The Phillips - Van Heusen Corporation

PVH, is a global organization, with approximate earnings of $8.2 billion in 2013, and a stable of high profile brands, which includes retail giants, Calvin Klein, and Tommy Hilfiger.

With operations spanning the globe, it is no surprise that Bill McRaith, Head of Supply Chain at PVH,is an expert in global sourcing, and a few months ago I was lucky enough to attend a speech he gave in Las Vegas. In an industry that is desperately in need of true role models, PVH is a leading light.

As a buyer/product developer myself, with years of experience in the Australian market, two facts he cited, really provided a iightbulb moment to the current turmoil plaguing our retail market. In the last forty years, the average price of apparel in the US has reduced by 60%, largely in part to the opening up of China. Everyone under the age of 56, has only ever lived in an apparel price deflationary period. Every buyer & designer currently working in retail today has only ever been trained to chase a lower cost of goods. This means continually chasing cheaper sources of supply, cheaper raw materials, and cheaper manufacturing costs through the simplification of styling.

Historically for PVH, and in reality, for most retailers currently, their primary focus is finding the lowest cost. Which country that may be, and who the manufacturer is, are secondary considerations. It is a world of unknown, involving opportunities and risks, and unregulated labour markets. As Bill made reference to in his speech, retailers have lived in an ignorant state of bliss. “The world smells of paint” a common refrain which refers to the factories doing a quick tidy up when the buyers are due to visit, so the factory looks pristine. Relationships with manufacturers were tactical, allowing retailers to focus only on product compliance, whilst both building and employee compliance issues were someone else ‘s responsibility. PVH, however, have decided to step up and provide leadership, with a sourcing strategy for an accountable future.

What does this new strategic direction involve?
PVH’s primary focus is value first, then they focus on how and finally the where Relationships with suppliers are strategic and global. Not only with manufacturers, they now seek to ensure they have key partnerships with the farmers producing the raw materials. Global product compliance is critical, building and employee compliance non-negotiable. In addition a strategy to optimize the full chain, by a slow flow to strategically positioned hubs, in tandem with a quick response options, including a return to manufacturing back into the local US market, ensures PVH is strategically delivering value to its customers.

This ensures inventory levels remain optimum, new trends can be trialled in smaller runs, whilst larger volume items can be strategically flowed.
When I asked Bill why PVH had decided to take such brave initiatives, wondering if it was to become part of their marketing push, in line with smaller boutique labels advocating transparency from farm to customer, his reply was simple and inspiring... “because it’s the right thing to do”

similar posts