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RVCF New Member Spotlight

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016



RVCF is a member-based organization focused on promoting best practices, trading partner alignment and collaboration, and technology solutions to streamline operations, lower costs and speed goods to market throughout the retail value chain. RVCF welcomes new member ERA/Alliance Hanger.




ERA/Alliance Hanger

ERA/Alliance Hanger is an international hanger manufacturer for both the retail and wholesale sectors and has been in business for the last 35 years.

We have manufacturing facilities in Canada, Mexico, Asia and coming in 2016 Central America, enabling Alliance Hanger to service the needs of our global customers, combining proficiencies in manufacturing, technology, engineering and research & development. With DC's across North America to better serve our customers, we are there to fulfill your needs.

The Hanger Recycling Program has given our customers the opportunity to find sustainable use for "end of life" products and our closed loop strategy continues to provide eco-solutions through re-used, sorted and recycled hangers.



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Tags:  ERA/Alliance Hanger 

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Holiday 2015 Highlights Weak Points in Omni-channel Strategy

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016

by Carol Weidner, eZCom Software


Every holiday shopping season has its upsides as well as its lessons to learn. Holiday 2015 signaled an uptick in overall spending and consumer demand.1 However, digital shelves did not always meet that demand: this year, online out-of-stocks saw a ten to fifteen percent increase over 2014.2

Unforeseen demand can explain part of this shortfall – especially for hot items in the toy category. But industry experts point to a more overarching issue – the majority of retailers have not yet fully aligned inventory management with omni-channel imperatives.3 Backend dramatically affects brand engagement – perfectly executed social and e-mail campaigns have little impact if consumers can't get what they want when they want it.

New Habits, Big Expectations
Technology has brought a myriad of new choices and possibilities to retail while raising consumer expectations concerning convenience and shopping options. More and more, consumers utilize multiple channels to complete each purchase, such as click and collect (buy online and pick up in store) and endless aisle (purchase in store and ship to home from another store, drop ship location or DC). This trend of combined channel shopping heavily characterized holiday 2015 and raises the bar significantly for retailers (as well as their distribution and supplier partners).4 It requires extremely agile fulfillment capabilities, highly visible inventory, and significant integration of all fulfillment points as well as the applications that support them.

Although most retailers now recognize such seamless and integrated fulfillment capabilities as the ideal, not all have completed implementation.5 Many established retailers have significant investment in legacy systems and still have portions of inventory and fulfillment managed through siloed applications. Many are in pilot stages of the item-level RFID tagging that provides heightened inventory visibility and helps stores more efficiently function as fulfillment centers. And the industry as a whole currently struggles to configure the balance between push and pull fulfillment models that the new buying patterns require – a gold ring that will likely remain in constant motion as technology evolves. (Ironically, startup retailers that may have had problems competing with more established rivals often have an edge in this new environment – they can start fresh with flexible cloud-based backend systems, respond more quickly to consumer trends and technological innovations, and disrupt with new channels and business models.)

Seamless facilitation of omni-channel fulfillment delivers a win-win for both consumers and retailers. For example, in recent surveys holiday shoppers have expressed a preference to purchase items online and to pick up in store, as this option relieves anxiety concerning holiday shipping issues and saves searching and standing in lines at store locations. Once consumers are in store, however, most click and collect shoppers tend to purchase additional unplanned items – to the tune of 40% this past holiday. Likewise, well executed "save the sale" and endless aisle options protect shoppers from the hassle of calling and/or driving to multiple store locations to track down out-of-stock items. Such transactions afford retailers the obvious upside of, quite literally, saved sales.6

Chasing the Omni-channel Ideal: Making the Dream a Reality
Specific tactics can facilitate retailers' exchange of linear distribution models for a "buy anything, anywhere, anytime" distribution web. These include:

Enable stores to borrow best practices from the DC's playbook and vice versa. If omni-channel fulfillment ideally allows customers to order anything with quick turnaround from any channel, each channel must borrow from the others' strengths.3 Stores with capriciously organized back rooms and semi-accurate inventory will benefit from warehouse-tested tools that heighten visibility and enable streamlined and accurate in-store picking and shipping, such as item level RFID tagging, use of RF guns, voice-directed fulfillment, and even integrated "lite" versions of the DC's WMS system. Similarly, retailer and supplier partner distribution centers, with large order legacies, need tactics to efficiently process smaller and more complex orders shipping direct to customers as well as to stores. An example includes picking single line e-commerce or click and collect orders bound for stores to tote containers with clear labeling, thereby scaling up small orders to the size of typical store replenishment orders.

Keep inventory close, but not that close. Industry experts have suggested "hub stores" as at least a partial solution for relieving omni-channel pressures, such as store replenishment and direct (from store) to consumer fulfillment – from stores, DC's and even supplier partners.3 A hub store would hold defined quantities of the great majority of SKU's in the inventory, and be close enough to a supported group of stores to send out daily replenishment and/or click and collect orders, acting essentially as their "enhanced back room" to pivot in response to sales developments without overwhelming actual back rooms with unmanageable and impractical amounts of inventory.

