Levi's to transform its supply chain under new operating model
Levi Strauss & Co. (LS&Co.) is to roll out a “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 jeans 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.
Levi’s digitization enables a responsive and sustainable supply chain at an unparalleled scale.
“Thirty years ago, jeans were only available in three shades: rinsed, stonewashed and bleached. Today those three shades have exploded into endless variations, all produced with very labour-intensive jobs and long lists of chemical formulations,” said Bart Sights, vice president of technical innovation at Levi Strauss & Co. and head of the company's Eureka Innovation Lab.
“We're designing a cleaner jean for the planet and the people who make Levi's jeans, and we're doing it on a scale that no one else has achieved to date.”
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 program 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.
“This is a significant win for the industry,” said Robert Strand, executive director for the Berkeley-Haas Center for Responsible Business.
“It's inspiring to see how LS&Co. used constraints to drive innovation, paving the way for a more sustainable apparel industry. This is an important step forward that I hope others will follow."
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.
The company has already proved it can use nearly 100% recycled water in the final manufacturing stages with Project F.L.X. and is exploring the possibility of rolling out this water recycling capability more broadly over time.
To help unlock the benefits of digitally enabled design and development, LS&Co. turned to long-standing partner Jeanologia, a leader in eco-efficient solutions for fabric and garment finishing.
Since 1993, Jeanologia has operated with the ambition of advancing sustainable apparel manufacturing by delivering disruptive technologies, including ozone, laser and e-flow finishing systems. The company's like-minded focus on scalability was essential to supporting LS&Co.'s end-to-end, transformative vision.
5 Minutes With: Jim Bureau, CEO Jaggaer
What is data analytics, and why is it important for organisations to utilise?
Data analytics is the process of collecting, cleansing, transforming and analysing an organisation’s information to identify trends and extract meaningful insights to solve problems.
The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions. Spend analysis and other advanced statistical analyses eliminate the guesswork and reactivity common with spreadsheets and other manual approaches and drive greater efficiency and value.
As procurement continues to play a central role in organisational success, adopting analytics is critical for improving operations, meeting and achieving key performance indicators, reducing staff burnout, gaining valuable market intelligence and protecting the bottom line.
How can organisations use procurement analytics to benefit their operations?
Teams can leverage data analytics to tangibly improve performance across all procurement activities - identifying new savings opportunities, getting a consolidated view of spend, understanding the right time for contract re-negotiations, and which suppliers to tap when prioritising and segmenting suppliers, assessing and addressing supply chain risk and more.
Procurement can ultimately create a more comprehensive sourcing process that invites more suppliers to the table and gets even more granular about cost drivers and other criteria.
"The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions"
Procurement analytics can provide critical insight for spend management, category management, supplier contracts and negotiations, strategic sourcing, spend forecasting and more. Unilever, for example, used actionable insight from spend analysis to optimise spending, sourcing, and contract negotiations for an especially unpredictable industry such as transport and logistics.
Whether a team needs to figure out ways to retain cash, further diversify its supply base, or deliver value on sustainability, innovation or diversity initiatives, analytics can help procurement deliver on organisational needs.
How is data analytics used in supply chain and procurement?
Data analytics encompasses descriptive, diagnostic, predictive and prescriptive data.
Descriptive shows what’s happened in the past, while diagnostic analytics surface answers to ‘why’ those previous events happened.
This clear view into procurement operations and trends lays the groundwork for predictive analytics, which forecasts future events, and prescriptive analytics, which recommends the best actions for teams to take based on those predictions.
Teams can leverage all four types of analytics to gain visibility across the supply chain and identify optimisation and value generating opportunities.
Take on-time delivery (OTD) as an example. Predictive analytics are identifying the probability of whether an order will be delivered on time even before its placed, based on previous events. Combined with recommendation engines that suggest improvement actions, the analytics enable teams to proactively mitigate risk of late deliveries, such as through spreading an order over a second or third source of supply.
Advanced analytics is a research and development focus for JAGGAER, and we expect procurement’s ability to leverage AI to become even stronger and more impactful.