New Fashion

Every night, more than 1 million records containing demand forecasts for the next six months are processed by i2's software--in less than four hours. "You need to be able to respond to customer leads based on short lead times to hit spikes and at the same time rely on long-term forecasts to manage price points and those kinds of things," says Will Shiver, VF's i2 supply-chain analyst (or, as colleagues call him, "i2 super-geek"). Having this knowledge lets the company better utilize cheaper overseas manufacturers in Asia to hit price points on items with long lead times.

The software has helped VF quickly measure and analyze outcomes to refine processes, too. At some VF plants, it used to take nearly six days to process and cut raw materials. Using i2's software, VF realized it needed to reorganize the way it received materials at those plants, Shiver says. The result? The slower plants were able to cut out as much as four days of processing. Without i2, Shiver says, "we would have had spreadsheets laid down for days to find that."

Getting supply-chain planning right is critical to VF's efforts to work more closely with customers, Shiver says. "Ultimately, we execute on responsiveness." Another key piece of technology to improve value to customers is the prototype VF is building of SAP's sales and distribution module that will integrate with i2's demand-fulfillment module and process supply and demand requirements for all five coalitions. As it does with most of the packaged software it buys, VF worked closely with SAP to develop functionality unique to the apparel industry. For instance, the software will help VF analysts identify the best substitutions in the event a product is unavailable, then input the recommended substitutions to determine how they will affect forecasts and the supply chain.

The software "will give us a very complete and integrated view of what our business is," says Darrel Handgraaf, VP of sales services. "Every time we add an order or change an order, it will be reflected in the sales chain, supply chain, and financial systems." VF will test the prototype's performance, interfaces, and functionality next year.

The company stands to win on many fronts as it deploys its common systems architecture, Handgraaf says. For many of its retailers, VF has to abide by guidelines that specify labels, hangers, packaging, freight handling, and more, regardless of what apparel brand is involved. So, if VF cuts a deal with a retailer that carries its Lee jeans to also carry its North Face outerwear, it will be able to avoid describing those requirements again to systems. "We'll already be compliant across brands with that client's requirements, so we can focus on sales, reducing charge-backs, and increasing and improving customer service," Handgraaf says.

VF's top IT execs are proud of their company's modern approach to doing business. And rightfully so, says Margaret Gilliam, president of investment research firm Gilliam & Co. "They've been doing a lot of things right over the years," she says. "VF has always been very, very good behind the scenes, and technologically they are so far ahead they are able to do well in these times."

CEO McDonald affirmed the strategic importance of the company's IT initiatives: "We believe technology will differentiate the winners from the losers in a highly competitive and consolidating industry."

Photograph of Darrel Handgraaf by Kyle Hood