Fossil integrates retail, wholesale operations
The global watch and accessory company wanted to integrate information systems for its growing retail operation with the SAP software environment that supports its wholesale business.
Fossil, based in Richardson, Texas, is a global company specializing in the design and manufacture of watches and other fashion accessories, which it markets under the Fossil, Relic, Michele, Zodiac, and other brands. The company employs over 10,000 people and generates annual revenues of approximately $1.25 billion.
Founded in 1984, Fossil originally concentrated on wholesale distribution of its products in North America, Europe and Asia. The company also began to develop and manufacture products for prestigious brands such as Burberry, Diesel, DKNY and Emporio Armani.
As the business grew, it became clear that the company needed a centralized enterprise resource planning solution. Fossil chose the SAP Apparel and Footwear application, to manage its wholesale business, developing electronic data interchange (EDI) interfaces to connect its systems directly to large chains like Walmart and Macy's, and B2B systems to help sell to smaller retailers.
Meanwhile, Fossil had also started to investigate other distribution channels, launching one of the earliest e-commerce sites on the Internet. It had begun to experiment with retail outlets as a means to build the brand, gain direct contact with consumers and test new product ideas. The company was soon operating more than 160 stores in the US, Canada and the UK.
"At first, we decided to outsource the IT systems governing our retail operation, and treat it as a customer of the wholesale business," explains Ed Jurica, CIO of Fossil. "But as our retail interests grew, this became a less tenable strategy. We wanted a solution that would interface easily with the SAP applications that managed our wholesale business."
Fossil considered a number of solutions designed for the retail industry, but found that almost none of them could meet its specific needs, as Ed Jurica explains:
"Most of the solutions on the market presumed that retailers own their own warehouses and inventory. But in our case, the warehouses are owned by the wholesale business, and the inventory is shared between the wholesale and retail operations. We needed a solution that would be flexible enough to handle the shared inventory, without requiring a lot of expensive customization work."
