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How kids' clothing retailer Carter's added supply chain agility

It has been a positive calendar year so far for US-headquartered children and kids’ clothing retailer Carter’s, aside from the $12.8 million charge related to the spring bankruptcy of key wholesale partner Toys R Us.

Despite the one-off charge reported in first-quarter trading results at the end of May, the company is eyeing significant growth in the current fiscal year following an encouraging 12 months in 2017-18.

The full-year outlook is for net sales growth of 3%, which follows the $3.4 billion in net sales it generated last year, which itself represented an annual jump of 6%.

But as the company continues to expand its international operations off the back of recent acquisitions, including the takeover of the international Skip Hop brand and a Mexican franchisee, inventory levels have grown and new supply chain management techniques sought.

Wade Latham, senior director of operations at Carter’s, and the person responsible for forecasting and global inventory procurement at the business, says a recent investment in software from business planning and performance management platform Anaplan has been crucial to supporting its enlarged organisation.

The partnership is at a relatively early stage, but Latham is already planning a future where the vendor offers a more comprehensive service to the retailer. It currently aids the business with supply calculations, but Carter’s expects to expand its usage into demand and capacity planning, as well as sales and operations planning.

“I would prefer my forecasters to spend time actually forecasting and evaluating the decisions they make to buy inventory, as opposed to running reports out of multiple systems and compiling the data,” he explains.

“We’d gone pretty far down the path of looking at traditional supply chain planning systems. We were kicking around the idea and saying ’we need Excel on steroids – that’s really what we need’.”

Anaplan ended up being the solution to meet Carter’s current needs, supporting an operation with 250,000+ unique product SKUs, the majority of which have short lifecycles at a turnover of three to six months.

Improving capabilities

Giving further insight into how the retailer operates and the results of the Anaplan software integration, Latham says he has two model builders in his team whose sole job it is to build in new functionality and improve the retailer’s existing capabilities.

“I’m a big proponent of the business [needing] to have skin in the game with the technology solutions,” he notes.

“Our fundamental business case was built around the reduction of inventory days of supply, and based on initial results from the first season we are exceeding our expectations. Our data shows we’ve moved approximately four to six days of inventory from our supply chain and we’ve definitely seen an improvement in our ability to forecast capacity.”

Latham says Anaplan was implemented over a 13- to 14-week period, in the form of three separate “sprints”, and he believes the agility of the software raises questions over the validity of traditional supply chain planning deployments.

“I don’t understand why anyone would do a traditional implementation again,” he states.

Carter’s currently operates just over 800 stores in the US, 179 in Canada, and 42 in Mexico, as well as maintaining a wholesale presence in thousands of third-party retailers around the globe, which no longer includes the failed Toys R Us estate. With its large product spread, Latham acknowledged the company was no longer able to manage forecasting and planning with its old systems – many of which had been built in house and bolted together throughout years of trading.

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