This document provides an overview of the supply chain management practices of American Eagle Outfitters. It discusses their sourcing strategy which includes factory inspections and ratings. It also describes their distribution centers and how they use a warehouse management system to pre-allocate merchandise and distribute it efficiently. American Eagle aims to reduce lead times and increase sustainability throughout its supply chain.

1. Bangladesh University of Textiles (BUTEX)
Department of Textile Engineering Management
Assignment on
Supply Chain Management of American Eagle
Submittedby
Md. Momenur Rahman ID – 2018-2-5-010
Julia Rahaman ID – 2018-2-5-011
Lianul Abdullah Khan ID – 2018-2-5-012
Departmentof Textile EngineeringManagement
BangladeshUniversityof Textiles(BUTEX)
Submittedto
Mr. Md. Arif Iqbal
Lecturer
Departmentof Textile EngineeringManagement
BangladeshUniversityof Textiles(BUTEX)

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Table of Content
American Eagle: The Company 02
Supply Chain Management of American Eagle 03
AE Life- The Intranet 04
Sourcing Strategy 05
Distribution Center (DC) 09
Reaching Customers 11
Conclusion 12
References 13

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American Eagle: The Company
AmericanEagle (AE) operatesasa clothingretailer, designing, marketing, and selling its own brand
of clothingline andaccessories.The productline includes,butnotlimitedto,denimwear, sweaters,
fleece, knits, outerwear, graphic t-shirts, footwear, personal care products and accessories. These
products are sold under “American Eagle Outfitters (AEO)” and “AERIE” brand names, and in 2015,
the companyoperatesinall 50 U.S. states, Puerto Rico, Canada, Mexico, Hong Kong, China, and the
U. K.
Throughout the years, AEO has been making progressive global expansions through licensing
agreements with local companies and opening its own stores in many different countries across
the globe. Despite failed experiences in developing new brands due to lack of performance, AEO
made another attempt to expand its market share in 2015 by acquiring “Tailgate Clothing
Company”. It owns and operates Tailgate, a sports-inspired vintage collegiate feel apparel brand
with a college town store concept. Another brand included in the acquisition was “Todd Snyder
New York”, which is a premium menswear brand. These acquisitions opened doors for new
business opportunities in the future.
In 2013 American Eagle expanded into Mexico and now have their own stores in mainland China,
Hong Kongand the UnitedKingdom.AEalsohave license agreementswith “ThirdParties”tooperate
AmericanEagle Outfitters and Aerie stores throughout Asia, Europe, Latin America and the Middle
East. Asof January2016, AE operates949 AmericanEagle Outfittersstoresand97 Aerie stand-alone
stores and shipping to 81 countries worldwide. American Eagle have a fantastic leadership team
that pridesitself onfocusingonindividuals’strengths,treatingpeople like people and not as objects
and delivering both results while enabling rewarding careers. The Ottawa Distribution Center is
comprised of 600+ associates, over 1,500 during peak, and 3 shifts.
Movingthe majorityof manufacturing facilities from China to Mexico by forming new partnerships
withpurchasingagentslocatedinMexico will foster growth in brand presence in North America by
cutting down product lead time. Consequently, this action from a customer perspective will help
with placing AE in a competitive position with Fast Fashion Brands by reducing the time it takes to
get products to AE’s end consumer from five weeks to three weeks. Additionally, with reduced
productionleadtime AEisable to expandtheirproduct line, increasing it from four to nine product
line releases annually.

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Supply Chain Management of American Eagle
AmericanEagle Outfittersisaleadinglifestyle retailer that designs, markets and sells its own brand
of casual,fashion-forwardclothingfor15 to 25-year-olds.Thisincludesjeans and graphic t-shirts, as
well as a stylish assortment of accessories, outerwear, footwear and swimwear. Keeping
merchandise freshandwell-stockedthroughafine-tunedsupplychainiskeytosuccessfully catering
to the company’s target audience.
In 1999, American Eagle had approximately 400 stores and was mounting an aggressive expansion
planto open50 additional storeseach year. (Today, the company operates more than 900 stores in
the U.S. and Canada.) Atthe same time,itbegan searching for a scaleable warehouse management
solution(WMS) thatcouldkeeppace withthisgrowthand be rolled out to new distribution centers
(DCs) as they came online in addition to the existing Warrendale, PA facility. The company also
wanted a solution that could pre-allocate all merchandise at any given DC, assist with vendor
compliance issues,aswell ashandle case leveladvance shipnotices(ASNs) andcompliantcase labels
from all vendors.
The life of American Eagle Outfitters clothing begins well before any fabric is sourced or sewn. At
each step along supply chain, their values drive improvements in policies and practices.
Mr. Billy F., Supply Chain Responsibility, American Eagle Outfitters says-
“Asthe managerof SupplyChainResponsibility,Iam passionate about my role because
our team is consistently educating, inspiring and challenging our supply chain with
honesty, authenticity and integrity.”
To maintaintheirsupplychainAmericanEagle followsfindingthe rightbusiness partner who shares
values and meets AE expectations for transparency and performance. Over time, they invest in
gainingtrust,workingtogethertoidentifyandaddressissues,andbuildingcapacitytodrive supplier
ownership in continuous improvement. They are working to enhance their factory monitoring
program andadvance keyinitiativesthatfocusonworkerwell-being, environmental responsibility,
and increased supplier ownership.
AmericanEagle have additional strengthsinSupplyChain Managementlike AEO’s Omni-Channel and
integrated communication system, AE Life- The Intranet.