Simultaneously serve the experience of the in-store, online and mobile customer (as well as every iteration in between). Omni-channel fulfillment requires close coordination between stores, retailers' DC's/warehouses, and supplier partners' warehouses on many levels--including seamless real time visibility of all channel inventory. What's happening online and in-store, both on the floor and in the back room, must be up to the minute, centrally recorded, and accessible to all. Success depends on accurate, scalable and agile integration of software solutions that facilitate this close coordination (such as the aforementioned "WMS lite") – and transition from siloed applications. Solutions exist to track the pace of business on each platform, continuously update stock numbers, send reordering notifications, submit requests to vendors and foster price changes in real time.7

Coordinate more closely with suppliers. Closer connection, or even integration, with suppliers' inventory and order management systems offers considerable omni-channel advantage. Tighter coordination supports seamless and successful direct to consumer fulfillment (drop shipping) – key to omni-channel success. Drop shipping gives retailers the ability to offer a larger array of merchandise to consumers (without the costs and risks of warehousing), giving traditional retailers a toe-hold against e-tailers in terms of selection. It can facilitate cheaper and often faster shipping to the consumer as the fulfillment channel eliminates financial and time costs associated with receiving and distribution. This logistical savings additionally allows retailers to compete on price and still preserve margins – further giving them ability to fulfill the "anything, anywhere" expectations of today's consumers.

Additionally, increased transparency with suppliers can bolster successful just-in-time inventory management. These automated and efficient inventory replenishment systems strike balance between glut and stock outs, saving costs on inventory overages while ensuring in-demand products stay available for purchase, where and when needed. Through integration with suppliers' order management systems, retailers can initiate rapid, strategic response to low stock levels.8 Although such syncing of systems requires an initial buildup of technology infrastructure, the investment can pay high returns in terms of omni-channel efficiency, cost savings, and customer satisfaction.

Continually up the IT ante. In omni-channel retail, IT forms the backbone of the customer experience. Accordingly, it warrants significant investment. Tech departments can no longer focus solely on automating daily back end tasks of the enterprise, they must find ways to innovate and disrupt. As a recent Retailing Today article put it, "Every retailer must actively leverage technology to innovate new ways of engaging and delighting the customer, and then converting and executing sales as efficiently as possible."9

Omni-channel also necessitates IT departments to create and maintain flexible, scalable, and robust infrastructure. Customer and sales data volume has risen dramatically with the rise and ubiquitous use of multiple shopping channels and the support of in-store and online digital shopping "experiences." Inventory across all channels must ideally be managed centrally and visibly. IT departments must align the back end across shopping channels, execute integrations and break down silos.

Prioritize. In shooting for the omni-channel ideal, each organization should define its own contemporary real. Although omni-channel fulfillment dictates a global and dramatic change in inventory management and fulfillment, individual paths to success will vary in accordance with priorities, strengths, budgets, and challenges. Set long and short term goals and tactics in accordance with your organization's unique environment to pace for eventual success.

[1] https://nrf.com/media/press-releases/retailers-very-digital-holiday-season-according-nrf-survey
[2] https://www.washingtonpost.com/news/business/wp/2015/12/22/youre-not-imagining-it-a-lot-of-coveted-gifts-are-out-of-stock-online/
[3] http://www.mmh.com/article/retail_whats_in_store_for_e_commerce_operations
[4] http://www.retaildive.com/news/why-digital-dominates-the-retail-sales-story-this-holiday-season/407936/
[5] http://www.retailingtoday.com/article/what-fashion-retailers-need-know-stay-competitive
[6] http://www.retailingtoday.com/article/four-best-practices-make-holiday-season-bright--convenience
[7] http://www.retailingtoday.com/article/five-mistakes-retailers-will-make-holiday-shopping-season
[8] http://smallbusiness.chron.com/advantages-disadvantages-justintime-inventory-21407.html
[9] http://www.retailingtoday.com/article/three-new-years-resolutions-retail-it


Carol Weidner, CEO of eZCom Software, is living proof of the adage "If you want something done right, ask a busy person." Soon after graduating from Rutgers University with a degree in Mathematics, she opened her own successful business – wholesaling home wares and accessories in the New York/New Jersey area. Carol continued in her entrepreneurial endeavors while she returned to Rutgers full time and completed a second degree in Biology. Following her (second) graduation, Carol learned computer programming and focused on EDI – working for companies serving the retail industry and consulting for major retailers like Toys "R" Us. When an opportunity arose to take over a small many-to-many retail portal in 2000, Carol grabbed the reins. She directed the finance and sales side of the burgeoning company, while working together with a team of colleagues who redesigned one of its key products to serve as a web-based EDI application. The result was the B2B supply chain software provider eZCom Software – and the cloud-based EDI solution, Lingo. Carol can be reached at cweidner@ezcomsoftware.com or 201-731-1800. Learn more about eZCom Software at www.eZComsoftware.com.

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Tags:  Holiday 2015  Omni-Channel 

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RVCF Calendar of Events Update

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016

by RVCF


The RVCF team works year round to create events that provide consistent value to our attendees, speakers and sponsors. Throughout our site selection process, we strive to find venues offering the best possible combination of availability, accessibility, overall quality of service and of course affordability – no small task!

Our 2016 calendar of events was recently announced and, for the first time, we have included "Save the Dates" for the next two years' Fall Conferences.

