Vf brands modes of sourcing
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VF Brands outlines its global supply chain strategy, including internal sourcing, outsourcing, and a "third way" approach. Internal sourcing provides low lead times and defect rates but requires high capital investment. Outsourcing was a cheaper alternative but had high lead times and lack of coordination. The "third way" is a partnership where VF and suppliers commit to long-term volume forecasts, VF provides purchasing support, and suppliers are paid on a cost-plus basis. Challenges include loss of flexibility and proprietary expertise, while benefits include capital deployment, low costs, and process improvements.
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Sourcing involves purchasing goods and services and deciding whether to outsource supply chain functions. Key considerations for outsourcing include whether it will increase supply chain surplus, how much surplus the firm will capture, and potential risks. Supplier performance is evaluated based on multiple factors like price, quality, and timeliness that affect total costs. Effective sourcing decisions use supplier scoring, contracting, auctions or negotiations to improve supply chain profits through strategies like design collaboration, risk sharing, and performance incentives.
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presentation to NI local government group on integrating sustainability into ...
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This e-mail may include confidential information and is solely for the use by the intended recipient(s). If you have received this e-mail in error please notify the sender immediately. You must not disclose, copy, distribute or retain any part of the email message or attachments. Views and opinions expressed by the author are not necessarily those of the organisation.
This email has been checked for known viruses and is believed to be virus free.
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G Cottam Strategic Sourcing
The document outlines a commodity management and strategic sourcing methodology with the following key steps:
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2) Conduct spend analysis and market intelligence to understand external spending, costs, and the supplier market.
3) Develop supplier selection criteria, evaluate supplier responses, select suppliers for negotiation, and make a final selection.
4) Implement the selection through developing service level agreements, selecting an implementation team, and establishing performance measures and continuous improvement processes.
Supply chain management
Supply chain management involves the flow of materials, services, and information from suppliers to manufacturers to wholesalers to retailers and ultimately to customers. The objective is to maximize value for customers. Effective SCM develops suppliers as partners to support business strategy. It builds competitive advantage through lower costs, higher quality, and improved customer responsiveness. Supply chain decisions must align with a company's overall strategy of low cost, differentiation, or responsiveness. Outsourcing non-core activities is common to reduce costs and focus on core competencies.
Chap 06
Strategic alliances and mergers & acquisitions are options to supplement a firm's competitive strategy. Alliances allow firms to share resources, risks, and control to access new markets and technologies faster. Mergers and acquisitions allow tighter integration but come with integration challenges. Vertical integration through backward or forward strategies can generate cost advantages but also increase risks. Outsourcing non-core activities can improve flexibility and innovation if not overused. Offensive strategies proactively build advantages while defensive strategies protect them from rivals' attacks.
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Vf brands modes of sourcing
- 1. VF Brands Global Supply Chain Strategy Group 5: Shashank Singh Subhadeep Biswas Vandana Rawat
- 2. Modes of Sourcing Internal sourcing Strong manufacturing capabilities Aided by over a century of experience and extensive proprietary knowledge Provide a low lead time Ensures low defect rates High Capital investment Outsourcing Helped in capital deployment strategy Cheaper alternative against insourcing High lead times Overall process of placing order was time consuming Lack of trust & coordination among suppliers
- 3. Types of Approach ● Cut and Make Approach: Suppliers are paid by VF for value addition at each step ● Package sourcing Approach: Single supplier takes charge for entire production process ● Third way Approach: Integrate VF’s internal technical and supply chain expertise into suppliers ● Products/Brands to be benefited from third way: Both the Jeanswear and outdoor/action sports
- 4. “Third Way” Sourcing ● Halfway point between full integration and traditional outsourcing ● True partnership between VF and the suppliers ● Agreement for a specific product line and commit to a volume forecast over a number of years ● VF would utilize its purchasing capacity to help the suppliers ● Suppliers would be paid on a cost plus basis with a margin to meet its ROA requirements
- 5. Challenges in Implementation ● Loss of flexibility under the new approach ● Sharing of its proprietary expertise with outside suppliers ● Existing suppliers gave a cold reception ● Staffing
- 6. Benefits of Third Way ● Capital Deployment ● Production schedules ● Low cost raw material ● Process improvements ● Dedicated capacity ● Proprietary
- 7. THANK YOU