Question

What is your evaluation of VF’s third-way sourcing strategy?

Answer 1

Answer and Explanation:

Basically, evaluating VF's third-way sourcing strategy, I will briefly start by explaining why this strategy was designed.

The Third-Way Sourcing strategy was put in place to partially solve the problem between full integration and traditional method of outsourcing in order to develop efficient supply chain by making true business relationship with VF’s suppliers possible whilst also adding the expertise of VF’s internal technical and supply chain into external suppliers.

VF's would achieve the following based on contracts of long-term partnership that was built and signed, namely:

Volume forecast for longer period of years as compared to traditional outsourcing which gives only seasonal forecast; Helps contracts to avoid taking the orders made by competitors in the same category; Dedication of production lines to VF’s products, with diverse industry relevant investment in order to manage the supply chain process efficiently; Schedules flexibilty and work collaboration on the quality of process; Divison of labour leading to higher efficiency of investment diversity.

VF’s third-way sourcing strategy will make the best production costs possible whilst benefitting VF's growth in the international market.

The third-way sourcing strategy results into getting product of better quality and helps to retain more workers.

This strategy affords VF Company the capability to efficiently operate the manufacturing process; give quick response to market; and efficient coordination among suppliers which has increased lead times and led to improved level of inventories.