Red Star Traders is a direct-import manufacturer that began life by importing from overseas manufacturers and selling to large retailers. Along the way, it began carving out a market niche in the area of online commerce for those same retailers. It found particular traction in the home-decorating space, says Vainberg. Today, it focuses on supplying the top 25 electronic-commerce retailers, in addition to working with various channel partners.
Red Star’s biggest challenge lay in managing inventory for its distribution base. It retains title to goods until they arrive at the consumer’s doorstep, creating a potential drag on the company’s balance sheet.
The company was also faced with needing to achieve visibility of inventory across the entire supply chain. It had to be able to see resellers’ forecasts, pull their orders into its system, handle fulfillment and transmit that demand to production facilities, which were mostly overseas. Factories would then manage the product “in as real-time as possible,” Vainberg says.
Red Star operated for a time with “very little visibility,” relying on QuickBooks and Excel spreadsheets. In searching for a workable enterprise resource planning system, it found most major vendors too big to service its needs. For a time, it even considered home-grown customization of an internal system. Finally, it went with an application from NetSuite, because of that vendor’s distributed model and ability to offer a highly customized product.
The switchover was “extremely” disruptive, Vainberg says, taking longer than anticipated. The biggest issue was electronic data interchange (EDI) integration with its largest fulfillment provider. But the results were ultimately positive. “In the long term,” he says, “we were able to get all departments in the company to access data based on the way they needed to see it.” In addition, Red Star could tap directly into resellers’ sites, drastically reducing data-entry procedures.
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Keywords: supply chain, supply chain management, inventory management, inventory control, supply chain planning, retail supply chain, sourcing solutions, supply chain risk management