LOGISTICS & SUPPLY CHAIN MANAGEMENT REPORT

LEVI STRAUSS & CO. JEANS

Presented by
Vishnupriya Ajith
Shivika Gupta
Sakshi Surana
Riya Tomar
Aryaman Bhatia
 Table of Contents
S.No. Title Page No.

1. Introduction of the Company 3

2. Raw Materials and Suppliers 4

3. Manufacturing 7

4. Supply Chain and Logistics 8

5. Main Competitors 9

6. Manufacturing Capacities 10

7. Product Line 11

8. Retailers 12

9. Customers 13

10. Distributors in India 13

11. Quality Management with Sustainable Practices 14

12. Financial Analysis 16

13. Supply chain issues during the pandemic 18

14. References 19

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Introduction to the Company
The Levi's brand of denim pants is a trademark of the
American clothing business Levi Strauss & Co. It was
established in May 1853 when Levi Strauss, a German
immigrant, relocated from Buttenheim, Bavaria, to San
Francisco, California, in order to launch a west coast
outpost of his brothers' New York dry goods company.
He and a tailor, Jacob Davis, came up with the first jean
after realising the necessity for labour pants that could
endure more challenging conditions. They obtained a
U.S. patent for "waist overalls" with metal rivets at
stress locations in 1873. The lot number "501" was assigned to the initial product line in
1890.

One of the biggest clothing firms in

the world and the undisputed leader
in the denim industry, Levi Strauss
& Co. creates clothes lines and
accessories for men, women, and
kids. Through a mix of chain
retailers, department stores, online
marketplaces, and a global presence
of around 2,800 retail outlets and
shop-in-shops, Levi's goods are distributed in more than 110 countries worldwide. The
reported fiscal 2012 net revenues for Levi Strauss & Co. were $4.6 billion. The Levi's® name
stands for effortless cool and traditional American fashion. Since being created in 1873 by
Levi Strauss & CoLevi's jeans have gained worldwide renown as the most identifiable and
copied article of apparel, capturing the affection and devotion of consumers for many years.

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Raw Materials and Suppliers

The Life Cycle of Levis Jeans involves the following steps:

Step 1: Cotton Production
Step 2: Fabric Production
Step 3: Garment Manufacturing
Step 4: Transportation and distribution
Step 5: Consumer Care
Step 6: End of Lifecycle or Recycle

Most blue jeans are made of cotton, and the buttons, rivets, and zippers are made of copper or
zinc. Cotton is the most crucial raw material needed to make denim jeans. Although Levis
does not grow its own cotton, it is concerned with how it is grown, how it affects the
environment and where it is planted in order to ensure that cotton is purchased from
sustainable sources. The cotton used to make more than 95% of Levi's products was grown in
countries including the United States, China, India, Pakistan, Turkey, etc. Typically, Levis
buys on;y part of its fabric from mills directly. It makes significant strides in collaborating
with them in their pursuit of sustainability. After being harvested from the field, cotton is
taken to textile mills where it can be woven into yarns and fibres that are eventually
converted into denim, which is then used to make a pair of jeans. After weaving, dying is a
crucial step. Indigo is a fundamental raw element needed for the traditional blue denim look.

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A number of hazardous chemicals, like formaldehyde, are needed for both the dying process
and the synthesis of indigo dye. A significant quantity of pollution is produced as a result; in
some regions of the world, waterways next to denim mills turn blue, polluting and killing fish
and harming the health of locals and workers. A plant-based indigo dye that has less of an
adverse effect on the environment is being produced and used by Levis.