RVCF Annual Spring 2016 Conference:
Sanibel Harbour Marriott Resort & Spa
17260 Harbour Pointe Drive
Fort Myers, Florida 33908
Sunday, April 17th to
Wednesday, April 20th
Managing Retail Deductions Workshop:
Charlotte, North Carolina 28209
Thursday, September 22nd
RVCF Annual Fall 2016 Conference:
JW Marriott Scottsdale Camelback
Inn Resort & Spa

5402 East Lincoln Dr.
Scottsdale, Arizona 85253
Sunday, November 6th to
Wednesday, November 9th
           
RVCF Annual Fall 2017 Conference:
5350 E Marriott Dr.
Phoenix, AZ 85054
Sunday, November 5th to
Wednesday, November 8th
RVCF Annual Fall 2018 Conference:
1 Market Place
San Diego, California 92101
Sunday, October 14th to
Wednesday, October 17th

That's right, we now have our contracts in place for Fall 2017 and 2018!

 

When we asked the attendees at the 2015 Fall Conference to give us their preference for a location to host our 2017 Annual Fall Conference, the responses were largely in favor of San Diego with Phoenix/Scottsdale a close second.

Following an exhaustive search for availability at both locations, we identified one (1) venue in each city that met most of our requirements for 2017. In a follow up survey to our 2015 Fall Conference attendees, we learned more about their preferences and returned to our search, ultimately determining that our San Diego location did not meet our needs for 2017 but was a good fit for 2018; so we have scheduled as follows:

Here is a look "behind the scenes" at how the process takes place.

  • We start early: Each year we find that we need to commit to our venues farther and farther in advance in order to book our preferred days and dates. Two years out is not uncommon and even then, availability can be limited.
  • Factors that we consider:
    • Dates – We are mindful of holidays, industry events and peak shipping times.
    • Conference pattern – We understand from our participants that Sunday through Wednesday works best to minimize time out of the office.
    • Availability of hotel rooms – We prefer to accommodate all guests on-site without the need for "overflow" properties.
    • Size and configuration of meeting rooms – Attendance has grown steadily over the years, as has the diversity of the topics that we cover. Our ideal location must be able to accommodate our group comfortably for general sessions yet offer the flexibility of transforming to smaller spaces for concurrent breakout sessions.
    • Ease of travel – We look for geographic locations that offer frequent, convenient and reasonably priced flight options.
    • Price – We understand that budgets are tight and negotiate the best possible rates in order to keep our prices consistent year after year.

Your voice matters. If you are a conference attendee, please provide us with your feedback regarding your overall conference experience. We review these evaluations carefully and consider your input when making our decisions. If you have never attended an RVCF event or have not done so regularly, we hope that you will consider participating with us in 2016.

On behalf of the entire RVCF Team, we welcome the opportunity to speak with you about our upcoming events and your future participation. Please contact Susan Haupt at shaupt@rvcf.com for more information.


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Tags:  RVCF Events 

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California SB 633 May Be a Belated Holiday Gift for U.S. Companies, But Using Unqualified "Made in the USA" Labels Still Poses Risks

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016

by Melissa Proctor, Polsinelli, P.C.


The State of California bestowed a belated holiday gift on U.S. manufacturers, importers, retailers and distributors effective as of January 1, 2016. Under SB 633, which amends Section 17533.7 of the California Business and Professions Code, goods sold in California may now be labeled "Made in the USA" if: (1) the finished product is manufactured in the United States; and, (2) any foreign materials or parts contained in the finished product do not exceed 5% of the final wholesale value of the merchandise. If the manufacturer can show that it cannot obtain the materials or parts in the United States from domestic suppliers, then the total foreign content cannot exceed 10% of the final wholesale value of the item. SB 633 effectively replaces the previous, more restrictive requirements of Section 17533.7 that put California law squarely at odds with the Federal Trade Commission's "Made in the USA" rules. Without intending to rain on anyone's parade, though, it should be noted that the FTC and California rules are still not identical. It is likely that some products bearing "Made in the USA" labels may pass the FTC test while failing the California standard. Therefore, companies are urged to exercise caution and reflect carefully before proceeding with unqualified "Made in the USA" claims for products sold in the state of California.

By way of background, the Federal Trade Commission ("FTC"), which exercises jurisdiction at the federal level over all products that are advertised or sold in the United States, permits a good to be labeled "Made in the USA" if it is all or virtually all made in the United States. The phrase "all or virtually all" means that the significant parts of the product and its processing must be of U.S. origin and that the end item should contain either zero amounts or merely negligible amounts of foreign content.

In contrast, Section 17533.7 of the California Business and Professions Code imposed the following restriction on companies selling merchandise in the state of California:

It is unlawful for any person, firm, corporation or association to sell or offer for sale in this State any merchandise on which merchandise or on its container there appears the words "Made in U.S.A." "Made in America," "U.S.A.," or similar words when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.

This rule was far more stringent than the FTC standard and meant that even the smallest foreign part or component contained in a product that was manufactured in the US, and marketed and sold in California, could disqualify the finished good from being marked "Made in the USA." Thus, goods that fully satisfied the FTC's "Made in the USA" requirements failed the California standard, resulting in great frustration and agitation on the part of companies that marketed their products nationwide. Section 17533.7 also ushered in a flood of class action lawsuits against companies that had made "Made in USA" claims resulting in costly settlements. For example:

  • In Paz v. AG Adriano Goldschmieid, Inc. et al, Nordstrom and AG Adriano Goldschmied were alleged to have violated California law by placing "Made in the USA" labels on denim jeans that contained imported fabrics, components and trim items. The garments were manufactured in the United States and fully complied with the FTC's "Made in the USA" rules. A similar class action was also filed against jeans retailer Citizens of Humanity and several California jeans companies also received notices of pending litigation threatening to bring additional class action lawsuits.
  • In Colgan v. Leatherman, certain tools were alleged to have been illegally labeled "Made in the USA" because some of the processing operations (i.e., grinding and polishing of the parts and components) were performed outside the United States. Even though the design work, testing, assembly and other manufacturing processes were performed in the United States, the court still held that the foreign processing was "substantial" and therefore the "Made in the USA" label violated California's Section 17533.7.
  • In Benson v. Kwikset, certain deadbolt and locksets were alleged to have violated the California "Made in the USA" rules because they contained screws and other parts that were manufactured in Taiwan and some of the sub-assembly operations were performed in Mexico. Even though the labor and parts used in the locksets were US-origin, the court still concluded that the labeling violated Section 17533.7 because the locksets contained parts that were substantially made outside the United States.

