The Answer Company Sage ERP X3 for Apparel and Footwear Industry

Enterprise Software Guidefor Apparel and Footwear Distributors

Prepared by:

www.theanswerco.com

www.theanswerco.com

2

Introduction

Implementing the proper business system can be as strategic and important to your bottom line as expanding your warehouse or bringing on new product lines. However, implementing the wrong solution or choosing an inexperienced solution provider can have a serious negative effect on your business — from lost opportunities and late orders to bankruptcy in some extreme cases. Consequently, it is imperative that wholesale distributors of apparel take time to clearly define their business processes and objectives before they start their search for new business software.

There are literally dozens of software products on the market today to help wholesale distribu-tors automate and manage day-to-day business requirements such as accounting, inventory management, order entry, and manufacturing. The good news is that distributors have plenty of options. The bad news is that many companies feel overwhelmed by the evaluation process because they don’t have a roadmap to help them identify the right systems for their unique business and technical requirements.

This guide is designed to help wholesale distributors manage the entire softwareevaluation cycle, from needs analysis and budget planning, through softwareselection and implementation.

Introducing Sage ERP X3

Growing sales and reducing operating costs—for businesses everywhere, are top priorities. From winning customers and expanding into new markets, to eliminating inefficien-cies, automating processes, and increasing competitiveness, businesses like yours face manyof the same challenges. How do you successfully meet them? Start with your data.

A recent study of businesses in North America and Europe shows that improving data usability,accessibility, and intelligence dramatically impacts the bottom line. And better data starts with Sage ERP X3 Fashion.

Sage ERP X3 improves efficiency across your business and provides the insight your employees need, when they need it. In the office or on a mobile device, Sage ERP X3 gives you the tools to reduce costs, grow revenue, and win new customers— locally and globally.

Beyond making invaluable use of your data, Sage ERP X3 for the Fashion and Apparel Industry is equipped with comprehensive sales order entry, inventory (including in-depth attributes like color, size and materials), and warehouse management solutions for the apparel/footwear industry. The specific capabilities of attribute maintenance, sales order entry attribute display, prepak maintenance, and fill rates are included within Sage ERP X3.

www.theanswerco.com

3

Business Growth Considerations

Distributors can choose from hundreds of software products to help them manage their businesses. In the software world, one size certainly does not fit all companies. Consequently, distributors generally move through major phases of growth.

Many distributors are either too small to implement more sophisticated software or their distribution processes are simple enough to manage manually. These companies tend to leverage general business software for core requirements such as general ledger, accounts receivable, accounts payable, inventory tracking, order entry, and purchasing activities. In fact, most small distributors purchase off-theshelf accounting software before fully automating inventory control, shipping, or warehouse management activities.

As distributors grow, their accounting requirements tend to remain relatively unchanged while the need for greater inventory control, sales management, and formalized purchasing tends to increase rapidly.

Sage ERP X3 Grows as Your Business Grows

A system that evolves with youA well designed ERP solution can evolve with you and expand to help you meet increased demands. You can implement a solution like Sage ERP X3 with users and locations to the same instance as needed. As your business processes grow and change, you can adapt new informa-tion flows and procedures quickly, without additional development costs. By design, Sage ERP X3 accommodates new applications and increased transaction volume easily so that you can respond quickly to changing conditions and take advantage of more opportunities.

A complete view of operationsMost ERP systems are not able to offer you a global view of your operations. Without a single, consolidated view of inventory, sales, and purchasing, operations remain in siloes and opportu-nities are limited. Sage ERP X3 offers the ability to manage operations in all your locations - even inventory in transit! You can serve customers with multiple locations better when you can see their activity as a whole, you can increase purchase power by aggregating orders, and you can make better decisions with consolidated business intelligence.

Managing global finances from one instanceTraditional ERP systems may require you to purchase additional instances each time you expand. Duplicating systems is costly and costs even more to maintain them separately. It also becomes difficult to get a complete and accurate picture of your finances when someone has to manually compile and convert the numbers.