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•Sourcing
•RelationBuildupand
followupwithSupplier
•OrderSubmission
•Shipto Distribution
Center
Vendor/
Supplier
•Warehouse Management
Solution(WMS)
•Manhattan Associates’
Warehouse Management
Distribution
Center • Store
• Web
• Mobile
• Social
• Phone
Global
Customer
Pre-allocated Merchandise
through Advance Ship Notice
(ASN)
OMNI Channel
AE Life- The Intranet
(Integrated communication system)

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Sourcing Strategy
In supplychainmanagement,AEvaluessuppliersthatshare theircommitment to responsibility and
respectthe safetyandrightsof theirworkers.AEeffectivelypromoterelationships with these types
of suppliersbyfirsttrainingnewsourcingassociatestounderstandthe importance of compliance in
factories.
Withthisbase of understanding, their Supply Chain Responsibility team meets monthly with their
Sourcingteamto discussthe overall performanceof our suppliers, including social compliance, and
review any factories in their supply chain that are currently working to remediate noncompliance
issues.
In 2013, AE has developed a supplier scorecard to measure the social compliance performance of
their suppliers. This scorecard measures the supplier’s factory social compliance performance and
commitment to improvement. It also rewards suppliers that issue their own public report
demonstrating their remediation and sustainability programs. AE encourage their suppliers to use
resources such as the Global Reporting Initiative Guidelines
How American Eagle Works with Factories
To make AEO products,AE partnerwithapparel manufacturersthatoperate more than300 factories
in more than 20 countries around the world. AE knows that with their global reach comes global
responsibility to drive sustainability and fair labor practices throughout their supply chain.
Global Map of AE Supply Chain
300+ Factories
20+ Countries
25,000+ Factory Workers
80% Women

7. Page6
AE’sgoal isto create strong, supportive relationshipswithfactorypartnersand work collaboratively
to improve workingconditionsin their supply chain. AE do not own or operate any factories, so it’s
important that they develop trusted relationships with their suppliers to make their apparel
responsibly. New factories must contractually agree to the terms of our Code of Conduct before
producing for AE.
Factory Inspection and Improvement
Supplier Approval
AmericanEagle followscareful observationon partners to whom they decided to do business with.
All factoriesmustbe approvedthroughapre-sourcingauditbefore anAEOproductionorder may be
placed, and factories with orange or red ratings are not approved for business. In 2016, AE did not
approve 34 factories unless orange-rated and red-rated findings were remediated.
Suppliers working with American Eagle often have subcontractors assist them in meeting their
productionneeds.Aspartof AE commitmenttoaddressing compliance issues in the deeper tiers of
their supply chain, American Eagle have increased restrictions on unauthorized subcontracting by
requiring information to be submitted before work can be subcontracted out. Penalties for
unauthorized subcontractors include fines, decreases in AEO orders, and possible termination of
business.
Factory Rating System
AEO is committed to working with their factory partners to properly protect the workers and
environment across their supply chain.
In 2015, American Eagle rolled out an enhanced factory rating system to better measure supplier
performance anddrive improvement.Whennon-compliancesare identified,AEworkswithfactories
to remediate everyfinding, addressing red- and orange-rated findings with urgency. While there’s
still alot of work to be done,AmericanEagle encouragedbytheirauditresults, which show that the
majority of their factory suppliers are rated yellow. Factory ratings are incorporated into AEO’ss
supplier scorecards which measure supplier performance in a number of areas, including social
compliance.
Inspection Approach
AmericanEagle’sfactoryauditsassesslabor,governance,environment,health,andsafetyconditions
against local and international laws and regulations.
All of the apparel factories they actively source from are visited and inspected every year by their
internal team or third-party auditing partners.

