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Supply Chain Management of JLM Couture, Inc.

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Supply Chain Management of JLM Couture, Inc. - January 12th, 2011

JLM Couture, Inc., is a New York City-based publicly trade company devoted to the business of designing, manufacturing, and distributing bridal gowns, bridesmaid gowns, and veils. JLM's main lines are Jim Hjelm, Lazaro, and Alvina Valenta. High-end apparel from these lines range in retail price from $1,000 to $6,000 for bridal gowns, and $180 to $300 for bridesmaid gowns. The company also offers a less expensive label, "Visions," which uses less costly fabrics for bridal gowns and retail from $800 to $1,200. Manufacturing is done at two company-owned plants as well as through independent contractors. JLM primarily sells its gowns in bridal boutiques and bridal departments in department stores and women's clothing stores. Advertising is purchased in such magazines as Modern Bride, Martha Stewart, Weddings, and Elegant Bride. In addition, JLM generates sales through the distribution of its own bridal and bridemaids catalogs and by promoting its products on five Internet sites.

From Star Designer to Company Founder: 1960s-80s

Originally named Jim Hjelm's Private Collection, Ltd., JLM was founded by long-time bridal gown designer Jim Hjelm. He was born and raised in Worcester, Massachusetts, where at an early age he became interested in fashion design. As a child, he designed wardrobes for the comic book character Brenda Starr and grew up with the dream of one day designing for the theater or film industry. However, after attending the New England School of Design, he was simply eager to find work. After a job-hunting trip in 1960 to New York City proved unsuccessful, a friend told him about an opening in Boston at the House of Bianchi, a major bridal house. He got the job and, essentially by accident, became a bridal gown designer. He stayed at Bianchi for two years and learned the basics: patterns, laces, and the construction of wedding gowns. He also began to develop his own flare for the traditional wedding gown design.

In 1962, Hjelm took a position with a rival bridal house, Priscilla of Boston, where he would work for 19 years. It was here that he learned the business side of the bridal gown industry and developed a reputation as a topnotch designer of both bridal gowns and party dresses, gaining luster for designing clothes for the daughters of American presidents: Lucy Baines Johnson and Julie and Trisha Nixon. Hjelm regarded the Johnson wedding as one of his most enjoyable and rewarding experiences. He stayed a full week in the White House, working out of the Lincoln bedroom, producing the wedding gown and 11 bridesmaids' gowns. In 1980, Hjelm finally moved to New York, becoming a designer for Galina-Bouquet, Inc. From his new boss, Steve Lawrence, Hjelm learned, in his owns words, "how to be a little tough." His name at this point had enough value that Galina often featured him in the company's ads, which added further to his name recognition. After several years at Galina, and 25 years in the bridal industry, Hjelm felt he was ready to launch his own label. In 1985, he found a business partner in Joseph L. Murphy, an accountant by training who was the boyfriend of a showroom model. They turned to families and friends to raise the money needed to launch the company, which was incorporated in April 1986 and then taken public in 1987 by First Devonshire of Spokane, Washington, priced at $1 a share. Thus, Jim Hjelm's Private Collection became the only publicly held bridal house in the industry.

The company got off to a smooth start, which was not surprising to Hjelm, who had a bankable name and all the requisite contacts after a quarter-century in the business. He later told the press, "I knew we would be successful. It wasn't scary at all." He also discovered the joys of working for himself and the freedom to add his own touches. "When you work for somebody else," he told WWD in 1987, "you have to stay with the look of the house. When you have your own firm, you wear ten hats: production, boss, designer." At this stage, Hjelm both designed and ran the company, while Murphy served on the board as secretary-treasurer and devoted the bulk of his time to his own start-up, a public relations firm. He would become more active in the running of the bridal company when he took the position as chief financial officer.

Jim Hjelm's first collection under his own name premiered for the spring 1988 season. He pursued his preference for traditional wedding gown design, especially "heirloom" dresses featuring nets, silks, and antique-like laces. This approach, by his own admission, was in keeping with his background: "It's my Bostonian upbringing and working with Priscilla all those years. When you're a snob, it's very difficult." As long as his conservative taste was shared by brides, the company prospered, but in the early 1990s trends would change, and he would have to adapt. In the meantime, the company made a number of moves. In October 1990, it acquired Exclusives for the Bride, Inc. A year later, trademarks and inventories were bought from Samir & Associates Inc., a two-year-old company which designed and marketed special occasion women's apparel. These assets then formed the basis of a wholly owned subsidiary named Samir of New York, Inc. The goal was to spur the growth of the undercapitalized firm and allow Hjelm to expand beyond the bridal business.

