By Chris Hobson, VF Corporation
What does converting 71 technology systems across eight brands to a new technology platform have in common with summiting Mt. Everest? More than you’d think.
For starters, both feats are very complicated, highly technical and require an immense amount of grit. Both require the hard work of a close-knit team to tackle a daunting challenge. And last but never least: There’s a great view of the landscape when at the top.
We at VF are continually inspired by the lifestyles and activities our products enable. It’s why we invited one of the athletes sponsored by our The North Face brand to motivate the team as we slogged through a particularly complex technology project — Acadia. Pete Athans summited Everest seven times and has led or participated in 16 expeditions to the mountain. If Pete can climb Everest seven times, we told ourselves, our team can implement a massive technology undertaking. And we were right.
At VF, we are one, global organization. Yet with more than 30 brands, 63,000 associates, 1,500 retail stores and $12.4 billion in revenue, we are highly diversified across our brands, products, distribution channels and geographies. Creating one comprehensive technology platform that powers our back end processes for all of our eight outdoor and action sports brands — Eastpak, Jansport, Lucy, The North Face, Timberland, Reef, Smartwool and Vans — positions us with both a great vista from which to see where we are, and where we’re going. Perhaps more important, it gives us an effective way to plot the course.
Base Camp: Here’s Where We Started
We knew it was time to replace a number of outdated legacy systems. VF has grown over time — often through acquisitions — resulting in a variety of business and technology processes.
Our core ERP system was SAP, which we’d initially installed in the late 1990s, and had heavily customized from then through 2010. We knew we needed a new platform to reduce the number of applications, our complexity and, ultimately, our costs. The acquisition of Timberland and Smartwool in 2011, both major brands with potential for growth, was the tipping point.
We needed a consistent process and back-end system across the brands. And we needed a new platform on which our business could grow. That platform needed to have best-in-class applications for all of the key aspects of running a business, including ordering, procure to pay, master data management, and more.
In 2012, we began to plan for the climb.
The Planning Phase
We sat down with our brands in 2012 and asked what they wanted to have within the new system. IT was involved from the ground floor in the planning and decision-making. We worked hard to create a platform that worked for all of our brands — without customization. Ultimately, we created one common platform centered around SAP software that would work equally well across many ways of running a business.
One important item we were excited to address was our distributed order management (DOM) system. Online orders took roughly four hours to reach the distribution center. In an age where consumers expect their orders to ship and arrive in their homes quickly, we knew we needed to move faster.
Another high priority item was master data management (MDM), which is the foundation of a company’s analytics capabilities and allows large, complex organizations to consistently manage their businesses. In the past, much of the master data collection was done manually by each brand using spreadsheets, a time consuming and unreliable process. Colors, sizing, and other attributes were inconsistent, making analysis difficult.
A Collaborative, Dedicated Team
This project had support from start to finish from VF’s senior leadership team, which was critical to its success. It also demanded a close partnership between the business and the IT team, leading the project collaboratively and executing in lock-step. This was no small feat given that the scope of the project and the sheer size of the multidisciplinary team involved — nearly 600 team members and 70 different outside partners — were vast.
Project fatigue alone could have sunk the efforts, but our people are remarkable. They were committed to preparing the organization for the change.
Inevitably, there were some challenges — such as aligning the visions of diverse businesses and brands and the volume of testing required. But these were obstacles the team overcame.
Here’s What We Did
We standardized the technology systems and business processes for our Outdoor & Action Sports brands. We implemented scalable technology platforms to support our growth.
We centralized material, customer and vendor master data to increase accuracy and harmonize master data for these eight brands. Our data is now put into our MDM system, which has a strong information governance framework to ensure that our data stays clean and reliable.
We have improved our business intelligence capabilities, including advanced reporting across our supply chain, finance and sales functions. Now we have consistent, clean data available and have empowered our users to understand the data available to them. We are currently rolling out additional analytics functionality that will provide our teams with new, advanced capabilities.
How it’s Making a Difference
We aligned our data through MDM for customers and suppliers. All of our global brands now have common definitions of their merchandising groups (shirts, jackets, shoes, etc.). We can group data quickly and correctly, which allows us to analyze our data faster and make quicker business decisions. We have a single, global view into our suppliers. This means that the product information for our global brands is accessible for Europe and Asia, in addition to North America. It’s truly a single view for information. For example, if Vans is creating a purchase order for a global buy, they can see all of the regions’ demand and place a single order, saving considerable time and improving product availability to meet demand.
Users of the new reporting platform can generate their own ad hoc reports much more effectively than ever before. This empowers the users and relieves the burden on the technology group, allowing the technology experts to focus on more strategic projects.
Our DOM system has drastically shortened order times and throughput to the distribution centers, positioning us for efficient and accurate order fulfillment. Orders flow right from the website directly into the new DOM system, which does all the necessary checking upfront. Is there inventory available? Is the order valid? If so, the order goes directly to the distribution center for shipping within seconds — a process that used to take hours. Moreover, the DOM takes the order and looks across the distribution modes within the network and chooses the optimum distribution center to fulfill the order. This has improved our overall efficiency, boosted product availability and made it easier for our retail partners, such as department stores, to place new orders. The changes enable us to provide faster, better delivery for both our e-commerce and retail customers. They get the right product at the right time, sent from the right place. Customer service has greater visibility into transactions. Before, customer service had to switch between screens to release, allocate orders, view invoices, etc., creating longer servicing times for our consumers.
With Acadia in place, we were able to quickly set up a platform for our Smartwool business to start operations in Canada in January 2015. This took half the time that it would have on our old platform.
In the longer term, Acadia positions us for growth and readiness for the future of retail.
When Pete Athans spoke to our team about his experiences as a climber, he shared this quote by Rene Daumel, the French surrealist and author of Mont Analogue. “You cannot stay on the mountain forever. You have to come down again. So why bother in the first place? Just this: What is above knows what is below, but what is below does not know what is above. One climbs, one sees. One descends, one sees no longer, but one has seen. There is an art of conducting oneself in the lower regions by the memory of what one saw higher up. When one can no longer see, one can at least still know.”
This quote continues to inspire me and encapsulates the experience of this team, of this project, of this company. With the right leadership support and the right team, you can achieve big things. You can climb mountains. The view from the summit and what you’ve learned along the way will be well worth it.
Chris Hobson is Vice President-Business Systems & CIO-Global Supply Chain at VF Corporation.