Meet Global Regulatory Standards with Amber Road

Hello and welcome to another episode of Fashion Made. Today I have the pleasure to be sat down with Gary Barracco, the Director of Global Product Marketing with Amber Road.

Gary, what a pleasure to be here and to see you here in the United States.

I know, it's absolutely amazing. We're here in New York on day 2 of our flagship Pye Apparel event. At the Union League Club.

Yeah, you know, this is my third or fourth year here at your growing event and looking forward to next year again. But the topics that I've heard so much about this year are all focused on the future. And I mean, I guess that's the innovation side of our product and our product development process. But I think that we also need to kind of rein ourselves back in and look at the issues that product development encounters that we aren't talking about, right? And that need to be challenged with technology systems. Amber Road as a technology provider is talking about digital supply chains and the digitization of data in order to ensure goods are flowing as you plan. One of the areas of that that we're seeing a lack of discussion in is that product integrity side. And then yesterday I met with a VP of product development and product integrity.

Okay.

So it's quite interesting to see that the title encompasses not just how to make the product, but actually how to make it with the quality standards the brand wants and possibly the product testing standards that are part of the regulatory process. Okay. And so they are concerned about that. The folks that are here are talking about that. So I think they're having their fun talking about all of this great virtual reality, 3D printing, and what other capabilities they have, but when it comes down to it, their day-to-day transaction is to get goods to the store and into the consumer's hands.

Yeah.

In order to do that, there's so much that's required. One of the areas we forget about is product testing and quality. These aren't just standards that the brand sets. They're also standards that the country of import, the United States, the UK, the EU, China set standards for product testing. And if your goods don't meet those standards, they're going to be stopped at the border. So all of the work that you do to build this great innovative product is going to just be flushed away if you're not meeting the standard regulatory standards for import and export.

Mm-hmm.

So what needs to happen is part of our innovative process is that we need to look at the way to manage those other process. These kind of might be underlying or backend or side stories to the product development process. But just seeing the representation of VP's title also containing the brand integrity aspect makes— it brings it to reality.

Yeah.

And so we know that more has to be done. And crossing borders today is a hot topic, right? On both sides of the pond, getting across that border, especially more so in the last few weeks. But it revolves around what we call protectionism, right? And there's this global tide of protectionism. Conversely, at the same time, retailers and manufacturers are looking for globalization. So how do we globalize our supply chains? Sure, we've been outsourcing for many years to Asia, but now we're globalizing our supply chains. And that means that, that we need transparency of data. And regardless of what country we're sourcing raw materials, finished goods, shipping to, selling into. And that's where globalization comes in. Yeah, but when you're putting up a wall for protectionism, you can't globalize at the same time.

Yeah, absolutely. They're contradictions, right? So how— as more and more products are made, huge volumes of products are being shipped all over the world, obviously with this globalization trend that we're seeing. How are the agencies dealing with this vast volume of product that's trying to get across the border?

Well, it's not just the agency, but then it's the importer/exporter, the shipper who's moving goods, right? So I've got, you know, suddenly a new tariff comes into play. Boom, July 6th, there's new tariffs, right? So the cost of my goods are now going to increase starting at that date. But are there other regulatory requirements? Not just product testing, but are there trade sanctions? Is there an additional duty or tariff? Am I limited to how many of these I'm allowed to bring in? So you might have a license requirement for all of those goods. To cross that border is going become more difficult. It's going to change, but it could change day by day, week by week in today's volatile trade environment. So, you know, there's all types of reasons. But when we think about it, your visit here to the United States, right? When you came in, the first thing you had to do to U.S. Customs was to present your passport, right? Yeah.

I had to wait for about 2 hours to do it as well.

So when you're no different than a shipment coming in from another country either.

Right.

So first you need to say, hey, here I am. I'm here. I'm a legitimate person. I'm not on somebody's blacklist. I'm allowed to enter your country legally at this point. And, and, and so I've presented my documentation. The same thing happens when we're importing goods into another country. Of course, we first want to say who's shipping and, and before we want to know what they're shipping.

Yeah.

And can they legally do business in our country?

Yeah.

The next thing you needed to do is you needed to get your suitcase and you needed to declare what's in your suitcase. Think of that as a shipment, right? So as a shipper, you're not physically with your packages, but you've presented them to customs in the form of your electronic documentation. And you've now said, okay, here's what's in my box. Would you like to see further? And in the US, CBP can pull that carton aside and open it and inspect it just like they can your suitcase when you come in. So really, if we think of that very simple analogy that we've all done many times is cross a border. We need to first declare who we are, and then we need to declare what we're shipping. And then they'll determine whether you have to pay a duty or excise tax on what you're bringing in or out of the country. Same thing happens with our shipment, but the regulations change more quickly with our shipments, right? And, and Amber Road actually publishes a weekly global trade management update, and hundreds of updates happen country by country every week. We really don't realize how much that changes until you look at it. So as someone moving goods globally for the need of globalization in a time of protectionism, we need to stay up to date on all of those changes that are happening. So I know that the goods this week are going to fall under this structure, but next week it might be a different structure. And so I need to be in tune to that. And it's really difficult to do that unless you have some sort of database that's feeding into your supply chain systems.

