Ecco brochure - 2016

HOW ECCO SHOES

BUILT AN INNOVATIVE

SUPPLY CHAIN

IN ASSOCIATION WITH

HOW ECCO SHOES BUILT AN INNOVATIVE SUPPLY CHAIN Written by Nye Longman Produced by Charlotte Clarke

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WITH SINGAPORE AS ITS NERVE CENTRE OF SHOE PRODUCTION, ECCO SHOES IS REAPING THE BENEFITS OF BEING CLOSE TO THE POINT OF MANUFACTURE; A SUPPLY CHAIN TRANSFORMATION IS GATHERING SPEED

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uality Danish shoemaker ECCO Shoes has shifted its focus eastwards in recent years. By moving functionalities to Singapore, the company is now closer to its substantial Asian manufacturing base, and is driving innovation across its supply chain. Quickly becoming one of the regional industry leaders has just been one effect of the move, explains Supply Chain Director Scott Phillips. The citystate boasts fantastic infrastructure links and one of the most business-friendly environments in the world, both of which Phillips and his team have leveraged to build a fit for purpose operations hub. Business Review Asia speaks to him at length to learn how this was achieved, and what challenges have been overcome.

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SCOTT PHILLIPS

ECCO GLOBAL SHOE PRODUCTION & SOURCING SUPPLY CHAIN DIRECTOR Scott Phillips is a Demand Driven Supply Chain Professional with 14 years’ experience across multiple industries. He started his career in the Sales & Marketing field in Adelaide, Australia for a national Steel Roofing company, Fielders Steel Roofing.

Interest in the concepts of balancing demand and supply led a natural path into the Supply Chain of Detmold Packaging (Detpak Packaging), primarily located in Singapore and Indonesia, and focused on manufacturing paper and board food packaging products to global B2B markets.

Leading an implementation and the operation of a Regional S&OP process (Indonesia, Malaysia, Thailand and Vietnam) for BlueScope Steel exposed techniques in end-to-end value chain concepts. After this Scott took up an assignment with General Cables to merge its Asia Pacific manufacturing acquisitions and build and align the operations supply chains. These included mature operations in Thailand, Philippines and New Zealand, a niche unit in China, and a greenfield plant in India.

Now with ECCO Global Shoe Production & Sourcing as the Supply Chain Director in Singapore, transitioning and building the global headquarters locally from Denmark, Scott is looking forward to taking all his experiences to build a vertically integrated world-class supply chain that drives profitability into its global retail customers.

Married with a young family and having successfully completed a Masters of Business Administration, Bachelor of Management (International Marketing) and a Bachelor of Business (Employment Relations) from the University of South Australia, including a Dean’s Merit List recognition, Scott is a young experienced professional riding the wave of contemporary supply chain practices.

Operations

owner operated footprint in both Founded by Birte and Karl Toosbuy retail and e-commerce.” in 1963, ECCO has always adhered For ECCO, moving operations to the Scandinavian philosophy of to Singapore was crucial. Phillips functionality and simplicity. Still a says: “The aim is be closer to family business five decades on, the our operations; 70 percent of company has swelled to produce our manufacturing is in Asia 20 million pairs of shoes per Indonesia, China and Thailand, year, going out to nearly 90 and the other 30 percent countries with a is in Europe.

19,500-strong “Having the “Singapore is workforce daily global a melting pot worldwide. operations in of cultures and ECCO, despite Denmark, which talent within its size, owns is a long way away the majority of its supply chain but from Asia, made assets. “We are not specifically in things a bit difficult. almost 100 percent Also the access shoemaking” owner operated to new talent throughout our pools in Asia production is seen as an operations,” opportunity for Phillips explains. running companies completely “We make the leather, we make based in Asia.” our shoes; we own a lot of our own warehouses. We also have Meeting the talent challenge owner operated retail space Singapore was initially somewhat and e-commerce platforms. of a double-edged sword when Our strategy is to to grow the it came to recruiting talent, but

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Phillips and his team overcame this in their own unique way. He explains: “Singapore is an interesting place. Obviously there is not much labour intensive manufacturing here, so getting people experienced in shoemaking is near impossible unless you expatriate them. “Singapore is a melting pot of cultures and talent within supply chain but not specifically in shoemaking. So when bringing operations out to Singapore, the challenges were the opportunities and the opportunities were the challenges so to speak.�

With the majority of staff well-versed in supply chain operations, the task remained to ensure that

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WHEREVER & WHENEVER YOU NEED US OFFERING A COMPLETE RANGE OF TRANSPORT AND SUPPLY CHAIN SOLUTIONS We have been developing a flexible, dedicated and dynamic organization that is geared towards creating and providing customized global supply chain solutions for our customers.