The changes made by SB 633 were, of course, warmly received by companies tasked with finding ways to comply with both the FTC and California "Made in the USA" rules. However, both rules are still not mirror images of one another. For example, the California rule contains specific de minimis percentages for foreign origin inputs, while the FTC rule provides a more subjective all or virtually all standard for unqualified claims. In addition, the SB 633 fails to define the term "wholesale value" and does not provide any guidance as to how the de minimis thresholds should be calculated. Thus, differing outcomes as to whether a product complies with both rules are still possible.

So, even though companies doing business in the state of California rang in the New Year with favorable news on the "Made in USA" front, they should still consider carefully whether it is wise to proceed with an unqualified "Made in the USA" claim or alternatively use a safer, more conservative qualified claim, such as "Made in the USA of U.S. and imported parts."


Melissa Proctor is a Shareholder with Polsinelli, P.C. With significant experience in the customs laws and regulations, export controls, economic sanctions, and international trade, Melissa is committed to understanding companies' operations and providing assistance geared toward helping them reach their specific business and operational goals. She may be reached at (602) 650-2002 or via e-mail at mproctor@polsinelli.com.

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Tags:  Made in the USA  Product Labeling 

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3 Key Components to Successful Supplier Onboarding, Part 1

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016

by RVCF


Every month, we at Retail Value Chain Federation (RVCF) host our retailer-only open forum conference calls in which retailers can collaborate and share ideas for solving compliance issues. And every month without fail, a question is asked about supplier onboarding because every retailer understands that many compliance issues wouldn't exist if the retailer had done a better job of onboarding.

Major retailers are already working with most of the major brands. If retailers only had to onboard large suppliers a few times per year, it would be a relatively easy job. However, most onboarding involves suppliers that are either small or still in their infancy, trying to figure out how to manage their own growth.

These suppliers haven't yet made the investments in people, processes and systems. In most cases, they've only worked with a handful of smaller retailers that don't have nearly as many requirements as major retailers. Without a comprehensive, collaborative onboarding process, a rocky road filled with chargebacks, disputes and unhappy customers typically lies ahead.

Effective supplier onboarding is essential, not only because it helps to reduce compliance issues, but because it sets the tone for a smooth retailer-supplier relationship. The relationship will be much more amicable and profitable if retailers make the necessary internal preparations and take an active interest in collaborating with suppliers and setting them up to succeed. Similarly, suppliers must be responsive to the needs of the retailer and do everything possible to meet retailer requirements.

RVCF, in collaboration with our retailer membership, has identified three key components of successful supplier onboarding. Because onboarding is such a critical process and a regular topic of discussion in our monthly conference calls, we wanted to dig deeper into each of these areas in a three-part series of articles.

In this article, we'll focus on step one – a thorough setup process within the retail organization.
First, the retailer needs to have someone take ownership of the process, which can vary somewhat from retailer to retailer depending on their systems and processes. This point person will bring together key personnel and get internal alignment with regards to what exactly needs to be done to begin the onboarding process with the supplier. This involves creating a checklist that lays out what information needs to be collected, how this information should be collected, and who should be responsible for collecting various pieces of information.

Once information has been collected, create a single database that houses all of the information for the various departments involved in the onboarding process. For example, the merchants need information from the supplier so the buying organization can move forward with setting up orders according to agreed-upon terms and conditions. Accounting needs to know these terms and conditions and ensure that the supplier is paid according to those terms. Buyers, accounting and the supplier need to be in lockstep with payment terms, chargebacks, discounts and other financial issues.

The inventory team needs to be clear about what the retailer will be buying from the supplier, how much, and how frequently. Will the retailer be buying from one location or multiple distribution centers? This is also relevant to the supply chain folks, who will have oversight into the routing and logistics behind the movement of inventory from the supplier. Will merchandise be coming from an overseas distribution center? Will it be shipped to a distribution center or directly to stores?

It is the responsibility of vendor relations (or vendor compliance) to manage the gathering of information, maintain the database, and keep everyone on task and on time. For some retailers, vendor relations exists within the supply chain group or the merchant group. Once the retailer knows what needs to be done and how to do it, and all of this knowledge and data has been collected, vendor relations begins the second component of successful supplier onboarding – the education of the supplier and the validation of supplier capabilities.

We'll discuss this in detail in next month's issue of the RVCF Link newsletter. In the meantime, we encourage you to participate in our retailer open forum conference calls and discuss onboarding problems and solutions. Continue the conversation on the RVCF forum boards. Tell us what you want us to cover in upcoming webinars and at RVCF conferences. Most importantly, start having internal conversations about what steps your retail organization can take to prevent compliance issues by improving its onboarding process.


