ANS-3

The Third Way Sourcing was designed to be a halfway point between full integration and
traditional outsourcing to make supply chain more efficient by building a true partnership
with VF’s suppliers and integrating VF’s internal technical and supply chain expertise into
external suppliers.
Pros & Cons of VF-
Pros Cons
Better exchange and flow of information at Closing down internal plants despite strong
all stages performance and giving away human
resource to external contractors is a huge
risk
Diversification of risk as each stage has Since contractors & suppliers are getting
different contractors and products were new technology & investment there is a
sourced from different locations. chance that they might open their own
apparel line
Dedicated production lines for VF by Hard to convince existing suppliers as they
suppliers along with timed contracts will lose their existing clients

Product Sourcing Why?

Category
Jeanswear (U.S.) Traditional Since price is the most important
characteristic required along with lower
weightage given to speed and variety.
Jeanswear (Europe) In-House In Europe, jeans are worn as fashion item and
thus would require to give higher weightage
to variety and/designs. Since fashion has a
short life cycle speed is another important
characteristic.
Imagewear Third-Way Here, both price and responsiveness is the
(uniform) driving factor along with the quality. The in-
house technical expertise could be utilized as
a means of knowledge sharing and thus
would be an effective way to reduce the costs
Outdoor and Action In-house This requires high response time, high variety
wear and high quality at the same time. Using In-
house strategy, one can control and monitor
the resources and technical expertise
accordingly.
Sportswear Third-Way Here again since sportswear is price
insensitive while the driving factors are high
quality and response time. Demand
estimation is comparatively easier to
estimate.