Yeah. And so you provide the information that's constantly updating?

Right. Amber Road has a team of global knowledge experts. It's part of our functional aspects, and our customers access global knowledge for the countries they're importing and exporting into. That global knowledge tells them about duty restrictions and tariff and any other type of import/export regulation that they're going to fall under. Okay. But it actually floats into the cloud platform and actually fills in where you're doing functions. So suddenly today You're going to go create your import documentation for something coming out of China, and the system will automatically tell you what those requirements are.

Okay.

This is what you need to get goods, move goods, and continue moving your goods. Because in this retail environment, the consumer is waiting, right? And we know that the consumer is watching nowadays. They want full supply chain visibility. Where's my package? And the consumer could be a wholesaler or retailer, and you're the brand fulfilling that. Or it could be a one-on-one consumer buy, right? Maybe from your your dot-com site.

Yeah.

Crossing borders is probably the most critical aspect of a supply chain today.

Yeah.

And yet so many are focused in other areas because we need to, once again, minimize the cost and maintain compliance and be most innovative in the marketplace. But we need to place that same emphasis on border crossing.

Absolutely. Absolutely. I mean, it's obviously key. If you can't get your goods there, you're not going to sell them.

Right. Right. And if they're delayed getting to market, you're going to lose that opportunity, right? Because the competitor's right there and they've got a knockoff and they've got a cheaper price. I often talk about our consumer trends today and see where they come from and being able to meet that demand. And of course, I use the royal family for that as an example.

Okay.

Or any of our other Kardashian celebrities here in the United States. Right. So say Meghan, Meghan Markle steps out in a new dress. Everyone wants that dress. When can I get it in the store? So as a fashion retailer, it's like, oh, I want to knock that off quickly. How can we get it? How can we get it into the marketplace? And so that's a flash in the pan, right? But I can, I can make some, some quick bucks in order to do that, right? But if I can do that, so achieving that fast fashion success, that's, that's based on something we see in our culture and society. It's only going to last for a little while because 3 weeks after it's going to be forgotten.

Yeah, absolutely.

So I can make the goods fast, right? I can, I can get them, I can air them to the location, but if I can't cross the border, I'm stuck.

Yeah, of course, right? So how big is the Amber Road network of experts?

Um, we have about 180 global knowledge experts all around the world, and each of them have proficiency in specific country or region.

Yeah.

And they study the trade regulations, they have their finger on the pulse. Sometimes they might have connections within the government also so that they can get the most up-to-date information. Yeah. And so that's globally. Within China, we have a specific team doing China trade management, as China has provincial regulations also. And as we see the rise in the middle class and consumer base in China, we see more demand for that also.

Okay. You expanding the team? I mean, how long has it taken to get to 180 people?

No, I mean, over the years it's grown, and we're probably at the point where we're, you know, sufficiently efficiently staffed with our trade experts, but they continue to need to look for regulation changes. Just look at the last couple of weeks and we'll see what's going on. You know, here's my tariff. Oh wait, I'm going to— I now I'm going to add another 200, right? And this back and forth tit for tat that we're seeing between the US and China is just making these guys so valuable, right?

Yeah.

Trade content specialists are really calling the shots in today's world.

I mean, not to it's almost quite good for you guys that it's so chaotic at the moment. I mean, if it's, if it's ever changing, then the need for more up-to-date knowledge specifically on this particular area.

Right. But it also shows the importance for trade automation itself. Yeah, that I can't do it by just following these manual processes I followed for so many years. I've got to automate these systems. I need smart tools to do that. We're moving into that digitization discussion. Some also call it digitalization.

Yeah.

But what we're really talking about is data, right? And we're digitizing data. We're sharing so much data. If it's not digital, I can't compress it all together and give you the content that you need at the speed that you need it. Supply chains work fast. One thing I've learned working in supply chain businesses Every supply chain executive will tell you how stressful their job is, right? They love it, but it's stressful. When you come to an event like this, you see they're kind of stressed out, always, you know, checking their emails. They're never away from the business while they're still trying to learn and move forward with future innovation. And that's because of the speed that supply chains are moving at, right? If it was the 1800s where the consumer expected, oh, it'll take me a month to get that new dress to you, right? Because they have to sit and sew it by hand, as opposed to today's speed of supply chains has increased so much that there's more stress placed on the manufacturer, importer, exporter.

Okay.

So that's how they live their life.

Yeah.

Automation can take some of that stress away, right? You're going to rely on smart automation tools, digitizing your data, and sharing that.

With all of these different components, I mean, how do you guys actually tie it all together?