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Tags:  Onboarding 

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Quality in RFID

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016

by Danika Manchester, FineLine Technologies


Everyone knows the importance of quality in price ticketing. Merchandise that is not ticketed correctly cannot be processed efficiently through the supply chain, including potential delays and lost sales at POS. Quality issues are generally visible – the style description, size, or color do not match the merchandise, the price is not correct, or the barcode is not large enough or printed with enough quality to scan. Because these types of errors can be visually monitored, issues with the barcoded price ticket can be addressed early in the supply chain where errors are more cost effective to correct, either at the factory or distribution center. Even if the issue is not found until it hits the store floor, a replacement ticket can be printed onsite prior to sale.

Many retailers are now realizing the benefits of RFID. Retailers are expanding past pilot programs by adding merchandise categories, stores, and retail divisions to increase their sales by improving their inventory accuracy and subsequently the replenishment of merchandise to their store shelves. Software providers have designed solutions not only for inventory management but to improve customer satisfaction by providing seamless shopping journeys across multiple sales channels and data analytics of shopper and merchandise movement within stores. Retailers are investing a significant amount of money into these solutions, dependent in part on RFID technology, and that RFID technology is dependent on merchandise being correctly tagged with RFID inlays.

The inclusion of RFID inlays adds not only cost but also complexity to the ticketing process. The EPC number must be unique, correctly encoded onto the RFID inlay, and match the printed data. Brands that have sourced tickets from multiple service bureaus and also printed within their factories will need to determine a process to ensure that merchandise that requires RFID technology is correctly tagged with unique EPC regardless of the source of the ticket. MCS compliant systems ensure unique numbers by utilizing the self-contained, factory programmed and permanently locked unique serial number embedded within the Tag Identifier (TID) memory of each IC.

RFID ticketing complexity extends into the quality assurance of the ticket as well. Typical quality issues include bad tags, EPC-UPC mismatch, using an inlay not approved by the Retailer or not approved for the specific product category, duplicate EPC numbering, and interference with metal either on the brand tag or on the merchandise itself.

Because the EPC encoded cannot be visually checked, additional equipment is required – a UHF RFID reader – which can be purchased as an add-on to smart phones or tablets. These devices generally only display the number encoded and connections to database or online solutions must be set up in order to check that the EPC is correct, unique, and round rock licensed.

With RFID, the price ticket is leveraged for multiple solutions at the retailer – inventory control, movement analysis, cross selling, omni-channel support, etc. – so quality assurance is more important than ever. A brand's transition to providing RFID ticketed merchandise must include the review and update of ticketing quality assurance programs to prevent chargebacks as well as the costly reprinting of tickets or reticketing of merchandise. Quality Assurance procedures should include tag read, quality print, match of printed UPC and encoded EPC, and confirmation that the included inlay is approved by the retailer for the product category in question.


Danika Manchester is the RFID Product Manager for FineLine Technologies. She has worked in retail barcode and RFID price ticketing for 15 years managing product design, production, operations, special projects, and business development. FineLine Technologies provides barcode and RFID ticketing solutions for retailers, vendors, and manufacturers. Their customary speed, service, and innovation are unparalleled. RFID solutions include As You Like It branded integrated tags and QCTrak™, the mobile RFID quality assurance solution. For more information about FineLine, please visit www.finelinetech.com or contact them at 800-500-8687 or support@finelinetech.com.

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Tags:  RFID 

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Using Technology to Increase Your Bottom Line

Posted By Administration, Thursday, January 14, 2016
Updated: Wednesday, January 13, 2016

by Alison Falco, Dynamic Systems Inc.


Too often small to mid-sized businesses will implement technology in the "back office" but overlook efficiencies that can generate cash flow and reduce costs on the job. The net income of the top construction and cleaning businesses in the US is as much as 25% higher than the rest and the major contributor to this difference is their use of technology. Accurate information that provides a business owner the ability to make immediate decisions about his/her operation resulting in a boost to profitability is crucial, especially in tight economic times. If revenue is down and the market mood does not permit price increases, then profitability can only be realized by reducing costs. So you must ask yourself, "What prevents me from 100% efficiency?"

Focus on "Faster and Better"
Every asset, machine, tool and person you have must be accountable and cycle more quickly. An airline cannot survive when planes are not in the air producing revenue. Your business cannot survive unless you know where your assets are and how they can be used efficiently. Imagine being able to view where your tools and equipment are at any moment so that you can plan to transfer them to the next job. What happens when your employees get to a job site and don't have the inventory or tools they need to complete the job? These situations and others cause accelerated costs and reduced productivity.

Take a Proactive Approach
Under normal circumstances a business owner will review financial (accounting) information, overhead and direct operating margin at the end of a month or quarter. But economic realities today aren't "normal" circumstances. "Business owners must plan their destiny and not look in the rearview mirror!" stated Bill Allen of W.A. Allen Consulting. "Instead of flying blind until the next financial statement is released, it's time to operate from a plan. Understand what prevents you from 100% efficiency."

Buy-in Happens from the Top-Down
Start by developing a culture that compels events to conform to your plan. Anything that deviates from the plan is an opportunity for cost savings and efficiencies. Do you have too much time lost in non-direct labor areas (idle or down time)? By evaluating what interrupts the workflow on a daily basis, you will uncover areas that, with improvement, will provide an increased bottom line. It is up to the business owner to make a conscious decision to manage from a plan rather than react to circumstances, and to hold all employees accountable for following the plan. This transition will be easier if the technology tools available today are adopted. What technology can provide you the most reward? Evaluate your operations to determine where your technology dollars are best spent.