Levi’s plans on using less water

and fewer pesticides in their
cotton production practices.
However, Levi’s considered
organic cotton is too expensive
and was discontinued by Levi’s in
2008. Organic cotton is farmed
without using toxic pesticides or
fertilizers, sewage, and genetic
engineering. They used untreated seeds, organic fertilizers, and rotate crops in order to keep
soil healthy with little or without irrigation systems. They do manual weed control by
physically getting rid of them and perform pest control by using beneficial garden creatures
and “trap crops” for pest control. They established a target of employing 20% cotton blend.
This demonstrates their concern for the components used in their goods and the methods used
to obtain them. They have cut back on water use by 28%. Levi's differentiates itself from
competing brands by using less water and having a beautiful finish. A collection of
environmentally friendly clothes from Levis includes jeans constructed from eight recycled
plastic bottles.

Sustainability is advantageous, not just for the environment but also for the company's
financial health. This helps the firm stay in operation. According to a study on the official
Levis website, the Better Cotton Initiative found that Indian farmers who used innovative
water control techniques cut their water and pesticide use by 32% and saw a gain in profit of
20%. In order to conduct business with raw material suppliers, Levis also intends to interact
directly with contractors and farmers. By developing enduring partnerships with dependable
cotton farmers, being more involved in the commercial side of operations will also assist in
lowering initial prices for raw materials.

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For India, the key suppliers of fibre and fabric are:-
● Alpine Apparels Pvt Ltd - Bangalore Ambattur Clothing Company - Chennai
● BEST Garments-Tirupur
● Bombay Rayon - Bombay EXIM Clothing-Tirupur
● Arvind Mills -India
● Alok Fabrics -India
● Jay Gee Melwani Group -Singapore

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Manufacturing
● Is done from South India mostly Segment for Knitwear & 23% from Tirupur
● About 2% of the woven shirt segment comes from Chennai.
● 12% of the Bangalore-based denim segment

Outsourced items for the rest: To save money, Activate management, Variations in fashion
trends. Fibre-cotton cultivated in the United States, China, India, Pakistan, Turkey, or one of
the many other nations where cotton is farmed, makes up more than 95% of all Levi's®
goods
FABRIC: After the cotton is harvested, it is spun in mills all around the globe and turned into
fabric. Although LEVIS often does not buy fabric directly from mills, it does make
significant efforts to collaborate with them in their pursuit of sustainability.
1. Once the clothing is prepared for shipping, Levis distributes it using its own
logistics division.
2. 80 percent of the items go to local retailers.
3. 20% of purchases are made online.

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Supply Chain and Logistics
In the Delhi NCR area, Levi's jeans. SSJS Logistics Pvt. Ltd. is an outsourcer.

Their partner, "The Pratap Group," is where the majority of denim and cotton fabric
purchases are made. There is a facility there (Haryana). The raw material from that factory is
sent to IMT Manesar and peera garhi, both in New Delhi, where SSJC has storage facilities
(Haryana).

Road transportation is the primary means of transporting the cargo. SSJS Logistics Pvt Ltd
does this. Every vehicle is GPS-enabled to offer real-time positions, and the cargo is
monitored via web software. Peera Garhi and Manesar warehouse are the first places where
all the stuff is gathered. Manesar warehouse only gets the quantity of raw materials needed
for the IMT Bawal facility (Haryana).

The raw material is subsequently transported from Peera Garhi to the Bangalore facility.
Additionally, SSJS logistics are used for this.The finished product, which is a pair of Levi's
jeans, is subsequently transported by road to the warehouses of retail stores. Everything is
insured.

The zippers, buttons, and other accessories are purchased from reputable local merchants.
The quality of all the raw materials is guaranteed by the businesses' quality engineers. At the
IMT Bangalore and Bawal facilities, safety stock is kept on hand. A safety stock guarantees
the production of 5000 units. After an average of 10 days, the money is received via internet
banking. Vitthal Carry (Bangalore) uses the empty trucks leaving Bangalore to transport its
raw materials to Haryana. DHL Logistics, CLX Logistics, SSJS Logistics, and other
companies have been nominated by Levi's.

