INDEX
Why is DX not pervasive in the apparel industry?
『DX』
You may have seen this term in newspapers, on TV, and in web news recently.
It is an abbreviation for “Digital Transformation,” a generic term for measures to reduce costs, improve productivity, implement new business models that utilize the Web and digital technologies for customer behavior and experience, increase IT investment, and renew systems.
DX is now the hottest theme in the business world, partly because the Ministry of Economy, Trade, and Industry (METI) in Japan is supporting the promotion of DX in corporate management, such as sales, production management, marketing, and customer service, with subsidies.
However, the reality is that in some industries, DX has not progressed well and has not been utilized to its fullest. Companies that have long been engaged primarily in analog operations and transactions may be less able to take the initiative in introducing and transitioning to DX, leaving them with old-fashioned efficiencies and unable to unleash their in-house creativity.
This is especially true in the apparel industry.
The majority of companies still conduct transactions using paper documents for everything from ordering and receiving goods and managing inventory to delivery slips, invoices, and other forms, due in part to the fact that they are unable to devote resources to DX in the fast-paced marketplace.
Although DX does not only refer to paperless transactions, this time we would like to focus on how to digitize one of the biggest barriers to DX, “paper forms,” and what happens when they are digitized, using an apparel manufacturer that has complicated forms management as an example.
Paper forms, the benefits of documents…?
Apparel Manufacturer’s Dilemma
Apparel manufacturers use a great variety of forms and documents to conduct transactions and business.
- Quotation
- Purchase Order
- Order Confirmation
- General Invoices
- Deposit Invoice
- Balance Invoice
- Undelivered and Unbilled Lists
- Packing List
- Picking list
- Delivery note
- Consignment delivery note
- Digested purchase invoice
- Returned goods slips
- Receipts
There are more, but this is a rough list.
Apparel manufacturers dealing with foreign countries have complex trade conditions, and in addition to the above, they prepare a number of documents required for import/export procedures, such as commercial invoices and pro forma invoices.
From order receipt to delivery, many of these forms are created in Word, Excel, or handwritten and sent to suppliers. Orders are frequently changed or corrected, so they are rewritten and sent out each time. Since each client has different multipliers, transaction terms, and payment terms, individual forms are created and rewritten whenever there is a change.
Even if the forms are created on a computer, they are printed and issued on paper at the end of the process. Faxes are also still in use, although they have become much less common.
Furthermore, the problem with the large number of forms that are issued daily is storage.
Since all forms are stored for 5 to 10 years, the storage space occupied by the office is increasing year by year, eroding the workspace. The cost of collecting, organizing, and filing the various forms for each business partner and buyer, and the cost of storing them under strict control is immeasurable.
And so on…
The battle with forms at apparel manufacturers never ends, and the accounting department and assistants in charge of receiving and placing orders struggle exhaustively with the countless forms they are forced to prepare.
The reason why IT and web-based solutions have not taken root in such complicated operations is not only because of custom and familiarity, but also because of the high degree of freedom and flexibility to rewrite forms flexibly, even if they are complicated.
Apparel manufacturers are still creating new paper forms today because they have never had a system that is as easy to use and cost effective as paper.
However, there is finally a solution to this dilemma.
Advantages and disadvantages of converting forms from paper to online and electronic
Over the past few years, several services have been released that allow companies to manage everything from order and supply management and form creation to inventory and payment management, all in a single system that specializes in complex apparel operations.
SaaS and cloud-type back-office tools that are relatively inexpensive to implement and easy to migrate are attracting attention.
However, there are still concerns about introducing and migrating from paper to electronic or online forms.
- My job description has suddenly and completely changed, and I may not be able to keep up.
- Will I have to learn new skills?
- What are the costs? What are the monthly costs?
To sort out these questions and issues, let’s consider the advantages and disadvantages of digitizing forms. Please also refer to the solutions to the disadvantages.
Merits
Time efficiency
The most important advantage of digitization is time.
By selecting suppliers and buyers from a list of suppliers and buyers with registered transaction terms and prices, necessary transaction forms, such as invoices and delivery slips, can be easily created.
The time spent on filling out, printing, and rewriting forms is greatly reduced, allowing you to shorten delivery times and allocate more time to other tasks and customer service. You will also have more time and resources to develop ideas, which will add value to your business and increase your creativity and motivation.
Cutting costs
The cost of printers to print, paper and ink to purchase, storage space to maintain, and mailing costs are reduced to zero. The cost reduction effect of paperless is tremendous. With these expenses, you can expect to cut costs to the point where you can even make change to cover the maintenance costs of the order management system.
Reduction of work costs
As much as time and expense, the benefit that everyone realizes is that the creation of forms has become overwhelmingly “easier”.
In particular, back-office tools specialized for apparel operations are popular because they cover all conditions and items handled in the apparel business, and are as flexible as if they were made on paper, allowing smooth and easy re-issuing even when ordered products or multiples are changed in the middle of a correspondence.
Customer information in data and past transactions can be searched in a matter of seconds by entering conditions. This speed and efficiency cannot be achieved with paper documents, which require a trip to the storage location to find them. It also speeds up the response to inquiries and improves customer satisfaction.
