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1. Nürnberger Logistik-Tag
an der Georg Simon Ohm Fachhochschule Nürnberg
am 24. Oktober 2006
Supply Chain Management bei KarstadtQuelle
ein Praxisbericht
Carsten Wolff
Managing Director
KarstadtQuelle International Services AG
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Schiff
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We deliver
Time
Price
Quality
Our network and our experience secures our
common success. We provide added value
to the customer’s global sourcing.
1. What is KQ IS AG / Noris Trading – MISSION
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NIT NIT Milan Latvia Hong Kong New Delhi
NurembergIstanbul Romania Shanghai Bombay
St. Gallen
Izmir Dalian Tirupur
Hungary Beijing Pakistan
Hong Kong
Bulgaria Shenzen Vietnam
Thailand Bangladesh
Korea Indonesia
KarstadtQuelle IS St. Gallen
KarstadtQuelle AG, Essen
Noris International Trading
Europe ASIA
All buying offices are managed by KQ IS AG
Non-group business through N.I.T.
2. Organisation of the Buying Division
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Karachi Taipei
Seoul
TirupurQC
Shanghai
Beijing
Hong Kong New Delhi
Jakarta
Milan
Bangkok
Dalian
Ho Chi Minh CityBombay Bangladesh
Sophia
Vilnius
Budapest
Bucharest
Istanbul
Izmir
The KarstadtQuelle Buying
organization has almost 30
offices. More than 1.000
employees are managing
supplier relationships in
more than 65 countries .
The KarstadtQuelle buying
organisation has 22 offices.
Over 1,000 employees
manage supplier
relationships in over
50 countries .
Quingdao
3. Selling is Local – Sourcing is Global
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The standardized organisation within each office is grouped according to the customer or relevant products.
Hongkong
Taiwan
South Korea
P.R. China
Bangladesh
Indonesia
Vietnam
Thailand
India
Pakistan Italy
Turkey
Bulgaria
Lithuania
Hungary
Romania
Far East Europe
Supplier A
Merchandise Manager T-Shirts
M 1 M 2 M 3
Supplier B
Supplier C
Quality Control Manager
QC 1 QC 2
4. Buying Organisation
Staff Merchandising: 501 Staff QC: 318 Staff Administration: 254 Total 1‘073
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KarstadtQuelle offers a unique combination of benefits for third party customers.
Competitive purchase prices
• Direct contact to producers in low cost countries• Established relationship with world leading producers• Economies of scale through bundling of volume• Knowledge to bridge gaps in underdeveloped markets
Better quality of product and delivery
• Advanced Quality Management (AQM) with European and local technicians
• Long term partnership with leading certified test labs and competitive prices
• Comprehensive system for quality and social compliance audits• Partnership and integrated systems with leading consolidator and
forwarder
Efficient support of your buying teams
• Product-oriented merchandising groups• Comprehensive services on all aspects of the buying process• Deep insight into and anticipation of market shifts• Integrated online buying system software• B2B auctions
Wide scope of products and markets
• 22 offices dealing with suppliers in over 50 countries• Complete product portfolios for Textiles and Hardware• Expertise in intern. retail, mail order business and hypermarkets• Broad experience in sourcing
5. USP‘s – Advantages of our Buying Offices
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Previously established for the KarstadtQuelle organisation, the buying offices today already handle a substantial and growing volume for Non-Group Customers.
Total sourcing volume 2005: € 1,1 billion
6. Customer Structure
16%39%
7% 28%
10%Other KQGroup
Non Group Customer
Karstadt
Neckermann DQuelle D
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Our offices combine expertise in the local markets with fundamental product knowledge for many merchandising groups.
Trading volume by regions Trading volume by product groups
Northern Asia/HK
Western Europe
Eastern Europe
Indian Sub- continent
South-East Asia
Textiles
Hard-ware
Ladieswear
Menswear
Under &Swimwear
Home textiles
Shoes
Childrenswear
Other
House &Home
White Goods
PC/Telco
Sports
Brown Goods
Toys
Other
7. Trading volume by region and product group
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8. KQ IS AG – Services provided by the Buying Offices
By delivering professional services in all phases of the sourcing process we support you in reaching your goals.
Development of Collection
•Market and supplier research
•Travel preparation and support
•Development of offer samples
1 Order Development
•Sample Management•Technical support•Purchase decision •Order follow-up•Texyard/GNX
2 Order Fulfilment
•Production release•Production follow-up
• In-line and final inspections
3
Logistics and Documentation
•Delivery of merchandise (outsourcing / 3rd party)
•Handling export and shipping documents (outsourcing / 3rd party)
4 Order Paymentand Commission
•Payments and reimbursements of customers
•Documentation and recording of commission
5 Processing Claims
•Merchandise claims•Delivery date claims•Follow-up and settlement of claims
6 Process Related Tasks
•System development•Reporting and controlling
•Budgeting and capacity planning
•Travel management bookings
7
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The IPOS system constitutes the connection between your buying department and the buying offices.