Reduced Down Time
Can you reduce or minimize the time spent looking for machines, tools and other assets or plan maintenance and calibration to avoid machine down time? A tracking system using barcode will show where your assets are at the time they are needed – who took them last or which job site they were checked out to. An integrated maintenance scheduler will flag required maintenance as it is due and assure OSHA compliance.

Do You Make Shrinkage Unacceptable?
Proper control of tools and consumables prevents costs that result from hoarding, irresponsibility or downright theft. It is up to the business owner or manager to declare that shrinkage is unacceptable and to hold employees accountable for losses that are under their control. This policy is given "teeth" when you can effectively track your assets using technology.

Can You Identify Bottlenecks on the Job – Something that Slows Down Productivity?
Although you may not be aware of the bottlenecks on your jobs this is probably the single most important variable. What are your capacities for output and what is the optimal load of people and tools to meet 100% capacity? How do you route the work to prevent idle or down time? A computerized system that tracks labor hours to a specific function within the job and on the fly will help prevent these costly issues by identifying those points where workflow gets interrupted.

Does Your Staff Spend Unproductive Minutes (or Hours) Manually Recording Transactions?
Manpower that goes into manual recording and recordkeeping does nothing to increase revenue or control costs. Technology can provide the integrated systems control over asset use, capacity, maintenance, location – and do it 24x7.

You don't have to be one of the "big guys" to afford technology. Today, systems are available for a reasonable price that can help avoid many of the costs consumed by inefficiencies in operations and can be purchased as stand-alone systems focused on one aspect of the business. The decision where to start depends on what areas you find are losing you the most money.

Time and Attendance
A time and attendance software package will tell you who is working when on what job for how long, and produce reports for payroll. It can be set to automatically account for start and end times, breaks, lunch, etc. to reduce the time your employees spend recording their time.

Job Costing
Job costing software adds the ability to track inventory costs plus the labor hours consumed against the job while the job is in progress.

Inventory Control
An inventory control software package will account for your stock parts and consumables and tell you when you need to reorder. It can issue items to a work order or job and confirm that the correct items have been put on the truck. Barcoded inventory makes it quick and easy to take an inventory count.

Barcode
Barcode technology has been actively used for over twenty years in manufacturing, distribution and retail to track inventory and jobs. This technology is now available to any business that employs employees and consumes inventory. The barcode terminals are similar to PDA's and provide immediate and accurate information. There are barcode labels designed for harsh environments that are durable enough to withstand dirt, grease and rough use.

Making the job of your employees easier by assuring that they have what they need to perform at their best reduces stress. Showing them that you are taking steps to increase the profitability of each job will provide them more confidence in the company.

While technology won't cure the credit crunch business owners are facing, automated processes that improve cash flow and keep lenders in the loop, demonstrating that the business "has its act together" can go a long way in convincing lenders that their risk is low.


Alison Falco is the founder of Dynamic Systems Inc., a company that has been installing barcode systems since the early 1980's. Alison is considered an expert in the field of data collection and process automation. She is a Phi Beta Kappa graduate of St. Lawrence University in Canton, NY. www.abarcode.com

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Tags:  Human Capital  Technology 

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From the Desk of Kim Zablocky: 2016 Is Already Shaping Up to Be an Exciting Year for RVCF

Posted By Administration, Thursday, December 10, 2015
Updated: Wednesday, December 9, 2015

It's hard to believe, but 2015 – RVCF's 15th year – is winding down. In 2015, RVCF continued its mission to drive collaboration among retailers and suppliers. In fact, we conducted our own independent studies to dig deeper into the state of collaboration from both the retailer perspective and the supplier perspective. We found that there is universal agreement that greater communication is the most important factor in solving industry problems, but both sides need to step up their commitments and investments to make collaboration possible and realize the benefits.

While greater collaboration to elevate the industry as a whole is always the overarching goal, RVCF will be working on a number of specific initiatives in 2016 to bring retailers and suppliers together and provide the data they need to improve supply chain operations and grow profits.

One area of focus in 2016 will be better planning and forecasting, better data synchronization, and closer data share. I discussed this in last month's RVCF Link newsletter, pointing out that a lack of planning often leads to inaccurate forecasts, low fill rates and poor replenishment performance. RVCF will be exploring ways to facilitate better communication, more defined processes, and increased data sharing to make planning and forecasting more effective.

This isn't your father's supply chain. Suppliers need to be at the top of their game when it comes to meeting retailer requirements. Retailers need to deliver more meaningful data beyond point-of-sale numbers and bring greater alignment to the order fulfillment process. There needs to be a more accurate account of what products and data are flowing back and forth. There needs to be improved standardization and more widespread adoption of those standards for product flow. That's why our relationship with GS1 US is so important. GS1 US is doing important work to develop and increase adoption of standards for product flow.

The Trading Partners Interface of the Future initiative will continue in 2016 as we explore ways to automate processes for integrating, updating and sharing data through a single interface. Phase two will focus on the areas of predictive analytics, point-of-sale data share, replenishment optimization, and supplier scorecarding. Expect a white paper about the evolution of the Trading Partner Interface of the Future in early 2016. On a related note, we'll delve into best-in-class portals that capture sales, financial, operational and inventory data. Having end-to-end, real time visibility into complete, accurate data is essential to omni-channel success.

