Levi Strauss COO says partners helped it get through the pandemic
Liz O’Neill, chief operating officer for Levi Strauss, said that the denim brand was able to rely on its supply chain partners to help the company through challenges that arose as the novel coronavirus pandemic hit last year.
Levi’s COO told attendees of the National Retail Federation’s “Retail Converge” conference yesterday that established relationships, most going back 10 years or more, had already created a trust with vendors that allowed management to brainstorm solutions and come up with ways around some of the disruptions that took place.
She spoke of the “real threat” that Levi’s and its partners faced and doing “the right thing” by them. “We paid for our orders in full” and “committed to using all of the raw materials that had been procured on our behalf for future orders,” she said.
Levi’s found itself having to work out its issues during a time when demand and supplies moved from virtually non-existent to robust.
Ms. O’Neill pointed to the “surgical dynamic” of matching supplies to demand. Material sourcing was an issue for a company so reliant on cotton, and Levi’s found itself suggesting alternate product materials to enable the brand to deliver for its wholesale customers.
“We were kind of all in it together and they were like, ‘Yep, if you know you can make it out of something else, we’re okay, we’re gonna take it’,” she said.
Ms. O’Neill said that the creativity necessitated by the pandemic is a quality Levi’s is looking to continue to nurture going forward. Whatever form it takes, she was clear that it needed to be rooted in the core principles the company was founded on.
Digitization, she said, is part of the reason that Levi’s believes it is an even stronger company now than before the pandemic hit.
“Our goal is literally to digitize the end-to-end value chain,” she said. That encompasses product design and development, sorting and planning, and selling in.
Ms. O’Neill said the process, which requires both a cultural and technological shift, will make Levi’s a more responsive organization with faster speed to market, from ideation to finished product. She spoke about the benefits of improved forecasting and planning using predictive analytics powered by machine learning and artificial intelligence.
This “also helps our teams to get out of the sort of ‘heads down,’ repeatable work or repetitive work, and do more strategic work, more ‘heads up’ work,” she said.
DISCUSSION QUESTIONS: What do you take from Levi Strauss’ response to supply chain challenges created by the pandemic? Do you think Levi’s business model, which is engaged in traditional wholesale relationships and consumer-direct selling, provided any added benefits or drawbacks when compared to other companies with a more limited scope of operations?