Arche Paces Ahead with International Expansion and
Greener Supply Chain using Yourcegid Retail Software
Arche, the designer footwear brand that manufactures and sells handmade shoes through eighty stores across Europe, North America and Asia, has streamlined its international operations with the help of Yourcegid Retail. The company has managed to cut distribution costs by as much as 15%, raise quality control levels to above 99% and increase productivity by around 5% in the last year. What’s more, the number of company-owned stores has doubled in the last five years, with rapid expansion particularly in the US and China, as well as a thriving wholesale business in over a thousand outlets including major department stores around the world.
According to Alain Kostrzewa, chief information officer at Arche, the key to success has been the marriage of good tools with good processes and people.
Half a million pairs of shoes are designed and manufactured each year at its 27,000 square metre production site in the Loire valley of France, before being shipped to every part of the globe (seventy percent are destined for export). All shoes are made using natural materials, mainly sourced through Europe. Manufacturing Arche shoes requires about one hundred manual operations. With around 150 styles each season, more than 50 colours and multiple sizes, Arche uses an integrated range of Yourcegid Retail solutions to make sure it always has the right products in stock for every market.
“As a relatively small family company, we wanted technology that would help right across the business, from production right through to selling on to the consumer, yet without too much complexity and expense,” says Kostrzewa.
The right fit
Arche looked at a number of enterprise-wide (ERP) and vertical systems, and felt that Yourcegid Retail matched their requirements, with very little need for modifications and minimum upkeep and maintenance. The company also wanted software that would be relatively easy to use and adaptable to the specific needs of each market.
For production and distribution, Arche turned to Yourcegid Supply Chain to help collaborate and share information with many of its suppliers, for instance, demand forecasts to help co-ordinate deliveries and production materials. Production schedules, procurement and sourcing are now all centrally controlled via head office using the software, with automated replenishment triggered directly from suppliers when stock levels risk getting too low. Easy to use analytical tools help determine costs and any savings to be made, the ideal quantities to produce, as well as when and how often.
For retail management, Arche deployed Yourcegid Point of Sale so that it can monitor and control activities in every store around the world. The company has since rolled-out the software to all its stores across Europe, North America and Asia, with the final few stores being added to the network in Japan in 2011.
Kostrzewa says that Cegid’s software means that the company is able to react more quickly, for instance, to seasonal fluctuations in demand, or even the need for more airy shoes when the weather gets hot.
A perfect match
“We’re getting to understand each market and make sure we target the right product for each country,” he says. “And Cegid’s software means that we can be a lot more proactive when it comes to eventual delays or problems with supply.”
Nonetheless, Kostrzewa acknowledges that virtually 100% of deliveries announced by the software are maintained, which suggests a high degree of forecast accuracy and reliability. As for service levels, these have been consistently above 70% and are improving on average about 3% each year since the introduction of new IT systems and processes, he says.
Improved forecasting and communication with suppliers is leading to production and supply being more in line with demand. This has led to less need for so much surplus stock and a reduction in wastage. In addition, technology is being used to reduce the amount of leather the factory needs for the production of its shoes.
Green’s in
For a company that prides itself on its environmental, green credentials, supply chain optimisation tools to help it cut down on waste and distribution costs have proven extremely beneficial. For instance, through improved management of deliveries, Arche has managed to reduce the number of lorries required on the roads by around a third. Overall, transportation costs have been reduced about 15% in the last year.
Given its reputation for premium products, maintaining quality control levels above 99% has also been very important to the company. Quality control has improved about 1% in the last year, while productivity has increased 5% during the same period. Global sales at Arche continue to rise, despite a generally difficult trading climate, particularly in apparel and footwear retail. Arche had a relatively good year in 2009, with a turnover of 40 million euros, and 2010 looks even better, says Kostrzewa.
Improved workforce optimisation has been another benefit of Yourcegid Retail. With staff turnover typically high in retail and lots of part-time staff to manage, organising schedules and rotas has been made a lot simpler with easy-to-use software.
“Arche is equipped for the future with technology in place to streamline the business as it continues to expand internationally, with greater transparency and peace of mind in its green supply chain activities,” concludes Tania Oakey, Marketing Director - Retail of Cegid. “We value our partnership with Arche and are sure it will continue to be a long term success.”
An additional tool to help with Product Lifecycle Management is the next planned stage of the IT project, due for delivery in 2011.
