CBX Software: A Tacit Helper of Global Retailers

  • By Mark Hudson

    Written By: PJ Jakovljevic Date Published: 

    One enterprise software company that is a regular fixture at the retail supply chains related events, such as the NRF Retail’s Big Show & EXPO, is CBX Software. Founded in 1995, the enterprise software company has achieved significant success through its cloud enterprise software service specifically designed to facilitate retail merchandise sourcing and supply chain automation. CBX Software currently has some 230 employees in its offices in Hong Kong, San Diego, Munich, Shanghai, and Taipei.

    The company’s current customer base consists of more than 20,000 suppliers and over 90 Tier One and Tier Two retailers, brands, and trading businesses. This includes some of the largest retailers in the world, such as Dollar General, Target K-Mart Australia, PetSmart, REI, El Corte Ingles, Albertsons, Target Australia, and The Warehouse Group, among others.

    These large global companies manage billions of dollars in merchandise sourcing through CBX Cloud. The most recent CBX wins include Tractor SupplyPetco, Ace Hardware, Tefron, and Pets at Home.

    CBX Software’s Value Prop

    The company’s flagship offering, CBX Cloud, can be deployed either as a full end-to-end suite or it can broken out into its components: Product Lifecycle Management (PLM); Supply Chain Management (SCM); Pre-PLM;  Global Trade Management (GTM); Vendor Management; Sourcing Management; Quality & Compliance Portal; and Critical Path Management (i.e., product production management). The most recently added capabilities are as follows:

    • What if Costing analysis;
    • Cost/Quote comparison;
    • Pre-PLM (i.e., line/range planning, mood boards, trade show/buying trip capture);
    • Mobile Inspector and Quality & Compliance Portal (with links to major testing, inspecting, and auditing firms)

    While CBX Cloud’s primary strengths are Petail PLM (or General Merchandize PLM) and sourcing, the TradeBeyond module is a supplier network/marketplace. TradeBeyond supports Pre-PLM activities for buyers and category managers: it helps them select line plans or plan ranges and themes, share mood boards, and capture inspiration in the field while on buying trips or at tradeshows.

    Ultimately, the TradeBeyond module is an app where retailers and suppliers can connect to share and source products. Basically, it does all of the legwork before a product goes into full PLM mode. Once a buyer finalizes the line plan or range for the season, the info will go from TradeBeyond into CBX Cloud without entering in duplicate info (product info, costing, supplier info, factory info etc.).

    TradeBeyond is not exactly like what CBX’s main competitors Centric Software and Bamboo Rose offer. They both have a closed network (i.e., one-to-one–retailers to their own suppliers) relationships. By contrast, TradeBeyond is an open network where retailers can connect with their own suppliers or new suppliers in an open manner. It allows suppliers to post products and get connected with retailers with whom they don’t currently do business.

    Think of it like Alibaba with the difference being that the suppliers in TradeBeyond have been vetted and used by multiple retailers for many years. These certified suppliers on TradeBeyond are not your typical suppliers (ones that produce products in small quantities for “mom and pop shop” retailers such as are found on Alibaba). Instead, these are suppliers are used to producing quality products in mass quantities for billion dollar retailers around the world.

    Competitive Landscape (and Partners)

    In addition to the two aforementioned main competitors, CBX might also compete with Aptos, Infor CloudSuite Fashion, NGC Software, and others. CBX is not really competing in the global supply and trading networks space where Infor Nexus, OpenText, or SAP Ariba are. When going up against its direct competitors in the larger multi-billion accounts, CBX wins due to its track record and references. About 60% of the vendor’s client base is over $1 billion in revenue. CBX is able to win with its consistency, its track record, its ability to show capabilities that are real, along with an ability to show a clear roadmap that doesn’t overpromise.

    In theory, CBX could compete with the pure fashion PLM software providers such as PTC, Dassault Systems, Lectra, or Siemens PLM Software. But, PTC’s FlexPLM offering is set up rather for apparel design and materials management, and not really for supply chain/sourcing. The CBX Cloud and FlexPLM are thus integrated via the PTC ThingWorx connector. The info from CBX flows back and forth with FlexPLM (see Figure 1 to see the flow and functions that both systems cover). In addition to PTC, CBX’s major global partners are SGS, Microsoft, AWS, and Tata Consulting.

    A Discussion with a CBX Executive

    To dig a bit deeper at CBX Software and the issues its customers typically face, we recently spoke to Mark Hudson, who joined CBX in 2017 and is Vice President of Global Marketing and Communications. He holds an MBA in marketing, is a GS1 Standards Professional, and holds a CIM data certification in PLM Leadership. Hudson has over 20 years of marketing experience including product innovation and supply chain strategy for both private label and national brand products. Recently his focus has been on the connection and collaboration between retailers, manufacturers, and their trading partners.

    General Retail Product Design and Sourcing-Related Issues

    TEC: How has procurement/sourcing as a practice changed in the past few years?

