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    Retail Systems: Continued Boom in Private Label Manufacturing Predicted

    CHICAGO -- At the Retail Systems show at McCormick Place here yesterday, Intentia, a global enterprise solutions provider for the manufacturing, distribution, and maintenance industries, with U.S. headquarters in Schaumburg, Ill., laid out five trends in the retail industry that provide key opportunities and significant challenges as retailers' role in the supply chain significantly increases as a result of steady growth in the private label manufacturing industry.

    CHICAGO -- At the Retail Systems show at McCormick Place here yesterday, Intentia, a global enterprise solutions provider for the manufacturing, distribution, and maintenance industries, with U.S. headquarters in Schaumburg, Ill., laid out five trends in the retail industry that provide key opportunities and significant challenges as retailers' role in the supply chain significantly increases as a result of steady growth in the private label manufacturing industry.

    According to the Private Label Manufacturers Association, private label brands account for one out of every five items sold every day in U.S. supermarkets, drug chains, and mass merchandisers. These brands represent more than $50 billion of current retail business, and are reaching new levels of growth each year.

    "As the private label sourcing industry continues to grow, the line between retailers and suppliers becomes blurred. Retailers become quasi-manufacturers and have to oversee initiatives previously outside of their domain, such as supply chain, logistics, distribution and tracking," noted Bob McKee, Intentia Americas' fashion industry solutions director.

    "With this responsibility come the need and knowledge for supply chain visibility, management systems, and the understanding of how to effectively source goods in a global economy," added McKee.

    The top five industry trends facing retailers as they evolve into manufacturers are as follows:

    --Stocking tomorrow's trends today: In today's demand-driven economy, consumers are accustomed to receiving immediate gratification, which means shorter product life cycles. Manufacturers that maintain comprehensive and accurate product forecasts can meet customer demand to build brand loyalty.

    --Stitching the global landscape: With the abolition of trade quotas, manufacturers are facing increased global competition and an opportunity to look for new partners. U.S.-based manufacturers should assess supply chain operations to ensure their effective use. The cost of goods and time to market are critical to profitable operations.

    --Avoid inventory glut: Seasonality in retail manufacturing can create a high risk of inventory exposure, which for quasi-manufacturers directly affects profits. Effective management of the product mix, both seasonal and nonseasonal items, can counteract this danger.

    --Regulations change; compliance is key: Fines can be harsh for violators of new federal and state legislation for human rights, environmental concerns, and Homeland Security standards. Manufacturers need to dedicate resources to ensure compliance, both internally and within partner operations, and to make sure that quality and delivery guidelines are also met.

    --Manage complexity: Global manufacturing is a complex set of business processes that connect languages, currencies, time zones, and regulations. Don't underestimate the complicated nature of the entire supply chain, from raw material to finished product. Using systems to harness the processes and data can mean the difference between staying in business and business failure.

    McKee will additionally take part in a panel discussion of inventory management at Retail Systems on May 26 at 12 p.m. CT in Room E253A at McCormick Place.

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