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AmericanEagle’sapproachisfocused on transparency and remediation, so most of their audits are
semi-announcedto helpthembuildtrustwiththeirfactorypartners.AmericanEagle have agroupof
AEO associatesinHongKongand Bangladeshthatconducta portionof theiraudits and work closely
with factories on remediation.
Sustainability
Environmental Sustainability
AE continue working to implement environmental best practices during the manufacture of their
products so that they limit their impact on the environment and promote a cleaner and healthier
planet.Theirenvironmental programevolvesastheylearnmore about our global impact by looking
at their product life cycle from start to finish.
Factory Wastewater Management
Apparel production involves a large quantity of water and if not treated properly, can present a
threatto people andthe environment. That’s why their “supply chain environmental program” has
been focused on working with factories to make sure that water is safe when it is discharged. AE
communicate their commitment to eliminating toxins in factory wastewater through the “AEO
Wastewater Management Standard”, which they launched in 2013. Their program is built around
wastewater testing, factory training, and capacity building so that factories can truly implement
change to betterprotectthe environment.Inthe next phase of this program, we will be supporting
factories to align with the AEO Wastewater Management Standard.
Sustainable Apparel Coalition
In 2016, AEO joined the Sustainable Apparel Coalition (SAC) along with more than 200 other
memberstoimplementacommonindustryapproachforenvironmental assessmentsatfactories.AE
using the SAC’s Higg Index suite of tools to help us measure the environmental impacts of factory
operations.
AE workedwith120 factories,denim mills, and laundries to build awareness and understanding of
the Higg Index and complete self-assessments to establish a baseline of performance. Moving
forward,they will engage more factories and develop customized training based on our suppliers’
assessment results, increasing their focus on chemical and wastewater management to help
factories improve their environmental performance.

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Sustainable Denim Washing
Garment finishing is the last step in the manufacturing process where wash processes give denim
the final desired look. AE is working with key laundries to implement Jeanologia’s environmental
impact monitoring (EIM) software as an initial step towards building more sustainable processes
during garment finishing. The EIM software assesses the environmental impact of the garment
finishing process across four areas: water consumption, energy consumption, chemical use, and
worker health.
Once they have established a strong basis of understanding with laundries in how to use the
software,theywill measure the performance of wash processes starting with their highest-volume
denim styles. The next step will be to develop targets and monitor progress to drive greater
sustainability.
Better Cotton Initiative
AE usesmore cotton thanany otherraw material to make the jeans and tees our customers love to
wear every day. That’s why AE joined the Better Cotton Initiative in 2015. AE want to make sure
cotton is grown using more sustainable farming techniques and supports the livelihoods of the
people who produce it.
To date, AE have engaged key denim mills to educate them on sourcing more Better Cotton. AE is
working to increase the number of mills we work with in this program and expand our education
efforts across other areas of our supply chain with the ultimate goal of increasing the total Better
Cotton volume they source.
Sustainable Fibers
Similar to cotton, synthetic raw materials offer another opportunity for enhanced sustainability.
Plastic water bottles can be used to make blue jeans, therefore AE started working with Unifi, Inc.
and several of theirkeymillsin2015 to helpthemmanufacture fabricscontaining recycled or waste
syntheticrawmaterials.Unifi hasfiguredoutawayto transform used plastic bottles into a recycled
plastic fiber called REPREVE®, which can then be used in many different types of fabrics. So far,
AmericanEagle have beenfocusedonengagingkey denim mills about sourcing REPREVE® fiber. AE
looksforwardto findwaystheycaninclude more sustainableandinnovative materials like recycled
plastic water bottles in apparel.

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Distribution Center (DC)
American Eagle have three Distribution Center, 02 in USA and 01 in Canada.
1. Pennsylvania (U.S.) – Hazleton and Warrendale
2. Ottawa, Kansas (U.S.)
3. Mississauga, Ontario(Canada)
Through that Distribution Centers American Eagle receive supplies from global suppliers and
distribute retail garments to all of their Stores as well as other selling channels.
AfterreceivingPre AllocatedAdvance ShipNotice (ASN) before merchandise arrive through AE Life,
AE DC workwith theirinteractive DistributionsoftwarelikeWarehouseManagementSystem (WMS)
and Manhattan Associates’Warehouse Managementanddistribute merchandise to selling channel
in less than half a day.
The Ottawa DistributionCenteriscomprisedof 600+ associates,over1,500 duringpeak,and3 shifts.
Warehouse Management System (WMS)
A software application designed to support and optimizes warehouse or distribution center
management.Theyfacilitate managementintheirdailyplanning,organizing,staffing, directing, and
controllingthe utilizationof available resources,tomove andstore materialsinto,within,and out of
a warehouse, while supporting staff in the performance of material movement and storage in and
around a warehouse.
Manhattan Functionality
AmericanEagle selectedManhattanAssociates’Warehouse Managementsolution.Functionally, the
solutionmetall of the company’s requirements, and strategically, Manhattan’s overall experience
and expertiseinthe retail industrygave the companyconfidence that the Warehouse Management
solution was the right choice for the job.
The Solution Facilitates Rapid Flow from Distribution Center (DC) to Stores
American Eagle took a phased “go-live” approach to rolling out the Warehouse Management
solution in three facilities. The initiative kicked off in 2000 at the DC in Warrendale, PA.
Implementations at a brand new facility in Ottawa, KS, and at a third-party location managed by
National Logistics (a subsidiary of American Eagle) in Ontario, Canada, followed shortly after.
The operating flow for all three locations is quite similar. Before merchandise arrives, American
Eagle receivesan AdvancedShippingNotice (ASN) for the goods, which details all the cases in each
shipment.AmericanEagle thenparsesthe ASN dataagainst all openorders,andindividual cases are
matchedto storesrequesting the merchandise. On average, 60-80% of American Eagle’s product is
pre-allocatedasflow-throughmerchandise to the stores, and spends less than half a day in the DC.