Best-in-class ERP solutions like Sage ERP X3 seamlessly connect all locations from multiple geographies within a single, coherent instance. The flexible design of Sage ERP X3 significantly reduces the cost of IT infrastructure and consolidates reporting for locations worldwide - giving you an accurate view of your business in real time.

www.theanswerco.com

4

Core Fuctionality for Apparel and Footwear

Comprehensive and modern ERP systems have core functionality to fit the general needs of most manufacturing and distributing companies. With Sage ERP X3, companies streamline operations with end-to-end process integration, including:

ACCOUNTING & FINANCEGeneral ledger, AR/APPaymentsCost accountingBudgetingAllocationsFixed assetsMulti-currency, multi-company, multi-legislation/multi-chart of accounts

SALESPricing, quotes & contractsOrder entryProduct configurationInventory allocationsDelivery scheduling & shippingInvoicingCustomer returnsSales commissions

PURCHASINGPurchase requestsEncumbrance accountingRequests for proposalsPurchase ordersOutsourcing/Sub-contractingMulti-level approval processingContractsInvoice tracking

INVENTORYMulti-level warehousing and location managementMovements and transactionsRF data collectionQuality controlCostingAcquisition price tracingInventory controlProcurement

CUSTOMER SERVICEContact managementCustomer supportWarranty management and service ordersKnowledge baseCampaigns

MANUFACTURINGRoutingsDiscrete or process batch flowBOM/Formula managementMPS/MRPTechnical data configuratorCostingQuality controlForward/backward traceabilityShop floor controlCapacity planning

www.theanswerco.com

5

Functional Overview

Sage ERP X3 offers big ERP capacity without all the cost and complexity. Address your business needs with in-depth functionality, including:

Finance

From accounting functions and cash management to analytics, budgets, and reporting, Sage ERP X3 handles it all with ease. Even global financial management is simplified by sharing common data among foreign sites while respecting specific usage rules, currencies, and regulations. Capture and analyze every detail of your company’s financial status and make decisions, fast with:

• General ledger • Accounts receivable, accounts payable • Cash management, bank management • Cost accounting • Analytical dimensions, • Budgets, commitments • Fixed assets • Employee expense management

Purchasing

Every purchase matters. With Sage ERP X3, you’ll understand all your purchase points with clarity, take advantage of the best pricing and discounts, and reallocate spending on the fly. Plus, you can handle thorny issues like purchase orders, subcontracts, import declarations, and intercompany transactions with ease. Avoid overspending by ensuring you get the right price, from the right supplier, and the right quantity, at the right time:

• Supplier and product category management • Pricing and discounts • Purchase delivery and scheduling • Purchase requests, purchase orders and contracts • Requests for proposal • Encumbrance accounting, multi-level signature management • Receiving • Supplier invoice entry and returns • Inter-company and inter-site transactions • Sub-contracting • Import declaration

www.theanswerco.com

6

Functional Overview

Customer Relationship Management

Manage contacts. Run marketing campaigns. Provide loyalty building service and support. With out-of-the-box customer service capabilities and integration with Microsoft Office and a host of other solutions, you’ll always have the tools you need to make the most of every customer interaction. Get a 360° view of all your customers across sales, marketing, customer service and support to:

• Marketing campaigns • Contact management and customer support • Sales and after-sales workbench

Business Intelligence and Reporting

Stay ahead of trends and turn insight into action with built-in business object tools and a library of predefined reports that centralize data and deliver it on demand. Expand the core analytics capabilities with business intelligence options such as Sage Intelligence-Financial Reporting and Sage Enterprise Intelligence.