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Main Competitors

Levi’s is one of the leading fashion brands globally with a market capitalization of around
$6,600 million. Few factors that have aided in such phenomenal brand name and market
capitalization include:-

· Strong Brand Name

· Expertise in Jeans Industry

· Distribution Channels and Global Outsourcing

· Over 470 self-operated stored globally managed by 16000+ employees

However no company can operate in isolation and is always trafficked by the competitors in
the market. The following chart shows various competitors of Levi’s:-

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Manufacturing capacities

One major competitive advantage that Levi’s has is that it has various manufacturing
capacities that are spread all over India. In total it has around 53 locations in India. The
following table includes few such manufacturing locations:-

Factory Name City State Product Type

Active Clothing Co Distt. Fategarh Sahib Punjab Apparel

(Badali)

Bharat Silks Bangalore Karnataka Apparel

BPS Industries - Unit 17 Chennai Karnataka Accessories

C.R. Garments Tirupur Tamil Nadu Apparel

I.D. Exports Noida Uttar Pradesh Accessories

Miyanbazaz Exports Jaipur Rajasthan Apparel

Suryalakshmi Cotton Hyderabad Hyderabad Apparel

Mills Ltd

Viari Exports Pvt Ltd Velappanchav adi Karnataka Accessories

Unit 2

Roger Exports Agra Uttar Pradesh Footwear

Ram Fashion Exports Navi Mumbai Maharashtra Footwear

Pvt Ltd

Renfro India Pvt Ltd Pune Maharashtra Accessories

Radnik Auto Exports Greater Noida Uttar Pradesh Accessories

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Product Line:

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Retailers

Since establishing a wholly-owned subsidiary called Levi's Strauss India Ltd in 1994, the
garment brand has steadily expanded its operations in India. With improved storefronts and a
better customer experience, the company wants to increase its physical presence both
domestically and abroad by 2022.

Levi’s has a wide presence in terms of the outlets that sell their products. Levi’s is present in
around 1500 stores across India with excusive store count at 400 and various other
multi-brand outlets like Shopper’s Stop and Lifestyle.

Recently it had ossified its retail footprints by oepning one of the largest stores in India at the
Oberoi Mall in Mumbai. With the ability for customers to completely customise their Levi's®
garments with patches, embroidery, panelling, and distressing, this store's popularity will
pave the door for additional ones to open in Mumbai and change how the brand is curently
seen.

Few locations that consist of Excusive Levi’s Stores are:-

· Malad, Mumbai

· Dumas Road, Surat,

· Mohalla Gulabh Bagh Sigra, Varanasi

· Gandhi Nagar, Ghaziabad

· Sector 15-A, Faridabad

· Goregaon East, Mumbai etc

· Kurla West, Mumbai

· Nazarbad Mohalla, Mysore

· Gomti Nagar, Lucknow

· The Mall, Ludhiana

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Customers

The customers are the ultimate source of revenue for any brand. Also as Vince Lombardi
rightly mentioned, “It takes months to build a customer and seconds to lose one”, Levi’s
focuses strongly on customer experience.

We will look at the current target segments of Levi’s:-

· Customers aged between 15-30 years

In this segment the brand targets both males and females who are fashion conscious. The
main audience is students and young professionals. The customers are generally from the
middle income group.

To target this group the company has based its rationale on crtan values namely,
self-expression, authenticity, peer acceptance, trendsetter etc.

· Customers aged between 30-50 years

In this segment Levi’s aims to target professionals and blue-collared workers who have been
wearing Levi’s since their youth.

The values to target this group include sense of loyalty, familiarity and self-expression.

Distributors in India
When the clothing is prepared for shipping, LEVIS distributes it via its own logistics
division. The INDC is often the headquarters in the US.26
1. Bangalore-based Alpine Apparels Pvt Ltd
2. Chennai-based Ambattur Clothing Company
3. Tripura-based knitters Aviram
4. Going International - Tripura
5. BEST Clothes, Tripura
6. Mumbai-based Bombay Rayon
7. Communal clothing - Tripura
8. Tripura clothing from EXIM
9. SSGC Private Ltd. - Bangalore and Delhi NCR

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Quality Management with Sustainable Practices

Quality Management refers to monitoring various organisational processes and tasks to

guarantee that the goods and services provided and the methods employed to provide them
are consistent. It aids in achieving and preserving the organisation's desired level of quality.
In order to achieve the long-term success that comes from customer satisfaction, quality
management seeks to guarantee that all of the organisation's stakeholders collaborate to
enhance the business's procedures, products and services.

