivery and quality of merchandise is no longer a differentiating edge. It’s a given which has to be there if a company even wants to exist and survive in the buyer driven highly competitive environment.  Buyers will have thousands of suppliers to chose from, claiming these criteria.

The differentiation will come from the customer experience that you can provide. The sheer feeling or perception that your customer will have of what it’s like to do business with your company.   And this is where the opportunity lies for the merchandising community to make a difference.  After all the customer experiences your organization through the millions of interactions and transactions that occur between you and the customer, right from the R n D inquiry stage to the final shipment. You are the face of the organization, and not only the face, but the middle as well as the tail end of the entire experience that your customer will have of working with your organization.  How you can engage and bind and service the customer will determine the future flow of business?  You can make or break the bottom line indeed.

I would like to suggest three pronged approach, followed by P&G to applying the COE model to merchandising.  First  front to manage is the Mastery. We have to ensure that merchants have the sufficient mastery to do the work. This goes beyond training because it must include means of validating that the necessary knowledge has been acquired and can be applied.

The second front is a governance process.  There cannot be thousand ways of doing a work. There has to be one standardized way of doing things, not just for systems, but a standardized approach to how we think about steps and the sequence of steps to achieve a desired outcome. That’s the only way to make it repeatable and predictable.  How far has our industry achieved this standardization of process and thinking is something worth worrying about.

The third front to manage is innovation.  We have to have an eye towards how you might redesign, retool ore renew that work. A certain baseline of skills might be sufficient now to do the work, but in a year from today, you might have twice the business pressure and will need to complete in four steps a process that now takes eight – and do it with half as many people.

What cannot be measure cannot be controlled. There has to be a process control method in place too. On the mastery front, we need to measure and see who has the competency, at the level required and to identify where someone may need additional skills. Second, thing to measure is process variability. How far were the SOPs followed and how far deviations occurred must be recorded. The third thing to measure is the outcomes. Are we delivering what the business needs to operate ? This is necessary so that we don’t end up creating great business processes that end up on a shelf.
At P&G this concept is applied through HPNs. HPNs are a network of individuals from different P&G businesses who meet virtually every month and physically a couple of times a year. “So we have people accountable for applying this approach as they execute the daily work across each of our businesses and categories and markets,” he says. “We think of it as a living network of people that have that capability and responsibility for validating that our ‘machine’ is operating correctly.”

Success is defined as “getting the work down to a handful of approaches that are necessary for the business issues we face,” says Barr. “This does not mean one way of doing everything. Even, if we get down to three or four ways to produce a desired outcome, we consider that a tremendous accomplishment.”

If we study some of the best companies of the world, it is easy to discern that they are successful because they have very strong SOPs put in place, and are not so heavily people dependent.  It is not like if one merchant is on leave, the entire account’s work goes haywire !

We are talking about a huge paradigm shift here. The merchandising community must rise up and elevate themselves to the new paradigm.  The futuristic view of the role of merchandiser must undergo the following paradigm shift –

From that of a ‘victim’ to that of a ‘mentor’

From that of a ‘mere merchant’ to that of a ‘project manager’ or ‘project owner’

From ‘people’ orientation to ‘process’ orientation

From ‘swatch card’ to ‘job card’

From ‘coordinator’ to ‘customer relationship manager’

From ‘crisis manager’ to an ‘internal consultant, expert, Centre of Excellence’

The merchandising community must elevate themselves to the ‘elites’ of the organization, leading the change and innovation that will become the differentiating edge.  I know it sounds obvious but I cannot think of a better quote to end this discussion, than Mahatma Gandhi’s ‘Be the change you want to see.’ You alone are responsible for YOU. So if you won’t take the necessary actions, then who will ? If not now, then when ?

Anjuli Gopalakrishna.