• User-defined dashboards, configurable KPIs • Inquiries and reports • Advanced data warehouse and preconfigured data cubes • Microsoft Office integration

Sales

Gain clear visibility into all your customer relationships and ensure you’re making the right offers to the right customers at the right time. And, take the hassle out of everyday tasks such as order entry, quotes, product configuration, and credit checking. Create a sales order process designed to meet your individual needs:

• Product configurator • Order entry, quotes and contracts • Invoicing, reminders, pricing and discounts • Inventory inquiry and allocations • Order preparation, delivery and shipping • Sales commissions • Loans, customer returns and credit checking • Inter-company, inter-site sales and export declarations

www.theanswerco.com

7

Functional Overview

Warehouse Management

Warehouse Management module offers extended functionality for businesses with high transaction volumes, rigorous traceability requirements and complex storage and logistics needs:

• Dynamic location management • Receipt planning and execution • Workload analysis and resources planning • Preparation Orders optimization • Post-preparation tracking operations • RF invoice communication

Inventory

Plan and execute your supply chain with clarity and confidence. With powerhouse analytics capabilities, Sage ERP X3 enables you to deliver on time, every time. It includes the tools you need for location management, quality control and sampling, traceability, inventory replenish-ment, physical counting, and more. Simply and easily manage your inventory from movements and transactions to quality control and replenishment:

• Product data, multiple units of measure • Location management, inventory balances • Quality control and sampling • Replenishment and inter-site transfers • Stock movements, inventory costing, physical counting • MRP calculation and other methods • WMS features and mobile inventory counts

www.theanswerco.com

8

Feature Highlights for Distribution

• Monitor and manage all aspects of your sales team enabling them to maximize opportunities and automate administrative tasks.

• Manage multiple company units, national and international, within one data structure.

• Reduce complexity and achieve transparency between business units as all information is stored in the same database.

• Gain complete purchasing control to generate and track purchase orders from purchase request issue to receipts and purchase invoices.

• Ensure the highest level of service according to quality and delivery thanks to the customer support and CRM transactions.

• Gain immediate visibility of inventory to ensure compliance with customer and regulatory mandates, and optimize .

• Optimize and manage all levels of planning and execution in the supply chain -- strategic, operational and tactical.

• Provide a better customer experience by accessing accurate customer and product information on the spot.

• Ensure operating margins and get a clear visibility of cost thanks to the real-time analysis and inquiries.

• Empower users with an intuitive navigation through role-based business processes.

• Role-based KPIs and personalized dashboards to monitor business performance.

• Automated Workflow and Notification Management for rapid responses to anomalies.

By streamlining all processes across finance, distribution, and manufacturing management within one fast, simple, and seamless software design, Sage ERP X3 enables a company to:

www.theanswerco.com

9

Apparel and Footwear Industry Requirements

The major challenge of apparel/footwear companies is that they manage styles not inventory items. Each style is defined by different attributes such as color, style, size, and fabric. The combination of a style + attribute(s) = actual inventory items. Not having this information easily available through-out the whole ordering cycle affects productivity and can result in costly mistakes.

As well, the demand for apparel and footwear products is dynamic and often unpredictable. This means that manufacturers and retailers often hold sizable inventories of unwanted goods. Demand is also determined by comparative costs of manufacturing in the North America vs. overseas. Therefore flexibility, efficiency, and having accurate specific information are key components of choosing a proper system for the apparel and footwear industry.

Software for apparel/footwear distributors typically includes configuration capabilities, attribute matrices, and specialized functionality for sales order entry, inventory and warehouse management.

In addition to core functionality, Sage ERP X3 has industry specific functionality, including comprehensive sales order entry, inventory, and warehouse management solution for the apparel/footwear industry. The specific capabilities of attribute maintenance, sales order entry attribute display, prepak maintenance, and fill rates are included within the solution.

Sage ERP X3’s Fashion and Apparel Features include:

Attribute MaintenanceIn Sage ERP X3 you can set up various attributes such as color, size, and material, which is used to create different styles. Attribute values along with Style ID’s make up an Item ID.

