Bob Zane, Liz Claiborne's senior vice president of manufacturing, sourcing, distribution and logistics, arrived at the company in 1995, along with the company's CEO Paul Charron, with some ambitious (and conflicting) consolidation goals: dramatically reduce the scope of its worldwide operations, with a proportionate increase in productivity.
Mission accomplished. Since his arrival, the company has reduced the number of facilities where its brand is produced from 500 to 250, with a subsequent 25 percent reduction in the number of countries where it operates (currently at 35 nations). At the same time, according to Zane, production has increased by 90 percent.
A key component of the company's strategy, Zane says, was to adopt a stringent matrix
of vendor requirements (ones that considered financial strength, human relations records and communications). The approach resulted in far fewer business relationships, but ones that Zane says deliver greater flexibility and performance.
Achieving Zane's lofty goals has been the latest chapter in the Liz Claiborne success story, which was launched humbly enough in 1976, with just three domestic manufacturing operations, in Pennsylvania, North Carolina and Alabama.
"I am proud to be part of this company and work with such a group of talented and dedicated professionals who have done some great things," Zane said. "In the world of sourcing, we have distinguished ourselves by creating a very rational approach to getting our product to the right people, at the right time, with the right quality and the right cost. At the same time, we realize that the post-quota world is going to be significantly different from the pre-quota world. We're looking forward to dealing with those new realities in an appropriate manner."
Zane says some of the strategies that spearheaded Liz Claiborne's massive consolidation efforts will also be necessary for future sourcing success in 2005 and beyond. He envisions a free-market world of larger, more integrated manufacturers that coordinate and deliver more services and product development, while shipping directly to the retailer.
"There are many people who subscribe to the theory that by the end of this decade, China will account for no less than 50 percent and as much as 80 percent of all apparel (sold) in the United States. I'm right there with them -- to me that sounds right," he says. "Currently China accounts for 12.5 percent. The factories that survive ' I'm looking for them to demonstrate great capabilities in terms of product breadth, in terms of cost and in terms of service levels. I think this company will be dealing with still fewer factories, and those factories will be larger in size and have greater tech capabilities. And I think that's true for the industry in general."