RVCF is working with researchers from the University of Arkansas and Arizona State University to develop a financial model that retailers and suppliers can use to manage their drop-shipping operations for omni-channel and multi-channel. Areas covered in the study include, but are not limited to, the most important drop-ship issues as well as how decisions are made about product assortment, carton sizes, inventory segregation, management of exceptions when inventory is unavailable, and the management of returns. The study will be completed in 2016 and presented in November. The face of retail is evolving quickly. Black Friday and Cyber Monday (add link to other article) provided a much needed wakeup call about consumer behavior and shopping habits. Lifestyles are changing. People like leisure time. They like the freedom to work and shop whenever and wherever they choose. For example, many women would rather buy $50 sneakers and work from home than buy $250 designer shoes and commute to a corporate office. People are holding onto their cars longer. People are always online and investing heavily in mobile devices and connectivity.

Trading partner collaboration is essential to keep up with the pace of change in the retail industry. RVCF will continue to facilitate this collaboration in 2016 via live events, conference calls, webinars, research studies, forum boards and other means. Of course, we need to hear from you. What areas do you feel need more attention in 2016? What are your ideas for building more collaborative relationships? Please contact me directly at kzablocky@rvcf.com to share your thoughts.

I wish you and your family the happiest of holidays and all the best in the new year!

Kim
kzablocky@rvcf.com
(646) 442-3473

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Tags:  2016 

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Did You Get the Black Friday and Cyber Monday Message from Consumers?

Posted By Administration, Thursday, December 10, 2015
Updated: Wednesday, December 9, 2015

by RVCF


Another Black Friday and Cyber Monday have come and gone, and both the sales figures and consumer behavior data should serve as a wake-up call for the retail industry. Let's dive into some of the numbers.

Online spending on Cyber Monday 2015 couldn't maintain the torrid pace established over the weekend when sales increased 26 percent on Saturday and Sunday compared to 2014. But Cyber Monday sales were still up 18 percent, according to IBM. Data from Adobe Systems Inc. shows that total Cyber Monday sales exceeded $3 billion, with nearly $800 million coming from mobile devices.

A National Retail Federation survey found that more than 103 million people shopped online over the course of the weekend. Fewer than 102 million shopped in brick-and-mortar stores. A report from ShopperTrak shows that in-store sales dropped 10.4 percent.

Of course, not all retailers were prepared for such an enormous spike in online traffic, which doubled previous traffic records in some cases. The websites of a number of major retailers went down briefly and many customers were forced to deal with an abnormally slow checkout process. According to Adobe, out-of-stocks doubled their normal rate, with 13 of 100 product views showing an "out-of-stock" notification.

15 percent of online purchases were made using smartphones, and 12.4 percent were made on tablets, according to the NRF. IBM found that purchases made on smartphones increased 75 percent and surpassed online spending on tablets for the first time.

Nearly eight in 10 shoppers use their mobile devices when shopping brick-and-mortar retail stores, according to survey from Deloitte and Statista. 55 percent compare prices and 45 percent research products and find coupons.

A survey from the International Council of Shopping Centers tells us that shoppers are doing their research before they go to the mall so they can get in and out as quickly as possible. On Black Friday, shoppers visited an average of 3.3 stores and made a purchase at an average of 2.8 stores. Consumers know what they want before they get to the store.

However, a very small percentage of sales is coming from social media. Facebook, Instagram, Pinterest, Twitter and other social platforms drove only 1.7 percent of Black Friday sales. On the other hand, traditional e-mail promotions continue to deliver ROI and drove 25 percent of online orders on Black Friday.

There are few important takeaways from this data. We've reached a tipping point with online vs. in-store shopping. Most experts predicted a rise in online and mobile sales, but nobody predicted such a dramatic increase. Retail industry stakeholders need to pay attention to the messages sent by consumers over the holiday weekend.

First, the majority of consumers now prefer to shop online. Second, when they do go to the store, they want to spend less time there. Third, consumers are no longer just comparing prices with their mobile devices. They're buying with their mobile devices.

These trends shouldn't shock anyone. The folks who have been taking their time in developing and improving their omni-channel strategy and beefing up their online and mobile offerings are at serious risk of being left behind. The folks who continue to cling to an unsustainable model for the physical retail store risk becoming obsolete.

Retailers, suppliers and service providers need to collaborate and figure out how to capitalize on online and mobile shopping and adapt the brick-and-mortar shopping model. That's where RVCF comes into the picture. We want to bring industry stakeholders together to answer some key questions.

How do we solve the out-of-stock problem on the busiest shopping days of the year?

How do we solve the issues that contribute to a negative online shopping experience during this time?

What strategies for improving online and mobile sales need to be cultivated? Why isn't social media driving more sales?

How can the in-store shopping model be changed? Should retailers that don't compete with each other join forces? Should the mall become a giant open space with different kiosks for different brands and stores? What is the best way to reduce store footprints and make better use of in-store real estate?

We need to hear from you. What did you do well during the holiday weekend and what weaknesses were exposed? What are your ideas for building on strengths and correcting weaknesses? What more do you need from trading partners and service providers? Visit the RVCF forum boards and share your thoughts, ideas and concerns about taking advantage of online and mobile shopping and improving the in-store model.


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Tags:  Black Friday  Cyber Monday  e-commerce  Holiday 2015  Omni-Channel 

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Yusen, We Have a Problem!: GMO Labels vs. USA Exports

Posted By Administration, Thursday, December 10, 2015
Updated: Wednesday, December 9, 2015

by Kirk White, Yusen Logistics (Americas) Inc.