Prepak MaintenanceIt is useful to be able to define prepaks that are comprised of a specific size run, color, or any other attribute combination and respective quantities. A prepak is not linked to any particular customer or style. It can be utilized with any style as long as the prepak attributes match the style attributes. Once used in Sales Order Entry or Purchase Order Entry, Prepaks are defined asassembled kit items in Sage ERP X3 making processing easier and more efficient.

Customer Attribute MaintenanceColor, size, material, or other attributes can have a different customer reference. For example, customer ALGAR can refer to Size 5.0 as S and customer Aldebern can refer to Color Red as 31. Using customer notation when accepting sales orders, makes processing easier and more efficient.

Sage ERP X3 for Fashion and Apparel

www.theanswerco.com

10

Sage ERP X3 for Fashion and Apparel cont’d

Sales Order EntryThe Sales Order Entry Screen currently supports up to three style attributes. One on the “summary” screen and the other two on the “details” screen.

• View customer cross reference information • Enter individual styles (“solids”) or prepaks • Set up blanket sales orders • Link a sales order to an existing blanket sales order • Display’s up to two attributes such as color and size (see screen shot). Users can review the order, open and back-ordered quantities • Toggle between ‘Replenishment Position’ and ‘Qty Avail To Sell’ or No Inventory Info Display. Unit prices retrieved using the standard pricing algorithm can be overridden on each row. • Link a specific Purchase Order to a Sales Order for the primary vendor of a style • Available CTP (Capable to Promise) Inquiry

Customer Style MaintenanceThe ability for Style ID’s to have a different customer reference. For example, customer ALGAR can refer to Style AddidasX39 as 56789 and customer Aldebern can refer to Style 36779 as 10259. Using customer notation when placing or printing customer orders and invoices,makes processing easier and more efficient.

Vendor Attribute MaintenanceColor, size, material or other attributes can have a different vendor reference. For example, vendor ACS can refer to Size 5.0 as S and vendor TopHat can refer to Color Red as 31. Using vendor notation when printing a purchase order makes processing easier and more efficient.

Vendor Style MaintenanceStyle ID’s can have a different vendor reference. For example, vendor TopHat can refer to Style AddidasX39 as 56789 and vendor ACS can refer to Style 36779 as ABC123. Using vendor notation when placing and printing vendor purchase orders makes processing easier and more efficient.

Style Class & Style MaintenanceStyle Class function enables a common definition of styles that have the same or similar attributes. Styles are set up using various attributes as described above. Style ID and the attributes can be optionally separated by a Segment Separator such as “-“, “_”, “.” Key informa-tion is entered on the style maintenance screen to automatically set up items, inventory, and prices.

• A list of style substitutes can be set up. This list can be accessed during Sales Order Entry.• A user can quickly copy one style to another, assign a new ID, and description, and preserve the rest of the attributes. Attributes can then be revised as needed.

Generation of Item Id’sOnce a style definition has been completed, Item IDs are generated based on the list of values for each attribute chosen to represent this style. UPC codes can be generated automatically or manually. Once Item IDs are generated, users can use this particular style in Sage ERP X3’s Sales, Purchase, and Returns.

Warehouse Management

Warehouse Management module offers extended functionality for businesses with high transaction volumes, rigorous traceability requirements and complex storage and logistics needs:

• Dynamic location management • Receipt planning and execution • Workload analysis and resources planning • Preparation Orders optimization • Post-preparation tracking operations • RF invoice communication

Inventory

Plan and execute your supply chain with clarity and confidence. With powerhouse analytics capabilities, Sage ERP X3 enables you to deliver on time, every time. It includes the tools you need for location management, quality control and sampling, traceability, inventory replenish-ment, physical counting, and more. Simply and easily manage your inventory from movements and transactions to quality control and replenishment:

• Product data, multiple units of measure • Location management, inventory balances • Quality control and sampling • Replenishment and inter-site transfers • Stock movements, inventory costing, physical counting • MRP calculation and other methods • WMS features and mobile inventory counts

www.theanswerco.com

11

Sage ERP X3 for Fashion and Apparel cont’d

Style Quantity InquiryStyle Quantity Inquiry is an excellent tool to find current information about a style. It handles regular (“stock”) styles as well as prepaks.