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Building a strong partnership with ECCO Global Shoe Production SGL has developed and delivered solutions for ECCO since 2012. Through our Global network and best-in-class partners, dedicated teams at all major ECCO locations and with top management commitment SGL has been able to partner with ECCO to build and operate a world class supply chain. In an ever changing business environment adding new markets, SGL is playing a very important role in assuring that ECCO can keep ahead of competition and develop their services to a global portfolio of customers. “SGL has a dedicated global team in place we are proud to be one of the global transport partners of ECCO enabling them to further grow their market share and develop new and efficient supply chain solutions for their sea- and air freight needs.�, says Kim Fischer Corporate VP, Business Development & Corporate Sales at Scan Global Logistics.

www.scangl.com

they understood ECCO’s decades of country is a regional logistics shoemaking artistry. Phillips explains: hub, and demand for talent “When someone joins the company is high – but ECCO is able to we endeavor to send them to a successfully compete in this field factory to make a pair of shoes, so by ensuring that its positions are they literally come back wearing their both attractive and rewarding. own pair of shoes, which is pretty “When it comes to cool. We call it the ‘cow to shoe manufacturing and planning programme’ and this gives operations this is much our people a more difficult,” “When someone huge amount Phillips says. of insight.”

“So we have joins the company “That’s the had to really we endeavor to send industry part then leverage them to a factory to and then we have on different make a pair of shoes, ongoing personal industries, different so they literally come approaches, looking development. We use performance outside the box and back wearing their appraisals and finding people own pair of shoes” other employee from different engagement backgrounds tools. We generally use they just the rule 70 percent hands on, 20 need the right persona. percent coaching and 10 percent “We spend a lot of time academic as a general rule to keep developing and educating them, developing people going forward.” getting them into the industry, Recruiting for roles such as order understanding how to make shoes, fulfillment and freight logistics the complexities of the industry professionals is challenging – the itself. That has been a challenge.

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At the moment we have a stable team which we’re now working on strongly developing.”

Disrupting the supply chain ECCO bucks the trend when it comes to supply chain operations – it owns and operates almost 100 percent of its assets. A facet of the business, Phillips explains, which gives the company control of where and when its products will arrive in stores.

“We have an extremely complex network from end-to-end, probably made more complex by the fact that we control every step of the way,” Phillips says. He goes on to explain that ECCO has around 200 different supply chains for its materials coming into the factories. “We have five factories that are converting materials into shoes, and we have about 70 shipping lanes going into the first port market.

“At the end of the day, we are shoemakers.

That’s our core competency, but we believe that because we own the assets we can glue the supply chain together for a competitive advantage.”

ECCO’s external operations are being further in-sourced. Over the past year the company has leveraged significant investment in order to purchase new machinery in order to bring more manufacturing components inside its facilities.

“The company likes to control its value chain from end to end, which is quite amazing. It’s rare a company is going that direction these days,” Phillips adds. “We are bucking the trend and that

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makes this an exciting supply chain to work in because we have all the toys. So the challenge is: how we can make them all work together?”

Alongside bringing in the right talent, the timely implementation of innovative technology has played no small part in this growth journey.

“I lose the most sleep - other than trying to find talented people – over disruptive technologies and how we can utilise them all,” Phillips adds. “We run a centralised SAP program with an ERP backbone

throughout the company and this is a fantastic asset.

“We’re starting to use disruptive companies to run our models for us in parallel to our current program to manage Big Data. We are seeing if we can slowly transition into these new technologies to manage complex supply chains. So far we’re managing to do some cool projects.

“If we put data in the cloud, we can be much more flexible when we shift in the market or find a shift in how a customer wants a

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product delivered,” he explains. “We don’t have to restructure hundreds of people and thousands of man hours to restructure a module in our ERP. We can grab data from a cloud, bring it down, play with it, send it back up and continue the day to day running of the business.”

Even a matter of days in the supply chain can feel like a lifetime. Trying to pin down what ECCO will look like in five years will always be a cautious prediction; though due to the strength of the systems Phillips and his team have developed, the future certainly looks bright. Continuously improving its supply chain will be central to wherever the company’s next big growth drive occurs. Driving value while maintaining flexibility in the supply chain will be crucial to this growth, Phillips concludes

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(ECCO Global Shoe Production & Sourcing HQ) 51 Cuppage Road, #06-10, Singapore 229469

T +65 6690 5600