Retail IT Summit: Levi's banks on SAP for growth
Jeans maker realigns IT with business drivers.
Levi's, the jeans maker and retailer, is realigning its IT strategy with a shift in business direction to capitalise on changing market dynamics.
The company is going through an overhaul of its IT systems and business processes, moving to one, global instance of enterprise resource planning (ERP) technology from SAP.
Wim Vriens, Levi Strauss & Co Europe's business systems director in charge of supply chain operations said the company had decided to update and standardise its supply chain IT and processes to address falling market share and increased globalisation of sourcing of raw and ever more sophisticated materials.
"It is the nature of our business that we can't compete with the volume retailers, like Zara, who sell a pair of jeans for less than €30 [£20.29]," he said. "Neither can we compete with the designer labels that can charge as much as €200, like Diesel or Dolce & Gabbana, so we're caught in the middle."
Vriens said major change was underway within the company to regain market share and push its direct sales by expanding its own-label stores.
"With this comes global supply chain imperatives," he said. "These are flexibility and agility...where we make sure we have the ability to design and produce more complex fabric and clothing, at both a local and global level."
The company decided that IT lacked the horizontal focus on business process needed to update its supply chain and instead was stuck in silos along the functional lines of the business.
Vriens said: "We are looking at our business in a more horizontal way so we can be as fast and flexible as possible. By using SAP we can let the ERP evolution drive process and functionality. The ERP vendors have embedded best-practice functionality into their products, so what should we try and reinvent the wheel?"
Levi's is going through a staged rollout involving the business across its three regional areas, starting with the US. Europe will be responsible for standardising the global template that will be rolled back out to the US and Asia by 2010.
"We have to deal with weekly changes to our production environment," said Vriens. "Now the IT function will no longer be centred around application suites and system scope. It will concentrate on having a common set of data everyone can understand, which will allow us to move forward at a much faster pace than we're used to."