• Review all open transactions such as sales Orders, Purchase Orders, Pending Receipts/Shipments, and Warehouse Transfer. The transactional qty is summarized by document numbers such as SO# and PO#. The transactional quantity is broken down based on the style attributes.

Acknowledge Sales OrdersUsers can generate a list of sales orders to be acknowledged based on a style or fill rate. If auser has an appropriate security level, credit hold can be overridden.

Create Pick ListsUsers can generate a pick list based on a style or fill rate. Fill rate column can be sorted to sendorders with high fill rate for picking. If a user has an appropriate security level, credit hold can be overridden. A pick list can not be generated until the credit hold is overridden.

• Revise, review, and update qty to pick on a pick list Print an order or a summary Pick List

Purchase OrderThe Purchase Order Screen functionality is very similar to the Sales Order described above. ATraffic tab is available on the Purchase Order screen to keep track of an over sea’s vessel/container and associated landed cost revisions.

• Set up Blanket Purchase Orders• Link a purchase order with an existing blanket purchase order

Customer Return Material Authorization (RMA)When entering a customer RMA, you can enter Return Qtys. This can be used for stand-alone RMA’s or ones linked to a Sales Order.

• Once the return qtys are entered, the RMA screen is automatically populated

Warehouse TransfersCreate a warehouse transfer using Sage ERP X3

• Once the transfer qtys are entered, the Warehouse Transfer screen is automatically populated

Vendor ReturnsYou can create a Vendor Return using Sage ERP X3

• Once the return qtys are entered, the Vendor Return screen is automatically populated

www.theanswerco.com

12

Conclusion

Not all distribution systems are created equal. Each product and vendor has their strengths and weaknesses. Some systems provide rich industry-specific functionality but lack fundamental accounting features while others provide a broader feature set, which can be customized to meet the needs of many different distribution environments. Further, many small companies automate their accounting and inventory processes before tackling their warehouse manage-ment and extended supply chain systems. These companies must prepare themselves for a huge leap in terms of the investment they make and training required to implement a moresophisticated business application.

Distributors need to consider future growth, vendor viability, product stability and functional-ity, the availability of third-party add-on solutions, total cost of ownership, and potential return on investment when choosing new business software—even if they are automating their business for the first time with pre-packaged, entry-level solutions like Sage 50 Accounting.

A defined software evaluation process will help distributors identify the best solution to meet their needs. In addition, information gleaned from the evaluation process should be used during the implementation process to keep the project on track and on budget. Successful implementations can reap huge company-wide benefits, including significant reductions in data entry, elimination of data entry errors, improved system security, and significant improvements to the company’s bottom line.

About The Answer Company

The Answer Company is a leading supplier of business management software andtechnology consulting services. Since 1995, we have been helping businesses answer the difficult questions with regards to investments in technology and information systems. Our goal is to make businesses more successful at what they do and gain confidence to make profitable moves in their respective industries.

Our software solutions support accounting, operations, customer relationship management, human resources, time tracking, merchant services, and the specialized needs of the manufac-turing, construction, distribution, healthcare, nonprofit, and real estate industries. The Answer Company specializes in the food and beverage, chemicals, pharmaceuticals and life sciences, mining and resources, and accounting and financials industries. We take the time to truly understand our customer’s business and their objectives, and over 500 happy customers enjoying our successful software implementations can attest to that.

At the heart of The Answer Company is a dedicated team of professionals with a wide base of technical & application expertise, all committed to providing excellent customer service. The designers, technical staff, installation experts, trainers and consultants partner closely with your company to uncover key business needs and pain points, develop software solutions, and ensure effective & efficient implementation, as well as long-term support. For more informa-tion, please visit our website at www.theanswerco.com or call 604-473-9166.