Skills and learning
With the advent of SaaS for a variety of industries, cloud services for order management, including form creation, have become dramatically easier to use. Just by looking at the screen, you can tell what operation to do next and what tasks you want to start.
As we will discuss later, back-office tools specialized for apparel operations also have a full range of forms for overseas transactions and trade operations.
No special skills or training is required.
If you have experience with Internet shopping or office software, you can quickly get a feel for the operation.
The fields to be entered are the same as those on paper forms, and all the forms necessary for order management are available. As described below, back office tools specialized for apparel operations also have a full range of forms for overseas transactions and trade operations.
Demerits
Entering terms and conditions for suppliers and buyers
This is the largest and most time-consuming part of the apparel SaaS process.
Since most apparel transactions are unique to the apparel industry and the terms of trade differ from customer to customer, each customer and buyer must register their own multipliers, prices, brands, products, currencies, languages, etc. Once these data are entered, the process is very smooth.
However, once you have entered the information once, you can create the forms very smoothly. Whenever there is a change, you can re-issue the form by changing only what you want to change, preventing input errors.
Introduction costs
Electronic creation and management of forms is rarely implemented by itself, but is generally included in back-office tools for order management and production management.
Installation and maintenance costs vary depending on the functionality, duration, and scale of the business. For example, DEXTRE, a back-office tool specialized for apparel operations, can be used for 20,000 yen per month for an annual contract. There are no implementation or development costs.
Are there any risks of information leaks or security concerns?
When forms are created electronically or online, customer and company information and transaction details are stored in the servers of the contracted server company. Although periodic system maintenance and backups are performed, the fact that documents previously stored within the company are now data, stored and managed outside of the company can be a concern, especially in the early stages of implementation.
Many cloud services and web services, including SaaS, use highly encrypted communication and security measures to prevent users’ personal information from being read externally, including information exchanged online with users, technical content, and stored data.
In addition, access restrictions can be used to limit who can view data and to record who has viewed which information and when.
Nevertheless, it is important to choose a service from a company that has strict development and management system standards that never neglects to strengthen security in case of emergency and internal measures against loss or information leakage.
What can electronic form preparation do?
How does it differ from paper forms?
Let’s take a look at some examples of SaaS order management tools for the apparel industry.
The main difference from paper forms is that you can automatically and intuitively create invoices, delivery slips, and trade documents in a short time. Even if you need to make a sudden change, you can create a new form by changing only the conditions you want to change, such as the product or the multiplier. A history is kept to show where and what changes have been made, and the flow of correspondence can be tracked.
Document data is stored on the server and can be created and checked anywhere there is a communication environment.
Forms and slips that can be issued
Various forms are created within the same tool for product management, order management, and online exhibitions. The back-office tools for apparel operations are also capable of creating forms tailored to specific business transactions and business practices.
All forms are created by automatically applying different transaction terms (multiplier rates, special discount rates for wholesale price transactions) and payment terms (closing payment, advance payment (deposit, etc.)) for each trading partner and buyer.
- Automatic creation of order confirmations
- Editing and reissuing of order details
- Invoices
- Close payment or deposit invoices
- Create invoices for closing payment based on delivery information
- Create invoices from lists of unpaid and unpaid invoices
- Packing lists
- Delivery notes
- Credit notes (management of overpayments by buyers)
- Various vouchers for repair charges, shipping charges, etc. (can be given to invoices to adjust amounts)
- Change history storage and sharing
Everyone can see and understand every form.
By sharing information on the creation of forms with staff and team members, it is possible to see when and to whom forms were issued and what changes were made.
This will contribute to the creation of an environment where smart, high-value-added communication can take place.
Creation of forms and documents for overseas
It is also equipped with functions to create forms and trade documents for export transactions with overseas buyers at the same time as transactions in Japan.
- Multi-language and multi-currency
- Simultaneous issuance of forms in multiple languages and currencies for each buyer
- Issue commercial invoices based on product information
- Packing list
- Pro forma invoice for deposit
- Pro forma invoice for balance
These documents can be created by automatically calculating a price that combines a multiplier or special discount rate set for each product, trade terms (FOB, EXW, DDP, etc.), multiple payment currencies, and payment terms.
Conclusion
The shift from analog to digital form creation triggered the introduction of order management tools and a review of internal systems, leading to cost reductions and, in some cases, plans and measures created by the new staffing led to new business and improved customer satisfaction.
SaaS/cloud back-office tools enable the creation of forms and order management anytime, anywhere. Tools that support special business transactions are now available for order management in the apparel business, where functions have been insufficient in the past.
The flexibility to freely set detailed conditions in line with practical business operations is similar to the feeling of creating an order on paper, and we have heard from customers that their work has become easier without the stress of using tools.
Accelerate your business growth by taking advantage of the benefits of sharing information and progress with colleagues and clients at remote work, overseas, and on business trips.
※ The functions for creating forms described in the article include those that are currently being implemented or will be implemented in DEXTRE (currently in beta version).