9. IPOS - KQ IS AG own order system
Technology• Web-based interface• Software based on QRS/Rockport
development (Tradeweave)• Open system / interfaces to supplier
and logistics systems
Features• Up-to-date and online information
about the status of each order• System can be accessed by all
parties involved • Means of interaction between the
buyer and the buying office
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Off
er
Sh
ee
t
Off
er
Sa
mp
leB
uyi
ng
/ C
ou
nte
rS
am
ple
Ord
er
Pla
cem
en
t
Re
lea
se o
f B
uyi
ng
/
Co
un
ter
Sa
mp
le
Sh
ipp
ing
Ap
pro
val
Fin
al
Insp
ect
ion
Pro
du
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n R
ele
ase
Siz
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etL
ab
Dip
Pho
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amp
le
Pro
du
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nIn
-Lin
e I
nsp
.
Lo
gis
tics
Exe
cutio
n
Invo
ice
/ P
aym
en
t
Finance / Administration
System Support: IPOS, PILOT, Target:AQM+
Auc
tion
Pro
-a
ctiv
eo
ffer
Buy
er‘
sre
que
st
La
b T
est
Order Fulfilment
Order
Development
A
B
C
Buyer‘s Request
Auction
BO obtains offer from supplier
OrderClearing
Su
pp
lier
Cu
sto
me
r
10.1 Standard Core Process 1
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10.2 Standard Core Process 2
Off
er S
heet
Off
er S
ampl
eB
uyin
g /
Cou
nter
Sam
ple
Ord
er P
lace
men
t
Rel
ease
of
Buy
ing
/ C
ount
er S
ampl
e
Shi
ppin
g A
ppro
val
Fin
al
Insp
ectio
n
Pro
duct
ion
Rel
ease
Siz
eS
et
La
bD
ipP
ho
toS
am
ple
Pro
du
ctio
nIn
-Lin
e I
nsp
.
Logi
stic
s E
xecu
tion
Invo
ice
/ P
aym
ent
Finance / Administration
System Support: IPOS, PILOT, Target:AQM+
OrderFulfilment
OrderDevelopment
Au
ctio
nP
ro-
act
ive
Off
er
Bu
yer‘
sR
eq
ue
st
A
B
C
Buyer‘s Request
Auction
BO obtains offerby Supplier
Lab
Tes
t
OrderClearing
Total process
Description: ....................................................................................................................................
X
Responsible person MC QM Admin Cust,Supplier
LINK to IT
Sub process
Order
Development
A
B
C
Buyer‘s Request
Auctions
BO obtains offer by Supplier
Process stepProductrequestProductrequest
A1 ProducingCounter Sample
ProducingCounter Sample
Sending Counter Sample
Sending Counter Sample ......
A2 A3 ...
Execution: ....................................................................................................................................
Special instructions
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Product Request: photo / descrip-
tion / original sample
Product Request: photo / descrip-
tion / original sample
1A1Producing the
Buying / Counter Sample
Producing the Buying /
Counter Sample
Sending the Buying /
Counter Sample
Sending the Buying /
Counter SampleNegotiationsNegotiations Order PlacementOrder Placement
Order DevelopmentA B
C
Buyer‘s Request
Auctions
BO obtains offer by Supplier
1A2 1A3 1A4 1A6
Product Offer to Customer
by BO
Product Offer to Customer
by BO
1B1
Offer SheetOffer Sheet Sending the Offer Sheet
Sending the Offer Sheet
Reviewing theOffer Sheet
Reviewing theOffer Sheet
Confirmation / Sample RequestConfirmation /
Sample Request
1B2 1B3 1B4 1B5
Producing theOffer SampleProducing theOffer Sample
1B6
Shipment of theOffer Sample
Shipment of theOffer Sample NegotiationsNegotiations
Order PlacementOrder Placement
1B7 1B8
1B10
A
B
C Preparation for an Auction
Preparation for an Auction
1C1
Online EvaluationOnline Evaluation Final To-Do‘s before Auction starts
Final To-Do‘s before Auction starts AuctionAuction Auction Wrap-UpAuction Wrap-Up
1C2 1C3 1C4 1C5
Ordering Buying /Counter Sample
Ordering Buying /Counter Sample
1C6Producing the
Buying / CounterSample
Producing theBuying / Counter
Sample
Sending theBuying / Counter
Sample
Sending theBuying / Counter
Sample
1C7 1C8
Offer Sample Review
Offer Sample Review
1B9
Order PlacementOrder Placement
1C10
Buying / CounterSample Review
Buying / CounterSample Review
1A5
Buying / CounterSample Review
Buying / CounterSample Review
1C9
Textiles and Non technical hardware
1
10.3 Standard Core Process 3 – Process Overview “Order Development Textiles and Non technical hardware”
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10.4 Process Overview “Order Fulfilment” Textiles – Non technical hardware – Technical hardware
ETA (estimatedday of arrival)
ETA (estimatedday of arrival)
Order Fulfilment
Buying / CounterSample InspectionBuying / Counter
