Levi Strauss & Co. – A supply chain transformation at one of the world’s best-recognised brands
Levi Strauss & Co. has revealed plans to transform its supply chain. The company’s Senior Vice President and Chief Supply Chain Officer, Liz O’Neill, speaks to Supply Chain Digital about the initiative
In February, Levi Strauss & Co. (LS&Co.) announced a new “transformative new operating model” that will create “a more sustainable supply chain and a cleaner jean”. Called Project F.L.X. (future-led execution), this new model replaces manual techniques and automates the jean’s finishing process, allowing the company to reduce the number of chemical formulations used in finishing from thousands to a few dozen.
Traditionally, denim finishing – which creates worn, faded design elements on jeans – has been a highly manual, labour-intensive and chemical-reliant process, but the new model will automate much of the process, making it far more efficient and time-effective.
The company said the commitment is a major step to achieving zero discharge of hazardous chemicals by 2020 and accelerates the elimination of many chemical formulations that the company's Screened Chemistry programme identified as "phase outs”. Among the chemicals that will be eliminated is potassium permanganate, an oxidizer that is used industrywide to replicate authentic vintage finishes. Beyond eliminating many chemicals, Project F.L.X. is expected to reduce textile waste by more accurately making what the market needs and may also provide the opportunity to save water in the future.
Just weeks after the announcement, Supply Chain Digital spoke exclusively to LS&Co’s Senior Vice President and Chief Supply Chain Officer, Liz O’Neill, to get more detail on the plans that will revolutionise the company’s supply chain.
How significant a step-change do the February announcements represent for Levi's global supply chain?
Project F.L.X. is a radical breakthrough that will shape the future of how jeans are designed, made and sold. We believe it is possible to make iconic apparel with authenticity, agility and sustainability at the forefront – all while protecting the quality craftsmanship consumers know and love us for. Project F.L.X. is our biggest example of those values in action to date. This is the future of jeans manufacturing, and LS&Co. is well-positioned to lead the way.
How were these initiatives/ideas originality conceived and how much work has gone into making them a reality?
The best innovations come when you’re constrained. And our constraints were many: product authenticity, agility and sustainability. In the case of Project F.L.X., our initial mission was to find an alternative to potassium permanganate; a chemical used to finish jeans today. In turning to lasers to solve this problem, we achieved transformational benefits beyond sustainability.
Do you have an idea about how long it will take to scale-up this technology across your supply chain?
We have already begun piloting this new model with some of our strategic vendors and we’ve also begun to brief key retail partners. Our plan is to take a phased approach to rollout starting this year, with the goal of being fully scaled by 2020.
Automation is a big part of the new supply chain process. Could you give an overview of how it will make the supply chain more sustainable?
In addition to reducing chemical formulations used in the finishing process from thousands to dozens, the Project F.L.X. is expected to help us reduce textile waste by more accurately making what the market needs.
Levi's to transform its supply chain under new operating model
Could you tell us a bit about Project F.L.X. and how it will be implemented?
By using laser technology in new ways – and rearranging steps in our operating model – Project F.L.X. allows us to finish our jeans later in the process and dramatically reduce time to market, without compromising quality or authenticity and significantly decreasing our environmental impact. We can now design denim finishes with a revolutionary imaging tool that we developed, and then use digital files to quickly translate those designs to bulk manufacturing with automation — eliminating lengthy, labour-intensive processes and reducing our chemical finishing formulations from thousands to dozens. We’re all in on this new digital platform, and we’re committed to scaling it across our five-pocket jeans business, including the Levi’s, Denizen and Signature by Levi Strauss & Co. brands, by 2020.
To what extent are the initiatives are being driven by Levi's desire to reduce waste?
Our innovation process is informed by two key considerations, namely: how to deliver quality, high quality, durable denim styles to consumers when and where they want them, while making the manufacturing process more sustainable products. And so, at every turn, we ask ourselves: how can we make our supply chain more agile and competitive, while decreasing our environmental impact? Reducing raw materials waste is part of those overall objectives and considerations. For example, the Project F.L.X. is expected to help us reduce textile waste by more accurately making what the market needs.
We hear a lot in the industry about 'supply chain transformation', how much do you see these new initiatives as Levi's own supply chain transformation?
We often say that where we lead, others follow. That begins with getting things right internally at Levi Strauss & Co., to help ensure that our operating model sets us up to deliver great product, wherever our consumers like to shop. But we’re keen to see the industry take notice and adopt more sustainable manufacturing practices, to help make a greater impact together. We are transforming our own supply chain as we transition to this new way of doing business and we are excited to shape the future of apparel manufacturing.
What do you consider to be the main supply chain challenges facing Levi's and the apparel sector as a whole?
Supply chain agility and sustainable manufacturing continue to be two main concerns for most companies operating a global supply chain today. These are the innovation priorities for us and it was with these two pressing concerns in mind that we tackled the leading idea that brought us to pursue the Project F.L.X. breakthrough.
When you are dealing with hundreds of suppliers across the globe, how difficult is it to ensure your supply chain sustainability standards are being adhered to across the board?
The most effective way to help ensure that our standards are applied is to work with vendors to demonstrate that better working conditions means improved productivity – and a positive impact on the bottom line. More than 25 years ago, Levi Strauss & Co. pioneered manufacturing standards for our industry by introducing a comprehensive code of conduct. The Levi Strauss & Co. Terms of Engagement set out to protect the basic needs and rights of workers as well as the environment. Since its implementation, similar codes have become the standard and are employed by most apparel companies. In 2011, Levi Strauss & Co. began piloting the next phase of its commitment to creating a more sustainable supply chain called the Worker Well-being initiative. Through this new approach, the company partners with its suppliers and local organisations to implement programmes focused on financial empowerment, health and family well-being, and equality and acceptance. The initiative has created proven, sustainable business and social benefits at all levels of the supply chain, including a demonstrated four to one return on investment for some programmes.
How important is the Eureka Lab to driving supply chain innovation at Levi's?
It’s key. Our Eureka Innovation Lab is the nerve centre that brings together our developers, designers, vendors and sustainability experts to collaborate and tackle key supply chain challenges in a multidisciplinary way, to arrive at breakthrough solutions rather than incremental step-change. Established in San Francisco in 2013, Eureka is dedicated to design, research and creative development, and to creating advanced product prototypes. From exciting new products that tap into consumer insights through to cleaner manufacturing processes, this is the place where we embrace the opportunity to define the future of the apparel industry.
On a personal level, do you have any targets/goals that you'd like to achieve during your time at Levi's?
I hope to lead a global supply chain team that operates as a major competitive advantage for LS&Co. – one that is pushing the boundaries of sustainable innovation, that is able to help us stay ahead of a changing retail landscape and meet the needs of our consumers, wherever they want to shop. And I’d like to be able to one day say that our global supply chain team was an essential part of helping to make LS&Co. the best apparel company in the world – and a leading global company, across industries.