    MH: The practice of procurement/sourcing has showed steady changes in recent years, with the bulk of changes coming within the last year. The past year has seen uncertain times for retail sourcing, uncertain in many ways, driven by the impact of trade tariffs, sudden shifts in consumer trends, and spikes in demand, all causing temporary bottlenecks in the retail private label supply chain.

    These uncertainties cause swift reactions within the retail community—reactions such as finding ways to bring products to market faster and more cost effectively. With these reactions, retailers are starting to look for compliant factories outside of their normal sourcing destinations, which can produce quality products at competitive prices. This is a drastic shift from the way the retail industry has conducted their procurement-sourcing operations in years past.

    TEC: How and why has global sourcing become an important strategic function at the fore of business (rather than just an added extra)?

    MH: As retailers continue to invest and look for new ways to enhance the consumer experience they also need to cut costs out of the supply chain and they have put a lot of emphasis on finding new ways to compress the supply chain. I find that the most folks in the retail industry are getting ever more interested in learning about the latest technologies that can help cut supply chain/sourcing cost and automate the process.

    Changing Technology in Retail Supply Chains

    TEC: How have digital transformation tools in general changed retail SCM, PLM, and global sourcing practices?

    MH: In a nutshell, those tools have done that by bringing together internal and external teams in a data-driven environment with one source of the truth and real-time updates. New products, updates/changes, costing, supplier info, etc. can all be accessed from the cloud and, in most cases, can now be accessed via mobile devices.

    TEC: What benefits and challenges would you discern from using those digital tools?

    MH: As for the potential benefits, I would mention speed-to-market, costs savings, the ability to respond and address issues earlier in the process, operational efficiencies, and private label scalability. On the other hand, as for the challenges, most industries are unique and require niche systems to be set up for their business. (Examples include food, general merchandizers, apparel, automotive, aerospace, etc.) The biggest challenge is selecting the right solution provider who can support the client’s needs and business processes. In addition, new technology in general causes a culture shift, especially in retail.

    TEC: Does automating or digitizing certain parts of the process result in cost savings? And if so, how?

    MH: By bringing more products to market faster (which equates to a reduction in lost sales) and fewer errors in production (which can come with lots of added costs). They also leave more time and resources for staff to get on with more value-adding tasks, such as not needing to add to their headcount when increasing assortments/product stock-keeping units (SKUs), reduction in overall supply chain costs, and fewer man hours for buyers and suppliers than when working with manual spreadsheets/emails.

    TEC: What are the benefits of moving procurement/sourcing operations to the cloud?

    MH: As I mentioned earlier, new products, updates/changes, costing, supplier info, etc. can all be accessed from the cloud and via mobile devices. To expand a bit, the cloud deployment gives all stakeholders covering sourcing, supply chain, and product lifecycle the ability to gain real time insights and updates to the products being sourced, in development, production, the samples being in progress, quality, compliance, and shipping.

    TEC: What are the benefits of incorporating blockchain into the procurement/sourcing/PLM operations?

    MH: The main benefit of incorporating blockchain is to secure highly classified information (i.e., costing, supplier authentication, product, trend data, etc.). Blockchain services support a large infrastructure and blockchain protocols help to encrypt large amounts of sensitive data into secure blocks. These secure blocks of supply chain data are permanently recorded and cannot be changed by any stakeholder in the supply chain nor can anyone outside the chain view the information without being invited by the initiator, which in our case is the master retailer.

    TEC: Cybersecurity is of course a top priority for any institution or company undergoing a digital transformation journey. What strategies and technologies do you recommend to foster strong cybersecurity practices and mitigate risk?

    MH: We are recommending Microsoft Azure’s Blockchain Service as one of the top cybersecurity practices to protect sensitive data. CBX just completed our Microsoft Azure Partnership/Microsoft Gold certification and we are continuing to migrate our customers from AWS to Azure.

    Some Examples from CBX Customers

    TEC: What technology or technologies have your clients used to transform the sourcing/PLM function at their businesses?

    MH: All of our clients use CBX Cloud. Whether they use the entire platform (end-to-end) or just portions of it (development, sourcing, quality, or production tracking for example) depends on the client and their immediate needs. Typically, our customers first use CBX Cloud Sourcing (i.e., product quotations, sample management, and committed order tracking) for Phase One of the project, and then roll out the CBX Cloud Development portion (i.e., product planning, specification, and costing) for Phase Two at a later stage.

    TEC: How does CBX help clients with sourcing and PLM-focused needs? Could you please tell us about an example of a client’s expansion strategy and how it was supported by CBX Cloud?

    MH: The Warehouse Group uses CBX Cloud to transform its PLM and sourcing operations. The company wanted to increase its private label assortments and in turn source more products. The Warehouse Group has now seen over double digit growth in sourcing since the late 2016 go live.
     

    A Final Prediction

    TEC: What does the future seem to hold for SCM, PLM, and procurement/sourcing as practices and technologies?

    MH: I believe the future is in a combined SCM and PLM software solution with a separate pre-PLM technology that feeds into the combined sourcing and product lifecycle platform. As mentioned earlier, pre-PLM is all about collaborative line/range planning, mood boards, buying/trade show trips, inspiration capture and sharing, etc.

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