Sample Inspection
1/11Releasing the
Buying / CounterSample
Releasing theBuying / Counter
SampleLab DipLab Dip Photo SamplePhoto Sample Size SetSize Set
1/12 1/13a 1/13b 1/13c
Lab TestLab Test
1/14
Production ReleaseProduction Release ProductionProduction
1/15 1/16
In-line Inspection In-line Inspection
1/17
End of Production / Final Inspection
End of Production / Final Inspection
Shipping / TransportRelease ETD
Shipping / TransportRelease ETD Shipping / TransportShipping / Transport ArrivalArrival
1/18 1/19 1/20 1/21 1/22
1 2
3 Technical hardware
Non technical hardwareTextiles
1
2
3
ArrivalArrival ETA (estimatedday of arrival)
ETA (estimatedday of arrival)
Buying Sample Inspection
Buying Sample Inspection
Releasing theBuying Sample
Releasing theBuying Sample
Photo SamplePhoto SamplePacking- &
Quality- SampleTest
Packing- &Quality- Sample
TestProduction ReleaseProduction Release ProductionProduction End of Production /
Final InspectionEnd of Production /
Final InspectionShipping / Transport
Release ETDShipping / Transport
Release ETD
Shipping / TransportShipping / Transport
2/11 2/12 2/13 2/14 2/15 2/16 2/17 2/18
2/19 2/20 2/21
Photo SamplePhoto SamplePacking &
Quality SampleTest
Packing &Quality Sample
TestProduction ReleaseProduction Release ProductionProduction End of Production /
Final InspectionEnd of Production /
Final InspectionShipping / Transport
Release ETDShipping / Transport
Release ETD
Shipping / TransportShipping / Transport
3/12 3/13 3/14 3/15 3/16 3/17
3/18
ArrivalArrival
3/20
ETA (estimatedday of arrival)
ETA (estimatedday of arrival)
3/19
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11. C.I.S. Screen Shot
MC QM Admin Supplier CustomerX
Description:The buying office passes all information received to the supplier. In some cases there are several suppliers requested to make the buying / counter sample
Execution: Depends on the request, photos per e- mail, sketches per fax or mail, samples per courier service
X
LINK to operational IT system
Special instructions
O
ffer
Sh
eet
Off
er S
amp
leB
uyin
g /
Cou
nte
rS
amp
le
Ord
er P
lace
me
nt
Re
lea
se o
f Bu
ying
/
Co
unte
r S
amp
le
Shi
ppin
g A
pp
rova
l
Fin
al
Insp
ect
ion
Pro
duc
tion
Rel
ease
Siz
eS
etLa
bD
ipP
hoto
Sam
ple
Pro
duct
ion
In-L
ine
Insp
.
Log
istic
s E
xecu
tion
Invo
ice
/ P
aym
ent
Finance / Administration
System Support: IPOS, PILOT, Target :AQM+
OrderFulfilment
OrderDevelopment
Auc
tion
Pro
-ac
tive
Off
er
Buy
er‘s
Req
uest
A
B
C
Buyer‘s Request
Auction
BO obtains offerby Supplier
Lab
Te
st
ProductrequestProductrequest
A1 ProducingCounter Sample
ProducingCounter Sample
Sending Counter Sample
Sending Counter Sample ......
A2 A3 ...
OrderClearing
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Comparison of important operating figures of KQIS and Li & Fung
1) There of several sales offices (London, Amsterdam, div. USA)
Turnover 2005 (in bn. EUR)
Offices
Countries
Number of suppliers
Number of employees
1,2
26
20
~2.000
~1.000
~5,5
731)
41
~7.000
>7.000
Advantages Li & Fung
Economies of scale for Li & Fung/much more buying power
Li & Fung with higher presence in sourcing markets
Longer payment terms for KQ
L&F is world market leader in international sourcing!
Li & Fung generates new options for the international sourcing – Countries, suppliers, more favorable buying conditions…..
12. Li & Fung
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Comparison of operative services of KQIS and Li & Fung
Headline
Quality Inspection
Documentation
Sourcing (fabrics, raw materials)
Financial Services (Payment)
Order-Management
Commission rate stays the same!
Volume Increasing –
Positive price effects
… as well as more services for KQ
13. C.I.S. Screen Shot
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Pudong Shanghai 1990
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15. Pudong Shanghai 2005
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16. How to describe Emerging Markets?
Fast growing
Polypol
High staff-rotation
Open legal frameBrand orientation
Labor intensiv
Resistant against mistakes
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Thank you for your kind attention
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Contact:
Carsten WolffManaging Director
KarstadtQuelle International Services AGProfessional Buying Services Worldwide Phone: +41-71-274 63 33Fax: +41-71-274 63 31Email: [email protected]