Vf Brands: Global Supply Chain Strategy

In: Business and Management

Submitted By hikari89
Words 533
Pages 3
VF Brands: Global Supply Chain Strategy Historically, VF had been an apparel manufacturer, so it was proud of the internal manufacturing capabilities and believed that those capabilities offered the company a significant competitive advantage. For VF’s heritage businesses, jeanswear and imagewear, 60% of which production was mainly targeted at the US market. Hence, the company should focus on quick response, rapid replenishment, and low cost. So, VF should take “cut and make” (CM) contracts. In such case, VF stroke separate contracts for suppliers at each stage of the production process and coordinated the flow of product from one supplier to the next one. Therefore, VF could maintain very tight control over costs at each stage and remain total ownership of supply chain. On the other hand, VF used outsourcing for 100% of its lifestyle apparel, footwear, and backpacks. These product lines were acquired by VF recently so their supply chains were more globally diversified. Also, lifestyle brands have very short life cycle, so product design was considered “king”, in these product lines, cost was not a critical issue. There were significant differences in product requirements across regions. For example, jeans were considered as a non-fashion clothing item in the American market, while in Europe, jeans were worn as a fashion clothing item and the prices were much higher than those in America. After taken these factors into consideration, I recommend that VF use the second approach, “package sourcing” contracts. Under this type of contract, a single supplier took full responsibility for the entire process from raw materials to finished goods and shipping to the customers. In this case, VF did not have ownership of the materials along the process. However, the company could react fast for international customers and get access to much cheaper labors in Asia. Besides…...

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