In addition to making a concerted

effort to ensure that their goods
are of the finest quality, Levi
Strauss & Co. has issued a call to
action to change consumer
perceptions away from fast
fashion-driven purchasing and
urge consumers to view Levi's
jeans as a long-term investment. It
has successfully adhered to its
firm commitments to sustainable denim production by retaining high-quality merchandise,
including more environmentally friendly components like reconstituted cotton, and
substantially mitigating water consumption.

To improve quality management, Levi has started a strategy to lower carbon emissions while
trying to use less energy and resources, and it regularly monitors its energy effectiveness
through this. By working to be more resourceful, sustainable, and economical, the firm has
also established measurable targets that it hopes to accomplish by 2025, mainly to reduce the
annual output of carbon dioxide and other greenhouse gases, including:
1. Reducing water usage in manufacturing by 50% in regions with high water stress
2. 90% decrease in greenhouse gas emissions from owned and operated facilities
3. 40% decrease in greenhouse gas emissions across the whole supply chain

Additionally, Levi's committed to reducing the number of hazardous chemicals used to treat
and dye its clothing to eliminate them entirely by 2020, which it has now achieved across
most of its supply chain with Zero Discharge of Hazardous Chemicals Group (ZDHC).

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 Utilising super-stretch materials,
vibrant colours, and innovative cuts,
Levi has set out to produce and
preserve uniqueness to improve its
quality management functions. Levis
is always looking for ways to
streamline its operations and cut
waste. They continuously strive to
develop innovative fibre and fabric
techniques that might result in
products with smaller environmental footprints and greater sustainability. One of the
revolutionary products it developed was Cottonised Hemp, a rain-fed hemp fibre that is
treated to soften the coarse fibre and make it appear and feel identical to cotton. It is a
rain-fed hemp fibre that takes less water and pesticides to produce than cotton, which is now
also utilised in Levi's flagship products. Generic viscose (rayon) has been replaced by
traceable viscose, and the usage of Lyocell, like Lenzing's TencelTM, has increased, which is
produced using a technique that continuously recycles the chemical solvents used to create
the fibre and also uses less energy and water than generic viscose.

Levis collaborates with various

partners to assist farmers in
finding more water-efficient
and fruitful cotton farming
techniques to lessen their
ecological impact and locate
more sustainable supplies of
cotton, which make up 91 percent of the raw materials. By the end of 2020, 75% of their
cotton came from more eco-friendly suppliers, such as the Better Cotton Initiative, organic
cotton farms, or producers of recycled cotton. They hope to increase that percentage to 100%
soon while continuing to diversify their sources.

Additionally, the organisation created "Terms of Engagement," a set of comprehensive

techniques for improving quality management across all worldwide operations that primarily
address the problem of workers' rights for fair labour standards. In order to provide uniform

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and high-quality management for all of the facilities worldwide, the Terms of Engagement
propose establishing fundamental values and moral standards. By maintaining a fair and
correct inventory, they have improved quality control, resulting in the most professional
inventory management practices. Levi has improved its inventory management through
EPC/RFID technology, which has increased the supply chain's overall effectiveness.

Financial Analysis

In the second quarter of the

financial year 2022, Levi Strauss &
Co. reported a 15% year-over-year
growth in net revenues to $1.5
billion. According to the
Company's growth rates,
third-quarter sales in 2022
increased by 1.31% from the
previous year's period.

The business has performed

reasonably well since the pandemic. Due to rising demand and cost reduction, Company saw
an improvement in profitability. The operating Margin increased from 5.18% in the second
quarter of 2022 to 13.13% in the third.

