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The Challenges in Global Supply Chain Strategy of VF - Research Paper Example

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The author states that VF has a global supply chain and they are increasing the network of supply chain throughout the world. This report describes the various challenges in the global supply chain strategy of VF and provides a recommendation to improve the “Third Way” supply chain system globally. …
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The Challenges in Global Supply Chain Strategy of VF
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Download file to see previous pages VF produces apparel products from its own manufacturing plant as well as acquires apparels from other suppliers. The outsourcing strategy of VF focuses on flexibility. VF possesses strong manufacturing capacity and it can also outsource from suppliers to improve the manufacturing process and thus reduce the cost of production. The suppliers of clothing industry use term contract to produce a particular garment in particular quantity. This strategy helped VF to shift production among suppliers in different locations for optimizing cost and respond to the changes in any business conditions such as changes in tariff or exchange rates and other factors related to cost. VF had responded to the market condition and implemented “Third Way” supply chain strategy to gain the advantage of both in-house manufacturing and outsourcing as well. VF had two critical elements in the growth strategy which were to expand sales outside the US and expand the ‘direct to consumer’ business. VF had faced challenges in supply chain strategy which are to preserve the organizational cultures and maintain VF’s unique brand identities. It was difficult for VF to keep the design groups together (Pisano & Adams, 2009).
A major challenge for VF was the influence of large mass retailing chains in the apparel distribution channel. Several large retailers developed and started to market their own brand under their own private label. For example, Walmart, one of the largest jeans retailers of the US had launched jeans under their own brand. The apparel companies mostly concentrated on design and marketing rather than production. The production was generally a labor-intensive method which had several disadvantages. This enabled the garment companies to outsource the production of their design in high competitive terms (Pisano & Adams, 2009).  ...Download file to see next pagesRead More
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