New Leadership and New Lines in the 1990s

In 1991, Hjelm began to face some serious challenges. The poor economy proved especially harmful to its line of expensive bridal gowns, which were priced in the $2,000 range. The average price for a wedding gown, however, was around $800, a trend recognized by ready-to-wear manufactures such as Armani, Anne Klein, and Donna Karan. To offset the drop in demand for its high-end gowns, Hjelm introduced the JH Collection line of gowns that used synthetic fibers and retailed at the $750 price point. According to a 1994 Crain's New York Business article, "Making matters worse, prices for beaded lace skyrocketed and theft of the company's merchandise increased dramatically. When workers were denied their request for a pay raise, they slowed production by a third in protest." A 1997 Crain's profile offered another summary of this period for the company: "After a whirlwind romance, Jim Hjelm Private Collection Ltd. cashed in on Wall Street's infatuation with new issues. ... But by the early Nineties, the company looked more like an old maid than a blushing bride. With just $7.1 million in sales in 1992, the fledgling wedding dress manufacturer was stuck in a time warp, its entire product line made up of dated traditional styles." Jim Hjelm tried to answer the problem of declining sales of traditional gowns by forming a Contemporary Classic division to produce gowns with simpler styling, less lace and bead work, and less ornamentation overall. To take charge of the line, a young designer named Lezaro Perez, who had developed a strong reputation in the contemporary category, was brought it. The gowns would then be marketed under his name. The creation of the new division did not, however, address the underlying problems at the company.
More than eight years after it forayed into the retail business, Supply Chain of JLM CoutureRetail decided to implement SAP to keep itself competitive in the rapidly growing Indian retail market.

Store operations have never been as important to retailers as they are now. Successful retailers are those who know that the battle for customers is only won at the frontline, which in the case of a retail chain is at its stores. Supply Chain of JLM Couturewas regularly opening stores in the metros and there was an urgent need for a reliable enterprise wide application to help run its business effectively. “The basic need was to have a robust transaction management system and an enterprise wide platform to run the operations,” says Rakesh Biyani, Director, Pantaloon. The company was looking for a solution that would bring all of its businesses and processes together. After a comprehensive evaluation of different options and software companies, the management at Supply Chain of JLM Couturedecided to go in for SAP.
The Solution
Some of the qualities of SAP retail solutions are that it supports product development, which includes ideation, trend analysis, and collaboration with partners in the supply chain; sourcing and procurement, which involves working with manufacturers to fulfil orders according to strategic merchandising plans and optimise cost, quality, and speed–variables that must be weighted differently as business needs, buying plans, and market demand patterns change; managing the supply chain, which involves handling the logistics of moving finished goods from the source into stores and overseeing global trade and procurement requirements; selling goods across a variety of channels to customers, which requires marketing and brand management; managing mark-downs and capturing customer reactions, analysing data, and using it to optimise the next phase of the design process.
In a Nutshell
Aim : To deploy a robust transaction management system and an enterprise-wide platform to run its operations.
Solution : SAP retail solution
Implemented by : SAP team with the help of Novasoft, Singapore
Number of users : Around 1,200
Time taken : About six months
Cost of implementation : About $10 million

