LEVI’S: FULL SPEED AHEAD ON QUICK RESPONSE DRIVE
Byline: Matt Nannery
NEW YORK — When it comes to servicing retailers, Levi Strauss & Co. is “moving full speed ahead on Quick Response.”
That was the word from Bob Knowles, vice president of customer relations, in a telephone interview from the company’s San Francisco headquarters. “We are aggressively rolling out this whole part of our business,” he said. “We are rolling out a QR services department now that will employ over 80 people. It will be in place by June.”
Knowles’s comments were prompted by the recent news that Levi’s is reevaluating parts of a planned $400 million commitment to a technological infrastructure that had ballooned to $850 million.
The company sent letters of reassurance to its top retailer customers last week outlining a commitment to QR that includes the new department headed by Ralph Briskin, former head of the company’s LeviLink service. The QR services department combines LeviLink, which handled electronic data interchange, with the apparel maker’s account partnership program. The latter program dealt with logistics, order and delivery requirements and floor-ready merchandise.
Knowles did not deny that Levi’s was reevaluating the $400 million commitment announced with much fanfare in 1994, but he said the reevaluation would not hamper the way it services retailers. He said the earlier comments, made by Paul Benchener, director of global Quick Response, in an interview at the IQ 1996 conference last week in Chicago, referred to an internal reengineering effort that includes technology and staffing costs unrelated to what Levi’s defines as Quick Response.
Knowles explained that Levi’s does not view QR as a pipeline-wide issue. Instead, he said QR deals with a specific segment of the distribution pipeline — the segment between and including Levi’s finished-goods warehouses and retailer distribution centers. Fabric sourcing and apparel manufacturing do not fall under the QR rubric as Levi’s defines it, according to Knowles.
It is generally considered that production planning, including fabric sourcing and apparel making, is an integral part of QR. Levi’s officials would not comment on how Levi’s reevaluation of its spending on technology and staffing will affect those earlier segments of the pipeline.
Knowles, however, readily expanded on Levi’s efforts to replenish retailer distribution centers efficiently from its warehouses. “In 1995, we retail-price-marked almost 19 million units,” he said. “Year to date, we’ve marked over nine million units.”
Those figures are considered impressive, as retailers have been clamoring for apparel makers to put such retailer-specific prices on items rather than generic suggested retail prices.
“Most of our top retailers are asking us to price-mark now or have shown an interest in us doing that in the future,” Knowles said.
Levi’s is also moving to comply with hanger guidelines recently published by the Voluntary Interindustry Commerce Standards committee. The standard hanger initiative is a major part of the retailer-initiated, floor-ready merchandise trend. Retailers want apparel makers to price-mark goods and put them on standard hangers to reduce duplicate efforts in their own distribution centers.
“In 1995, we put 4.7 million units on hangers,” Knowles said. “In 1996 so far, we’ve done 2.7 million units.
“We’ve also been working with some proprietary software that will allow us to forecast what expected consumer demand will be for up to a year,” he added. “Our goal…is to achieve in-stock levels of over 90 percent.”