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Closer Connections

Vans has conquered mass customization, with a supply chain that links from China all the way to its customers' doorsteps

Back in the '60s, when Vans Inc. started out as a shoe outfitter for the surf and skateboard crowd, its customers could walk into a shop in Southern California with their favorite surf shorts, jeans, or even a piece of carpet and order sneakers made of the same fabric. Now at Vans.com, Web surfers can custom-design shoes thousands of different ways and be striding in style in six weeks or less.

Mass customization isn't a new idea. The PC industry pioneered the model about five years ago, other footwear and apparel companies have tried it, and automakers have been chasing it for several years. "We're continuing to see a trend of moving away from a make-to-stock strategy in manufacturing and fulfillment to a make-to-order or configure-to-order strategy," says Mike Dominy, a senior analyst with the Yankee Group.

Custom shoes are loaded for delivery to buyers on the same UPS truck that brings them into Vans' distribution center. It is a true cross-dock operation, says Jody Giles, VP and CIO of Vans.

Custom shoes are loaded for delivery to buyers on the same UPS truck that brings them into Vans' distribution center. "It is a true cross-dock operation," CIO Giles says.

Photo by Sophie Olmsted/Redux Pictures
Vans' online initiative, which began this spring, is different in a few ways. For one thing, the company is drawing on its heritage of treating each customer as an individual and responding directly to his or her present-day needs. "We kept hearing from customers who would E-mail us or write us, saying, 'I remember the day ...,'" says Jody Giles, VP and CIO of Vans, which in June was bought by VF Corp. for $396 million. And every tailored pair of shoes Vans sells is made thousands of miles away in a Chinese factory, then shipped nearly direct to the customers who've ordered them.

The strategy is working. The company's annual E-commerce sales equal those of about five Vans retail stores, with custom shoes being the No. 1 sellers online. The Vans brand is all about individual flair, but the IT, product development, marketing, and overseas factory staffs who worked on the project at first weren't sure they could tailor their E-commerce and back-end systems to support online customers' desire to express their creativity. Like many apparel and footwear manufacturers, Vans outsources almost all of its manufacturing to China. "How do you do a one-off custom order all the way in China?" Giles says.

Accepting an order was the easy part. "The hard part was getting the order information from our Web site through our ERP system to generate a unique purchase order that would then be sent to China," Giles says. And once the shoes were made, how quickly could Vans get them to buyers, factoring in a long boat ride, customs paperwork, and Vans' distribution-center processes?

Offshoring manufacturing makes build-to-order models more difficult. Levi Strauss & Co. late last year suspended its custom-made jeans service, which let buyers pick up orders at stores or have them sent to their homes, when the San Antonio plant making the jeans was closed. Levi Strauss has shut down all its manufacturing plants and turned the work over to offshore contract manufacturers. "We need to find a model to do [custom jeans] successfully through an offshore contractor," a spokesman says.

For Vans, the answer lay in the Vans Factory Exchange, a Web-based purchase-order system that's integrated with the company's J.D. Edwards & Co. supply-chain software and linked electronically to a factory in Guangzhou, China. The software is built on an IBM iSeries AS/400, which provides capacity on demand, giving Vans a cushion to handle order spikes. Those systems have been generating standard footwear purchase orders since the company began its Web operations in 1999. The new custom orders rely on a Web-services link from Vans Factory Exchange back to the shop.vans.com site to view a picture of the shoe to be made, which serves as the bill of materials.

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