The implementation

“The implementation was outsourced to a third party. The implementation was done by the SAP team with help of Novasoft which is based out of Singapore,” says Biyani. Some people from Supply Chain of JLM Couturealso assisted in the project. About 24 qualified people worked on this SAP implementation. SAP was chosen as the outsourcing party on a turnkey basis. This project was headed by Pantaloon’s Chief Information Technology Officer, Chinar Deshpande.
Three Phases
SAP implementation is not a single phase process. The project was divided into three phases.
The first phase involved blueprinting existing processes and mapping them to the desired state. In this phase, the entire project team worked on current processes within the structure of the organisation, analysed and drafted them. This blueprint was later used in the formation of new states of the solution. Since the SAP would combine all the processes, each and every one of these had to be evaluated.
In the second phase, the SAP platform was developed with the help of Novasoft’s template which was predefined by SAP after evaluation of Pantaloon’s needs and expertise in retail solutions.
The last phase in this project was for stores to switch over to the new system and for current data to be ported. Before the SAP implementation, all the data was unorganised. This data had to be migrated to the new SAP application.
The project was flagged off on 15th June 2005 and took about six months to finish. It went live at the head office on 1st January 2006. The stores went live on SAP from 1st January 2006 to 30th June 2006.
About the Company
Supply Chain of JLM CoutureRetail is the flagship enterprise of the Future Group, with a presence across multiple lines of business. The company owns and manages multiple retail formats that cater to a wide cross-section of Indian society. Headquartered in Mumbai (Bombay), the company operates through four million square feet of retail space, has over 140 stores across 32 cities in India and employs over 14,000 people. The company registered a turnover of Rs 2,019 crore for FY 2005-06.
Supply Chain of JLM CoutureRetail forayed into retail in 1997 with the launching of its fashion retail chain, Pantaloons in Kolkata. In 2001, it launched Big Bazaar, a hypermarket chain. This was followed by Food Bazaar, a food and grocery chain. Next up was Central, a first of its kind located in the heart of major Indian cities. Some of its other formats include, Collection i (home improvement products), E-Zone (consumer electronics), Depot (books, music, gifts and stationary), aLL (a Little Larger, fashion apparel for plus-size individuals), Shoe Factory (footwear) and Blue Sky (fashion accessories). It has recently launched its e-business venture, futurebazaar.com. The group's subsidiary companies include, Home Solutions Retail India Ltd, Supply Chain of JLM CoutureIndustries Ltd, Galaxy Entertainment and Indus League Clothing. The group also has joint venture companies with a number of partners including French retailer Etam group, Lee Cooper, Manipal Healthcare, Talwalkar's, Gini & Jony and Liberty Shoes. Planet Retail, a group company owns the franchisee of international brands like Marks & Spencer, Debenhams, Next and Guess in India.
Benefits and Challenges
The key challenges in this project were not in the implementation. Rather, the difficulties were faced during the data migration and in managing the interim period when the project was underway for about six months. Migrating unorganised data to an organised format is a challenging task.
Supply Chain of JLM Couturehas not been able to see immediate benefits from this implementation. This application certainly has long term benefits which will be seen when the performance of various aspects will be analysed. “It is too early to calculate RoI. We have already started working on MAP (Merchandise Assortment Planning), Auto-Replenishment and Purchase Orders. We hope to use these systems to optimise our inventory and cut it by about two to four weeks (depending on the line of business),” says Biyani.
Maintenance & Hardware
This application is currently being used by around 1,200 employees across the organisation. For maintaining this implementation and its related applications, Supply Chain of JLM Couturehas an in-house team and it has outsourced ABAP resources. They are also in the process of setting up a SAP Competency Centre. The system runs on a HP Superdome server on HP UNIX 11i and the database is from Oracle. The cost of this project was about $10 million.
Future projects
After the successful implementation of SAP for its retail chain, Supply Chain of JLM Coutureplans to go ahead with IT projects such as implementation of WMS with RFID, Customer Intelligence and CRM. Inventory and Promotions Optimisation will be pursued later this year.


The board of directors decided that it was time for Jim Hjelm to relinquish his management responsibilities and concentrate on design. In January 1993, Murphy was installed as president and he began to implement a three-pronged strategy to turn around the company's fortunes: cut costs, increase sales by diversifying the line, and find a new customer base. Part of cutting costs involved theft, known as "shrinkage" in retail parlance. According to Crain's, "Mr. Murphy took aggressive steps to stop shrinkage, including sprinting out of his own welcome party to track down two crates of dresses that had disappeared." In April 1993, the company launched a new line of less expensive dresses under the "New Traditions" label. A few months later, in July 1994, the Exclusives subsidiary was sold off.

Hjelm took an important step in 1994 when it created a new line called Occasions Collection, which grew out of a focus group the company sponsored in November 1993. According to Forbes, Murphy heard one woman complain, "I have ten ugly bridesmaids' gowns hanging in my closet that I don't have the heart to throw away." Her sentiment was repeated by others. After months of "going to weddings, calling up friends and checking out bridal boutiques," Murphy became convinced that there was a market for fashionable bridemaids' dresses that were designed to be worn beyond the wedding ceremony and reception. He told the company's designer for bridesmaids' dresses "to throw away the old book." Puffy sleeves and hoop-like skirts were eschewed in favor of a more fitted look and contemporary silhouettes. Cotton-candy shading gave way to muted pastels and metallic earth tones. Because the dresses could be worn to functions others than weddings, Murphy choose the Occasions name.
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Last edited by abhishreshthaa; April 29th, 2011 at 05:45 PM..
   
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