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Volume and Accuracy Records Broken While Millions of Dollars Are Saved.
Prior to implementing Manhattan Associates’ solution, American Eagle ran three shifts per day
Monday through Friday, and worked numerous Saturday shifts. Today, the company ships a record
numberof ordersin justtwoshiftsperday MondaythroughFriday,and only operates on weekends
during peak periods. This increase in efficiency has resulted in a $680,000 savings in annual
productivity.
In addition to more efficiently shipping greater volumes, product is now turned around in record
time. Put-to-store orders (full cases to be packed down between stores) and break case orders
(entire casesare consumedintopickedbinsfordelivery to packing rows) are processed in less than
10 hours, and cross docking of ship direct (full case) orders can take place in as little as an hour.
Previously, only 10% of goods were cross docked; since the implementation of Manhattan
Associates’solution,thisfigure hasincreasedto25-50%. At the same time,shippingaccuracyis at an
all-time high of 99.8%.
Because the level of flow-throughmerchandise hastripled,American Eagle’s inventory levels are at
an all-time lowacrossthe board.Infact, since the implementation of the Warehouse Management
solution, the company has reduced inventory by $4.5 million annually.
American Eagle Sets Even Higher Goals
Althoughinventoryiscurrentlyatanall-time low,AmericanEagle refuses to become complacent in
its success. The company continues to strive to further decrease the amount of inventory put into
reserve, and has set a goal to increase flow-through merchandise from 60-80% to 70-90%. The
companyhas alsoachieved95-97% vendorcompliance,butis focusing on driving this number even
higher.
American Eagle’s National Logistics facility in Canada is taking on additional retail clients and the
company is considering the possibility of self-managing its direct-to-consumer business, which is
currently outsourced to a third-party provider.

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Reaching Customers
There are three operating segments that AEO has identified: AEO brand retail stores, AERIE retail
stores, and AEO Direct. However, these segments have been combined into one, and all the
revenuesare consolidatedintoone reportunderthatone segment.While the AEO brandistargeting
men and women in the age group of 15 to 25 years old, the AERIE brand is a collection of intimates
and personal care productsfor women.AEODirecthandlesthe company’s e-commerce operations,
for both aeo.com and aerie.com. Through its OMNI-CHANNEL Strategy, in-store customers can
experience the AEO Direct as well, by purchasing online products from any in-store associates in a
single transaction.
Omni-channelretailingenablesthe retailerstoengage customersirrespectiveof the shopping
channel theyprefer.
AmericanEagle hastakenseveral stepstowardsthe developmentof itsomni-channel platformand
all of themhave showngoodpromise sofar.
Its buyonline andshipfromthe store pilotprogramhave helpeditattractthose customers,who
couldhave shiedawayfromthe retailerif the inventorypool wasn'tintegratedacrossall the
channels.

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Conclusion
American Eagle (AE) is the biggest global company that not only retailing ready wear, but a strong
facilitytoreachcustomerwitha strong linkage between backward and forward commodity. Strictly
operating supply chain management system from suppliers to customers made AE as a global
standard. As theysaystheirinnovativefabricsandfitshave positionedthemat best position. While
jeansare theirheartand soul,theydesignahigh-qualityassortment of apparel and accessories that
reflectstheircustomer’sanindividual style, at a value that is approachable by all by their CSM. The
life of American Eagle Outfitters clothing begins well before any fabric is sourced or sewn. At each
step along our supply chain, American Eagle’s values drive improvements in their policies and
practices. Influential, inspiring, inclusive, and fun: American Eagle is a style movement that’s 40
years in the making.

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References
1. www.google.com
2. https://betterworld.ae.com/?page_id=25
3. www.lcsc.edu/media/4144967/SS-Business-Paper-2.pdf
4. https://www.mmh.com/article/american_eagle_outfitters_omni_channel_journey