North Face 2006 Annual Report Download - page 12

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JEANS REPLENISHMENT MODEL
retailers with vendor
managed inventory
Customized assortments
of the right number
of jeans are delivered
to the right retailer
at the right time
VF generates
replenishment orders
VF analyzes daily
point-of-sale
information from
retail partners
result
Improved retail turnover
Higher profits
Satisfied retailers
Satisfied consumers
1010110
0101010
1101010
retailers without vendor
managed inventory
Vendor waits for
retailers’ orders
Not enough jeans are
ordered or jeans are
delivered too late
Too many jeans are ordered
or delivered at any time
result
Rush delivery expenses
Depleted stock
Missed sales
Dissatisfied consumers
result
Lower prices
Lower profit
Clearance merchandise
Dissatisfied retailers
sale!
supply
cHain
VF Jeanswear’s Vendor Managed Inventory (VMI) and Retail
Floor Space Management (RFSM) systems incorporate a strategy
of forecasting and managing merchandising, sales, marketing and
supply chain, all rolled into one. Unsurpassed in the apparel
industry, these customized, computer-driven programs give VF
and participating retailers a hefty competitive advantage. They let
VF amass point-of-sale information daily from retail customers,
analyze the data to refine the assortment and stocking levels of
VF products and then automatically replenish the retailers’ selling
space. A store near a college campus, for instance, receives a
different assortment than a store near a retirement community in
the same town. The result has been maximized retail sales and
gross profit, enhanced in-stock levels of products, improved
inventory turns, fewer markdowns and optimal gross margin
return on inventory. This transparent look at retail sales means
that consumers can expect to find the right assortment of products
in the stores where they shop. For VF, retailers and consumers,
it is a win-win-win program.
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  SUMMARY ANNUALREPORT 2006