Ten years ago, VF Corp. decided to start managing the companies that it owned.
Greensboro, N.C.-based VF has been around for more than a century, starting out as a maker of gloves and mittens and growing into the world's largest apparel company, with nearly $6bn in sales. By 1995, it had evolved into a holding company, taking a hands-off approach to its various units. "They just went out and bought things, and left the companies alone," says Ellen Martin, vice president of supply-chain systems.
Chief executive officer Mackey McDonald, who took over in the mid-1990s, steered the company onto a different course. He saw multiple, redundant operations that were ripe for consolidation. And he vowed to install common business practices systems across the massive organization.
That was a tall order for a company whose name is virtually unknown to the public at large, but was making some of the world's most popular brands of apparel, including Wrangler, Lee, Brittania, Vanity Fair and, in subsequent acquisitions, The North Face, Vans and JanSport. McDonald's first impulse was to create a common series of best practices and re-engineer the company's supply chain. But he soon ran into the problem of incompatible systems.
VF's business units were operating as silos, with legacy systems of varying sophistication, says Martin. One of the company's first steps, therefore, was buying an enterprise resource planning system from SAP AG.
ERP was fine for core transactional processes, but it didn't address VF's need for good supply-chain planning. In particular, it couldn't distinguish items by size, an essential capability for apparel makers. (An apparel SKU can have as many as five dimensions, based on size, color and other details.) So VF went looking for a stand-alone planning system.
|A materials asset planning program "is probably the most complicated software I've ever seen."|
- Ellen Martin of VF Corp.
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