VF BRANDS CASE STUDY

Abstract

The essence of this case is basically to examine the supply chain strategies made by the VF Brands. Historically, the VF have been combining both conventional arms-length and in-house sourcing arrangements. During the time of this case, the management authority used to take into consideration the third approach to their supplier relations which entail fostering more cooperation and partnership. The objective of this ‘third way’ method involved assisting the company in creating a sourcing relationship which takes into consideration some of the vertical incorporation virtues which in return streamlines the sourcing process.  It is these sourcing arrangements which are continuously examined in the operation literatures and in other day-to-day business operating practices. This then means that there is the need of doing an in-depth examination of all the arrangements made by the company as well as developing a clear understanding of some of the trade-offs which are involved (Gary & Pamela, 2009).

Background

VF Brands is one of the largest publically owned clothing business organization in the world. The company mainly markets its commodities under brands explicitly, Timberland, Wrangler, North Face, Nautica, Lee, and so on. The company mainly sells its merchandizes to departmental stores, specialty stores, mass merchants, and national chains. Conversely, the marketing of its products is done through other direct-to-customer channels which consist of VF internet sites and other operated stores. The centralized world supply chain organizations of the company have the responsibility of manufacturing, procuring, as well as delivering goods to its customers. The VF Brands not only outsources its production activities but also takes the opportunity of in-housing their production involved (Gary & Pamela, 2009).

Nevertheless, the company mainly operates production facilities in several countries such as in South and Central America, Mexico, Europe, Caribbean, and United States. A large percentage of occupational apparels and denim bottoms are produced in these plants. These plants also manufacture footwear and other products but in small percentage. The general combination of the VF contracted and owned production together with the cost structures and geographic regions is the one which have been assisting the company to have a flexible and a well-balanced approach to product outsourcing. Despite the challenges that the company is facing currently, the intention of the management authority is to continue managing its supply chains international perspective. This is also concerned with the need of adjusting its supply chain approaches in the world production environment involved (Gary & Pamela, 2009).

Issues

Regardless of its continued production and marketing strategies, the company is currently facing a lot of issues which the potential of threatening its day-to-day operation. One of the issues the company is encountering is the implementation of the ‘third way’ approach. Basically, the cold reception from the existing suppliers is an obstacle for implementing this approach since the majority of the experienced suppliers are not willing to share information concerning the short-term contracts that they receive. Another issue is that garment production is a labor intensive activity. other than completion resulting from the absence of barriers of entry into the industry, quotas and the ever changing tariffs is another issue which have been hampering the production activities of the company involved (Gary & Pamela, 2009).

Analysis

The production process of the company, including, seeking suppliers, designing of products, and so on, is what have been making the lead time difficulty. This is also coupled with the absence of trust and coordination between apparel companies and suppliers hence resulting to higher inventory and longer lead time.  This is what has compelled the company to come up with other means of reducing costs and its lead time in the modern competitive clothing market. Other than the challenges concerning the company’s ‘third way’ approach, and the lack of trust and corporation, it should be noted that production of apparels is a labor intensive activity which offers few production scale advantages. The reason for that is because there are only few barriers of entry into the industry hence increasing the level of competition. The apparel production in the clothing industry is also subjected to ever changing and complex quotas and tariffs. The effect of this is that the company keeps of incurring huge production expenses (Gary & Pamela, 2009).

 Recommendations

In order to improve the line of production, the management authority should ensure that they have made an agreement with suppliers for specific line as well as committing to volume forecast for a duration of years. Such an agreement will also involve coming to terms with suppliers so as to ensure that they are not producing similar products. Suppliers can also decide to dedicate their production lines to the VF Brands’ products as well as investing in other business such as machinery, building and so on (Jay et al., 2014).

Labor supervision, equipment management, administrative infrastructure, and are also some of the strategies the company can use in managing its production and marketing activities. The company and suppliers should also ensure that they have developed joint production schedules so as to assist in meeting the needs of each partner.  There is also the need of sharing engineering resources so as enable the company to enhance its manufacturing process. Suppliers should be in the position of passing a portion of some of the savings obtained to the company (Jay et al., 2014).

Conclusion

To sum up, it is clear that the company have the opportunity of improving its garment manufacturing activities. This is coupled with the need of making extra investments in specialized equipment as well as acquiring more capital when need arises while suppliers owns equipment and the factory. Consequently, this will be aligned with the need of utilizing the company’s purchasing capacity so as to enable suppliers to acquire raw materials at cheaper price. The company can also take this opportunity through buying back some of the unexploited raw materials.

 

 

 

 

 

 

                                                            References

Gary, P & Pamela, A. (2009). VF Brands. Global Supply Chain Strategy. Harvard Business School Publishing.

Jay, H, Barry, R, & Chuck, M. (2014). O P E R AT I O N S MANAGEMENT: Sustainability and Supply Chain Management. Pearson Education Press