Analysis and Design of Levi Strauss Supply Chain with Recommendations

This report presents an analysis of the Levi Strauss supply chain, identifying issues such as lack of optimization, inaccuracy, and inaccurate demand forecasts. It explores recommendations like implementing a computerized inventory system for accurate demand data, hiring skilled professionals, and investing in research and development to understand consumer demands. The report also suggests adopting inventory optimization solutions for better demand forecasting, partnering with suppliers to avoid raw material shortages, and properly implementing Project FLX for a sustainable supply chain. The analysis covers the sourcing of raw materials, the use of the Monte Carlo technique, and the potential benefits of replenishing stock every fifteen days. The conclusion emphasizes the importance of these recommendations for improving the company's inventory management, productivity, and profitability.

Running head: Supply Chain 1
Supply Chain Analysis and Design
Student’s Name
Institution

Supply Chain 2
Recommendation
Levi Straus company supply chain faces some problems such as lack of optimization,
inaccuracy and inaccurate demand forecasts. Apart from the Monte Carlo technique, the
company can use other recommendations discussed below. Monte Carlo technique help
understand the costs and human resources needed to adopt a new system.
The company must adopt a computerized inventory system which will automatically
evaluate and give accurate data on demands of each store. The company has many stores and
managing what each requires is a problem. Therefore with the new inventory system, each store
orders will be identified and the proper action taken. The store needs will be fulfilled based on
the priority that is the high demands will be met first to make sure the store does not suffer
shortages. The company can hire professionals with skills and expertise suitable for
management. Each store or retail outlet will have a knowledge who will be responsible for
monitoring, identifying and reporting store need based on their inventory level. The company
should invest more in research and development. Through research, the company get information
on consumer's demands and design jeans which will meet those requirements. Also, by
evaluating the projected sales of each store, the company will understand which products are best
fit for each of their stores. Levi supply chain extends too many different countries; thus, it’s good
to understand the needs of each. Market research will help understand each country's demand.
With accurate information, the company will ensure each retail outlet has enough inventory to
meet consumer’s requirements (Ishii, & Ohba, 2018).

Supply Chain 3
Lack of optimization problem makes it hard for the company to make plans. There are
various recommendations like the company can use like to adopt an inventory optimization
solution. Inventory optimization solution help plan and make accurate demand forecasts. The
solution compares different demands made in the past and then forecast a new one. Comparing
previous orders, the company will come up with accurate demand forecasts. In this
recommendation, Levis Company should evaluate past demands of each store and with the
information forecast future demands. Accurate demand forecasts will ensure that the company
does to experience stock-outs or overstock because the company will produce only the required
products.
Other recommendations suitable for the company are the first partnership with suppliers.
Partnership results in results in major benefits like cost reduction, improved efficiency and
innovation through idea sharing. The company supply chain structure starts with the sourcing of
raw materials that is cotton. The company has suppliers from different countries; therefore, to
improve its supply chain, it has to collaborate with some of its suppliers. The partnership will
ensure that the company does not suffer raw material shortages as the suppliers will deliver them
on time. The last recommendation is to adopt Project FLX properly. Project FLX is a new
operating model that will help create a sustainable supply chain and in designing jeans. The new
digital manufacturing tool will replace chemical manufacturing methods lowering lead time from
months to weeks (Munyao et al, 2015).

Supply Chain 4
Conclusion
The supply chain structure is suitable for Levis Company because, with raw materials
sourced in time, the company can meet its customers’ demands. Levis supply chain encounters
some problems in its inventory systems such as inaccuracy and lack of optimization. These
problems make it hard for the company to meet its objective. To solve the inaccuracy problem,
the company should use a new inventory management system, invest in research and
development, and also hire professionals to manage its inventory.
On the other hand, the company should adopt an inventory optimization solution to solve
the lack of optimization problem. Inventory optimization solution involves evaluating and
comparing different previous demands. To improve its productivity, the company should start
replenishing stock after every fifteen days. Replacing after fifteen days lowers restocking costs
enabling the company gains a profit of $435.22 daily. Before installing any new system, the
company should use the Monte Carlo technique to avoid unnecessary expenses. Project FLX will
also help solve inventory management problems by reducing waste as it ensures the manufacture
of the only wanted products. The project is significant as it reduces hazardous chemical
discharges.

Supply Chain 5
References
Ishii, N., & Ohba, M. (2018). A supply chain analysis and design method based on the value of
information. In Computer Aided Chemical Engineering (Vol. 44, pp. 1591-1596).
Elsevier.
Munyao, R. M., Omulo, V. O., Mwithiga, M. W., & Chepkulei, B. (2015). Role of Inventory
Management Practices on Performance of Production Department. A Case of
Manufacturing Firms. International Journal of Economics, Commerce and Management,
3(5), 1625-1656.