Kurt Vonnegut wrote in his epic masterpiece, Galapagos, that the biggest evolutionary defect in humans is their oversized brains. Just think about how many countries are in dire straits right now because the popular "opinion" on the value of their currency has gone down. Think about the stock market. The truth here is that public opinion has an effect on business, prices, and commerce. Right or wrong, very often it is the marketing of a concept or idea to the public that makes or breaks an industry. This phenomenon can be seen in the current debate on GMO's and export trade for the United States.

A GMO is a genetically modified organism – it's a living thing that has been altered by the mutation, insertion or deletion of genes. For our purposes here, the organisms are plant based. We're not on Dr. Moreau's Island just yet although, ironically, the first GMO was a mouse and mammals are still routinely "modified," mostly for scientific use. More specific to this discussion, GM (genetically modified) or biotech crops are consumables that have been altered. One might think that modifying a plant's DNA to make it more resistant to pests or more stable in harsh environments would be welcomed as progress, but the reality is that biotech crops are a much more complex and firebrand topic.

The issue of GMO's and, more importantly, the public's right to know about them is one of the more divisive of the last few years. There are many who believe altering a plant's structure could potentially have adverse effects on the humans who consume it. One of the biggest claims in the "war on gluten," for example, is that genetically modified wheat no longer resembles the "amber waves of grain" Americans used to sing about and could be indigestible by our stomachs – inherited from our ancestors who made bread with old fashioned wheat. It is this side that demands clear labeling on any food product that has been modified. A position that a good many corporations have successfully fought to block – and it would seem that they have science on their side.

In a January 2015 Pew Poll for the American Association of the Advancement of Science, 88% of scientists polled felt that "GMOs were generally safe" and that there is "no scientific justification for special labeling bioengineered foods." The consensus is that labeling without proper education could lead to false alarm in the food buying public. To put it in better perspective, more scientists agree that GMO's are safe than scientists that think humans are causing climate change.1

This, of course, is only one side of the equation. There are just as fervent supporters of mandatory labeling of GMO's, stating that it's the consumer's right to choose and that corporations cannot obfuscate the ingredients – and let's not forget that scientists also assured us that no human could be affected by Mad Cow disease.2

Speaking of alarm, false or warranted, a good many countries of the world hold this view in support of labels. At this time, there are 64 countries who won't accept imports of foods without GMO labeling and this is not exactly a new issue. The USA is no stranger to banging its head against restrictions on biotech crops, of which account for over two-thirds produced in the world. A 1996 genetically modified (and voluntarily labeled) tomato puree was welcomed with open arms by the European Union but a GMO soybean sent over that same year caused a backlash and so much political pressure from environmental groups that the next year a mandatory labeling law was passed in the EU; this was considered a trade barrier by the US and thus began the skirmish.2

More recently, in 2013, China turned away corn shipments from the USA that contained a genetically engineered variant. There is speculation that more self-serving motives fueled the actions (China, having a highly productive corn season, could have used the GMO issue as a means to get out of contracts to purchase U.S. product), but the resulting black eye to corporations producing biotech crops was undeniable as the action is reported to have cost the industry upwards of three billion dollars.3

Since multiple countries have multiple regulations and GMO's are such a polarizing product, there may be yet another chapter to this story. The Trans Pacific Partnership, a coalition between the United States and eleven other countries (Japan, Mexico, Canada, Brunei, Malaysia, Australia, New Zealand, Chile, Peru, Singapore and Vietnam – noticeably absent are China and the EU) that seeks to lessen regulations, including those regarding GMO's, and offer a means to settle disputes. As this organization is in its infancy, it remains to be seen as to whether or not it will be effective in lowering the blocks to GMO exports from the U.S.4

The verdict on all of this is still out. Are non-GMOs the new "organic" when it comes to produce? Have we been sold a scary story so that the "good guys" can sell us more expensive food products?

-OR-

Are we victims of corporate greed, being deliberately kept in the dark regarding the items we are sold for consumption – evil items created in a laboratory to increase profits while nutrition and health concerns are disregarded.

Whether or not you personally agree with GMO labeling, there is no denying it's a topic that stands to greatly affect U.S. exports. As the pundits and the PR firms battle and with consumers still a bit confused as to whether or not GMO's are harmful, it will be interesting to see how this issue plays out in the years to come.

[1] Almendrala, Anna. The Huffington Post: "Thanks, Gwyneth, But We'll Stick with the Scientific Consensus on GMOs" August 5th 2015
[2] Carter, Colin A. & Guillaume, Gruere P., Choices: A publication of the American Agricultural Economics Association: "International Approaches to the Labeling of Genetically Modified Foods" Third Quarter 2003
[3] Doering, Christopher (contributions also by Eller, Donnelle), The Des Moines Register: "GMO Worries Cut China Corn Exports". April 26th 2014
[4] Holly, Robert, The Des Moines Register: "Trade Pact Creates Dispute System, GMO Group", November 24th 2015


Kirk White has worked in every division of Yusen Logistics. After a brief stint in Transportation, he transferred to Corporate, where he coordinated Yusen's Employee Empowered Kaizen system and served as a Specialist for the Business Process Re-engineering group, after which he moved to the Warehouse division to serve as the East Coast Quality Manger before ultimately joining the International division, where he hopes to use his Quality knowledge base to prove an asset to OCM.

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Tags:  biotech  genetically modified organism  GMO 

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