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Additionally, their net profit margin drastically climbed from -2.86% of net revenue to
9.60%, and their gross profit margin increased by 11% from 52.84% of net revenues to
58.06%.

Inventory accumulation caused the business's inventory turnover ratio to sequentially decline
to 2.44 in the third quarter of 2022 and inventory to sales ratio to similarly decline to 5.82,
both of which were below the company average. In the quarter ending August 28, 2022, the
average time to process inventory increased to 150 days from 137 days in the quarter ending
May 29, 2022.

For the fiscal year that ends on March 31, 2022, Levi Strauss (India) expects operating
revenues of over INR 500 cr. Over the previous year, its EBITDA rose by 325.15%.
Additionally, its book net value has dropped by 10.91%. Liabilities have climbed by 66.80%,
while the Company's total assets have increased by 33.56%. The Company's debt-equity ratio
stands at 1.22, whereas its current ratio is 1.25

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Supply chain issues during the pandemic
Retail was one of the pandemic's most severely impacted industries. Lockdowns that lasted
indefinitely around the globe had a negative impact on sales and foot traffic in the retail
industry. The global supply chain crisis has made matters worse for firms on top of
everything else. Levi Strauss sales statistics, however, bucked the general trend of its
competitors throughout the time period.
Levi Strauss said in its most recent results call that it now expects yearly sales to rise at a rate
of around 6-8% through 2027, which is higher than its prior five-year objectives of 4-6%. If
Levi's is successful in expanding, its sales, which was $5.8 billion in fiscal 2021, might
approach $10 billion. In the most recent fiscal year, the San Francisco-based company's direct
business accounted for around 36% of overall sales and generated 22% of revenue via digital
channels.
Casualization was fueled by the pleasant work environment provided by those who work
from home and by the hybrid work culture, which is here to stay, understood by Levis. Now,
it's 50% of our whole volume.
The corporation benefited from diversification amid the supply chain crisis. Levi's distributes
their goods in 20 different nations. For instance, they were able to shift supplies and get it
through the (US) east coast while the (US) west coast bottleneck was at its worst. They were
able to get around that when tariffs were being talked with China and we were importing a lot
of things into the US from China. Less than 1% of their imports come from China now.
Consequently, their supply chain is diverse now.
Levi's increased its investment in technology for supply chain and sales at the same time. In
order to automate supply planning, Levi's introduced SaaS-based technologies in 2015–16.
Nowadays, computers determine if it is preferable to send a product from a warehouse or a
shop close to the client. They launched online payment as well and so they increased their
supply chain management.

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References:
● http://www.levistrauss.com/sustainability/planet/water
● http://www.businessweek.com/articles/2012-10-18/levis-goes-green-with-waste-less-j
eans#p2
● http://www.levistrauss.com/blogs/cotton-and-climate-change
● http://www.guardian.co.uk/sustainable-business/levi-rethinking-traditional-process-w
ater
● https://corporatefinanceinstitute.com/resources/management/quality-management/
● https://www.levistrauss.com/
● http://www.uniindia.com/levi-strauss-co-net-revenue-up-15-pc-at-1-5-billion-in-q2/bu
siness-economy/news/2774600.html
● https://www.macrotrends.net/stocks/charts/LEVI/levi-strauss/income-statement
● https://csimarket.com/stocks/fundamentals_glance.php?code=LEVI
● https://www.tofler.in/levi-strauss-india-private-limited/company/U18101KA1994PTC
015448/financials
● https://www.statista.com/statistics/268547/global-net-sales-of-levi-strauss/
● https://www.levi.in/men-1
● https://www.indianretailer.com/news/levi-s-strengthens-retail-footprint-opens-large
st-store-in-india.n13637
● https://levistrauss.com/wp-content/uploads/2018/04/Levi-Strauss-Co-Factory-List-M
arch-2018.pdf

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