VF CORPORATIONS GLOBAL SUPPLY CHAIN STRATEGY

OVERVIEW
VF corporation is a global lifestyle apparel company with strong brands. VF has acquired many
brands and is taking great pains to retain the cultures and unique identities of the acquired
companies. VF sells its products through Independent stores, department stores, national
chains and mass merchants.
THIRD WAY SUPPLY CHAIN STRATEGY - RECOMMENDATIONS
The third way is a half point between full integration and traditional sourcing. It forms true
partnership between VF and the suppliers. The company can remain profitable and can create
new departments in the process. For their rapid expansion plans, traditional sourcing or
internal manufacturing would not be cost effective.
COST ANALYSIS
Comparing the cost effectiveness of all the three VF owned, Packaged sourced and third way
the average of Third way pricing would be (7.06+6.96=14.02/2=7.01) , VF owned= 7.48,
Packaged = (7.10). As the number of departments increase, Third way could prove to be cost
effective. It costs 6.7% less than traditional sourcing.
LONG TERM RELATIONSHIP
Not only in terms of monetary value, but it would also improve the long term relationship with
the suppliers. Joint production schedules and shared order forecasts would reduce the chances
of overproduction. In addition, VF engineers and the supplier can work together on process
improvements. Since each supplier is producing only a specific product, it can lead to creating
better and authentic products.
Third way strategy would lower the production cost, lead time reduction and quality
improvement. The VF plants already have the best internal manufacturing capability in terms of
quality, efficiency and reliability. Company can employ both VF manufacturing and third way
approach. Apparel production can be done by overseas third party approach. It is ideal for new
manufacturers. But for conventional jeans, it makes sense to produce in house since it has
shorter lead time.
PROBLEMS AHEAD
Marketing departments concern
Manufacturing organizations current workers job security
Maintaining intended quality standard
Flexibility of supply chain
Staffing issues