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| Talking Point | Interviews | Success Stories | China Today | Import & Export | Legally Speaking | Regional Development |
Avery Dennison to test the power of DTTN
Label maker Avery Dennison demands cutting edge supply chain solutions - so they’re keen to explore the potential of Hong Kong’s DTTN

The next time you pop into the fashion boutiques, take a moment to think about those jeans from an IT perspective. Somebody in New York designed them based on instructions from someone in Paris. The design was sent to a factory in Shenzhen, where thousands of pairs were made in a variety of sizes and colours. If you look closely, you will see a variety of labels. They’re in different languages and some will be specific to individual markets. All of those labels had to be printed, sorted and delivered at exactly the right moment to enable the factory to ship the jeans right on time. In addition, the cartons being shipped would have had their own labels as well.

You might think that in today’s world putting all these elements together would be fairly easy. The answer to that is, well, yes and no. The company responsible for most of this is Avery Dennison, and they have been doing it for a long time. They understand the issues extremely well and although they make it look easy, it succeeds because, firstly, they have a firm grasp of what needs to be done and, secondly, if they did not they would be out of business.

Terry Hemmelgarn is the Vice President and General Manager for the Retail Information Services Asia at Avery Dennison and he believes they have a firm understanding of the needs of their customers. “We provide brand ID and data management services. We move data all over the world. In Asia alone, we process over 10,000 orders each day,” he said.

The business is tied to information technology in a way that few others are. For many companies, IT is there to “help” and many of the top managers secretly wish it would go away. At Avery Dennison, nothing could be further from the truth. Indeed, IT drives the business. Everything the company does is done at speed and must be extremely accurate.

“This business is about complexity, accuracy of information, speed of delivery. The same garment can be made in different parts of the world, so we must be able to send the same data anywhere. This is a very transaction-intensive business. Our value proposition is to manage the complexity,” he said.

Brand management, for anybody who has seen what the international giants are willing to do to protect it, is not for wimps. Companies choose colours for products and logos and want them to be exactly the same all over the world. Get it wrong, and you will hear about it.

Mr Hemmelgarn said Avery Dennison has systems in place to make certain nothing goes wrong here. They can now send files all over the world safely and almost instantly.

Ricky KF Tang, the Director of Sales and Marketing for Retail Information Services Asia, said the turn-around from initial design to finished product is usually about 60 or 90 days. “We did once handle an order, from initial design to shipping in 15 days. But that was a very special and unusual case,” he said.

Obviously, Avery Dennison will be both keen and cautious about new technologies. With RFID just around the corner, and other business-transforming innovations like the Digital Trade and Transportation Network (DTTN), the company is always looking for what will make a difference, what will give an edge. DTTN, the system devised by industry leaders and the Hong Kong government, is especially interesting. It is intended to make logistics and supply chain management smoother and easier than it has ever been before. The project is scheduled for pilot launch by the end of this month and Mr Tang said they found it quite helpful. “DTTN completes the link to our customers. Some are sophisticated, some are not. If something can help us, we’re happy,” he said. Being a visionary leader in the industry, Avery Dennison has committed to the DTTN Pilot Program.

Mr Hemmelgarn said that new technologies were always something that would interest the company but only if they see it as adding value to the business or making life easier and better for their customers.

Unlike other businesses, where certain standards are starting to become a fixture, Avery Dennison deals with a lot of different technologies. Some of their customers may have an elaborate ERP system, using all the latest technology available; others may only have a simple spreadsheet. The least technically aware may simply use a flat file. Avery Dennison must be able to handle all of these conditions, and the DTTN, which could be able to support “any-to-any” transformation of data format and communication protocols, is therefore seen as the solution.

Besides the DTTN, there is no doubt that RFID will eventually play a very important role in their technology. They are investing in it now and doing some tests. Mr Hemmelgarn believes the first deployment is likely to be with the labels put on the outside of the cartons. Right now, they use bar-codes and although that has worked quite well for many years, there are certain issues and constraints. It is necessary to put the labels in a position where they can be clearly read by the bar-code reader. With an RFID solution, this isn’t necessary.

The problem at the moment is that there are not enough global standards.

“Getting a uniform standard is important. I think it will start to happen soon, but it will take time,” he said.

One of the biggest challenges for a company like Avery Dennison is that fashion changes so often. Then again, that also means more labels to print.

 
December 2005

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