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The retail powerhouse, long revered for its quality standards and processes, sets the bar once again in the complex, evolving era of global supply chain management.
"It's All Inside."
The J.C. Penney mantra was in the spotlight last month as part of the retailer's Times Square "JCPenney Experience" marketing extravaganza, which highlighted its growing stable of private and exclusive brands.
"It's Around the World" might be a more appropriate motto for JCPenney's supply chain infrastructure-the teams of people, the quality laboratories, the transportation providers and technologies that work in tandem with internal and external resources worldwide to get JCPenney products to market.
For this part of JCPenney's business, success is all about quality (supplier management), quantity (global trade management) and speed (time to market).
Peter McGrath, executive vice president of JCPenney and chairman of the JCPenney Purchasing Corp. subsidiary, is responsible for product development, quality and sourcing. A member of the executive committee of the U.S.D.A. Cotton Board, he is a former chairman of both the United States Association of Importers of Textiles and Apparel (USA-ITA) and the National Retail Federation's International Trade Action Committee.
He recently stepped down from the two chair positions to focus more attention on the creation and development of JCPenney's private label products. He discussed some key priorities with Apparel.
Shipping direct: speeding goods to market
JCPenney has raised the bar for the retail industry when it comes to supply chain collaboration. Its direct-ship initiative is a prime example.
In 2003, JCPenney established a factory-to-store system for certain items, through which suppliers ship products to JCPenney weekly, within five to seven days of receiving orders. Through this process, the retailer has created a direct link with many of its private label merchandise suppliers, allowing it to order merchandise as needed in response to demand, instead of at regular, pre-established intervals. The suppliers produce the goods in response to incoming orders in a few days, instead of producing apparel far in advance and storing it in warehouses.
One benefit is a significant reduction in stockouts. Another is a reduction in the time it takes to get an idea for a product into the store. The concept-to-consumer cycle used to take two years. That has been chiseled down to 45...