Well, first of all, the Amber Road platform spans— I say it's deep and broad, right? Broad and deep, like the ocean. So we start very early in the product lifecycle by allowing functionality, a platform for functionality, to start with the product concept and the design, bringing in from PLM systems all of that data about the product, working with the supplier, collaborating with suppliers, auditing and vetting suppliers, and then commercializing that product. How much will it cost me to bring it to market? How much can you do it for? Can you do it in this time frame? All of that collaboration would have been done by email, and now we're moving that to this web-based platform for shared visibility. We then look at the move into production, and we're tracking production. I, I've got orders coming in. Where's my goods? How much have you completed, have you cut, have you finished any piece of this. Once goods are ready to be shipped, then part of that platform is the logistic aspect. I need to book a shipment, I need to get it from point A to point B, but I need to watch it, I need to track that it's going. I can't watch everything, I can't, I need to only manage by exception, right, tell me what's going wrong. That's inherent in the platform also. So as we're going broad still, then we move into our import and export, right? And this is where these regulatory processes come into place. Do you have a certificate of compliance to show that it went through its product testing? Do you have your documentation on the supplier that made this and tell us more about them? And all of that documentation, how much is the duty on that? Are you paying that duty? Have you you know, have you declared this as a preferential trade option? Right. And if so, show us the documentation that this was made under the guidelines of a true free trade agreement. All that has to be managed somehow. Historically, it would be managed in disparate silos.

Yeah.

Here's your PDM, your PLM, a supply chain system, a transportation system, and maybe a duty management platform or just Excel spreadsheet. Right? You can take all of that and then you can combine all of that data once digitized, and you can put that into a consolidated platform and you can share that out across your network. Your trading party network needs to go deep, and this is where the deep comes in, right? Is I need to have my tier 1, tier 2 suppliers. Today we presented a think tank session with one of our customers that talked about managing material down to the tier 3 supplier level, right? Because they need to be concerned about where the commodity is that's going to feed into their raw material that feeds into their, their finished good factory. Because otherwise, the supply chain could break, or there could be additional cost to it. By doing that, they're alleviating that. So we're also pulling in those carriers, the ocean carriers, the air carriers, and trucking carriers, right? Over-the-road trucking for that first mile, last mile, right? Now, now that it's off the boat, I need to know where it is on the way to the distribution center, to the store, or to directly to the consumer. And so pulling that data from all those carriers together is important. And last, having the capability to do electronic filing with your customs agencies and to see what the needs are for each of the customs agencies. I'm bringing this product in to this country from this country. What are the requirements? That's where the global knowledge team fills in. So broad from end to end, starting at design to receipt, and deep down to your tier 3 suppliers, your carriers, and your import and export agencies.

That's very clear. Yeah, when did you come up with that one?

I've been talking about that for over a year now. So broad and deep. I remind everybody it's broad and deep.

Yeah, well, it works really well. It works. I'm actually interested in, in that because you were saying, I mean, coming back to the beginning of the conversation, you were talking to the VP of Product Development and Product Integrity. Was that correct?

Yeah.

Um, this is one guy who clearly has a— or lady— who has a lot of different hats on his head, right? Right. And there's a lot of also different people along that value chain, um, who are all concerned with all of those different aspects. So this is all tying into company-wide PLM software, or, or is this just riding over anything?

Right. So it's bringing in all of those other systems and pulling in data from those other systems that still may be siloed, but we're breaking down that silo data and pulling that into a consolidated single version of the truth platform.

Yeah.

And at Amber Road, we call it global trade management. Yeah. Because truly, you know, 10 years ago, global trade would have just been that whole moving of goods and getting across the border.

Yeah.

Truly, all of this This is global trade, right? Even making the product is global trade, right? So all of it goes back. We're, we're all trading globally, and this is a massive network, and we need to manage all of that. We have our individual teams that will be doing that. So again, they need to manage by exception. I can't, I can't keep track of everything that's going along. I love to envision a big old NASA control room. right? And you have— that's how your supply chain— if all your supply chain people were in one room, it would look like that. Hundreds of folks with computer screens on all of them, and up there on the wall is this massive screen that's showing movement of goods, right? It shows things happening over at the factories, right? And there might be some color coding going on, right? And there's— oh, there's a red light over here at the factory. Something's happening. Maybe maybe their production has slowed down, maybe they have an electrical outage for the next 2 days and now they can't make anything. I can watch the goods moving across, right? If I could envision that and see that, I think it would be really cool to replicate. It doesn't happen that way, so we need to do that in a computer screen, and that computer screen needs to move to an iPad, and I need to get alerts to my mobile device as well, right? So that's the supply chain business of today. That's how we're going to provide that stress relief to the VP that has so much going on that they can only deal with the exceptions that are escalated to them. That's the true digital global trade management. You know, in the end, we're improving cost, looking at efficiencies and other ways. We're reducing risk, which is typically inherent in a supply chain, and especially a global supply chain adds more risk. And these shifting tariffs and duties that The political issues that we talked about are another risk. And then the other aspect is agility. Agility is so important because I talked about consumer demand, and consumer demand could be so fickle, right? So as to, I need that Meghan Markle dress now, or I'm over it. And so that demand is going to shift as well. So all of that comes into play. So agility is the last piece— cost, risk, and agility. Achieved through a digital global trade management solution like AmberRoad.

Well, Gary, thank you very much for coming and talking to us today. It's been a pleasure sitting down with you.

Safe trip home. See you next year.

Thank you very much. Cheers. Everybody get up.