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VF Supply Chain Chief on Transforming Through Tech Innovation

VF Corp. has long been a leader in the global apparel space, and over the years it has shifted operations as the company pivoted to a retail focus after setting down roots as primarily a wholesaler.

Cameron Bailey, executive vice president, global supply chain at VF, is in his second tour of duty at the apparel giant. Here, he talks about the changes he has seen, how digitization is helping the business, and how VF is meeting consumer needs while keeping an eye on environmental sustainability.

Sourcing Journal: You began your VF career in 1989 working primarily in the company’s intimates apparel business. What were the sourcing and supply chain operations like at the time and how have things changed or evolved?

Cameron Bailey: Back then, the production for VF Intimates was based in the U.S. with no real sourcing in place. Starting in the mid-90s, VF began starting up offshore manufacturing and developing relationships with sourcing partners in countries around the world. Over the subsequent years, our product supply base evolved into a diversified global model with a mix of sourcing partners and owned manufacturing. Additional changes we’ve made to our company in recent years, such as spinning off our jeanswear business and the planned sale of our Occupational Workwear businesses, continue to reduce our internal manufacturing footprint. And, as we shift away from internal manufacturing, we also prioritize retaining some of our internal manufacturing talent, which really helps to foster strong, mutually beneficial relationships with our sourcing partners. Many of our leaders have decades of manufacturing experience and they work to transfer that acumen and know-how over to our sourcing partners to enable them to continually improve their operations.

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SJ: How has the company adapted to the changes required as needs shifted through divestitures and acquisitions to VF’s brand portfolio?

C.B.: Since VF was founded 121 years ago, we’ve been constantly evolving and adapting to remain a leader in our industry. One of our greatest strengths is how our incredibly talented teams embrace change to ensure we meet the various needs of our consumers and our portfolio of brands. Our people are comfortable with being uncomfortable, and a willingness to change is ingrained in VF’s culture. This enables our ability to quickly pivot so that we can always leverage the scale of our global business platforms and provide value to all the brands in our portfolio. This is especially true within our Global Supply Chain organization.

SJ: Over the years, VF has moved from a wholesale firm to include its own retail stores and e-commerce. What changes were needed to shift logistics and distribution strategies?

C.B.: Consumer behaviors and shopping trends have evolved significantly in recent years. These global marketplace dynamics have led us to think differently as it relates to the location, layout, level of automation, and other factors within our distribution centers as well as our overall logistics network. The need for a truly omnichannel network that services our direct-to-consumer channels as well as our wholesale channel, which still represents about 60 percent of our revenue, has become more critical than ever. And, this network must be seamlessly enabled by the logistics required to meet our consumers’ and customers’ expectations globally. We currently have several large-scale programs underway as part of our global business transformation that are strengthening our position for the years ahead.

SJ: Is the current product mix still 77 percent sourced, and 23 percent manufactured internally?

C.B.: We currently manage about 89 percent of our unit production with our global sourcing partners and about 11 percent in our owned manufacturing. This is the mix today following the spinoff of our jeanswear business.

Technological innovation is helping VF transform its global business to become a consumer-minded, retail-centric and hyper-digital company.
A look inside The North Face factory. Courtesy

SJ: As for digital and technological improvements, how is VF using that to improve its sourcing and supply chain? For example, is VF using digital, such as 3D, to help with design and decision-making to help shorten the production time and cut the need to ship samples back and forth for approval?

C.B.: VF’s global business strategy is underpinned by our transformation to become a consumer-minded, retail-centric and hyper-digital company. We have multiple bodies of work in progress to further drive the digitization of our global supply chain. We have an intense focus on ensuring we have the right enabling capabilities in place, from consumer insights to product creation to seamless delivery of products when and where our consumers expect them. Also, we’ve been able to shorten production times with technology, which also helps us continually reduce our environmental impact by requiring fewer materials and shipment/transportation needs.

SJ: What about AI? Is there a system in place that can help VF’s brands know when to put more goods into production, how much to produce and where to ship the goods to in order to get them where they are needed?

C.B.: We are continuing to increase the intelligence and sophistication of our supply chain through the use of AI, but I’m unable to share any specifics.

SJ: VF has an extensive supply chain across the globe, with 30 plants, 34 distribution centers and 16 third-party partnerships.

C.B.: As VF has continued to evolve in recent years, so, too, has our supply chain footprint. Today, we have fewer than 10 owned manufacturing facilities and 27 distribution centers. The changes within our portfolio, specifically with the spinoff of our jeanswear business and the planned sale of our Occupational Workwear business, are leading us to become a more agile supply chain.

SJ: How much of the proportion of the work is centered in China and how has it shifted or changed over the years?

C.B.: As part of our strategy to achieve greater balance and diversification with our global product supply footprint, we have continued to lessen our reliance on China as a sourcing hub. Last year, approximately 16 percent of our total product was sourced from China, with most of this product intended for the China market. Also, last year about 6 percent of our total sourcing in China was bound for the U.S., and this year it will be down to about 3 percent.

SJ: Tell me a little bit about how VF’s supply chain organization has helped develop a responsible sourcing program. What are the elements of the program?

C.B.: Our decision-making process at VF leads with our Purpose, which is about powering movements of sustainable and active lifestyles for the betterment of people and our planet. With this in mind, we recognized through our robust factory auditing process that many supply chain partner factories were struggling to continuously improve their approach to worker rights and safety, and environmental sustainability. Many of our partners were meeting our minimum requirements, but we felt they could do better with guidance and help from VF. So, we established a Responsible Sourcing program and team of experts to provide support to our key supply chain partners. Through this work, we help our suppliers improve their performance, which in turn improves the livelihoods of workers and their families while also reducing the factory’s impact on the environment. VF’s Responsible Sourcing team comprises key subject matter experts in environmental sustainability, community development, labor rights, and health and safety, among other areas. These teams set goals for factories while also developing programs that guide their improvement. Another key aspect of responsible sourcing at VF is the Sustainable Operations team. This global team is spread out across our primary sourcing countries and members work hand-in-hand with our factory partners to deliver best-in-class labor and environmental performance.

SJ: In the last few years, we’ve faced issues that involved trade policies and tariffs and port strikes. And, of course, this year saw everyone impacted by the pandemic in connection with inputs and the supply chain. What geopolitical risks do you see coming down the pike? How will that impact VF’s supply chain capacity and capability risks?

C.B.: While there are specific potential risks that we identify, monitor and plan for ongoing, I wouldn’t say there are risks we’re anticipating in the near future more than others. The volatility of the past few years, including the challenges associated with the pandemic, has only reinforced our belief that operating an agile and flexible supply chain is imperative in today’s global marketplace. The interconnectedness of our worldwide supply chain requires us as leaders to be ready for virtually anything that comes our way.

SJ: What do you see as upcoming issues on the horizon for global supply chains?

C.B.: When I look ahead, I don’t see issues but rather opportunities. We’re living in an incredibly dynamic time, driven by the rapid pace of technological change, which also brings with it ever-evolving consumer behaviors. It’s our responsibility to consistently offer consumers compelling new products and experiences while also removing as much of the friction as possible from their shopping experience. And, we must do this while managing an agile supply chain that emphasizes respect for our planet and the millions of workers it employs. When you consider all of the expectations we face today, you can let it overwhelm you or excite you. At VF, we’re energized by the ongoing challenges and believe that we have the right strategies and talent in place to turn them into opportunities.