Supply Chain & Corporate Responsibility C A M E R O N B A I L - PowerPoint PPT Presentation

Supply Chain & Corporate Responsibility C A M E R O N B A I L E Y , E V P , G L O B A L S U P P L Y C H A I N S E A N C A D Y , V P , G L O B A L R E S P O N S I B L E S O U R C I N G & S U S T A I N A B I L I T Y T H E P O W E R o f A N D

Supply Chain Overview W H A T W E D O I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Operational Discipline To Manage Large-Scale Complexity 400M UNITS ANNUALLY 70K STYLE / COLORS 23K SUPPLY CHAIN ASSOCIATES I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Global Sourcing & Manufacturing Capabilities to Serve Our Diverse Brands >$5B 460 FY’20 COST OF GOODS VENDORS 48 Owned 13% COUNTRIES OF ORIGIN 778 Sourced 87% FACTORIES I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

We Proactively Manage Our Global Footprint to Reduce Risk Exposure OTHERS 20% VIETNAM 25% BANGLADESH 5% FY’20 UNITS CHINA to U.S. U.S. BY COUNTRY CHINA OF ORIGIN 7% 6% 17% HONDURAS 8% MEXICO CAMBODIA 8% 11% Directional mix change from CY’14 units I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Global Network To Service Customers And Growing DTC Business 59 DISTRIBUTION Omnichannel CENTERS GLOBALLY CAPABILITIES AT EACH VF-OWNED OTHER DISTRIBUTION CENTER AMERICAS 12 USA 20 170 APAC 13 COUNTRIES IN WHICH EMEA VF PRODUCTS ARE SOLD 14 I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

What Got Us Here Won’t Get Us There… I . F A S T E R T O G E T H E R S T R A T E G Y I I . P U R P O S E L E D S U P P L Y C H A I N I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Faster Together Strategy W H E R E W E A R E G O I N G I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y 8

Embracing End-to-End Digital Supply Chain Transformation DESIGN AND PLAN AND SOURCE SELL AND MOVE DEVELOP MANAGE AND MAKE ENGAGE DIGITAL AUTOM ATED AUTOM ATION AND DISTRIBUTION DIGITIZATION OF PRODUCT DEM AND AND ADVANCED CENTER STORE CREATION SUPPLY PLANNING M ANUFACTURING AUTOM ATION OPERATIONS I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Digital Product Creation Transforming How We Create, Make And Sell Products CREATE MAKE SELL Better product/market fit – More efficient creation process – Agility and speed to market I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Driving Automation And Advanced Manufacturing Across Our Footprint Automation Index 1 2 (Vans FW) Cost efficiency MANUFACTURING Risk management AUTOMATION Speed-to-market 3 4 Speed-to-market Knowledge ADVANCED New routes to market MANUFACTURING Transfer Mass customization INTERNAL W/ PARTNERS I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Transforming Distribution for Improved Consumer Proximity and Retail Centricity MULTI-NODE DC NETWORK DC AUTOMATION Number of Nodes of Distribution Percentage of Automation (New DC’s) Multi- 70-80% node Dual- 50-60% node Single- 40-50% node Year 2017 2019 2021+ Year 2017 2019 2021 Speed-to-market/consumer proximity – Risk management – Flexibility I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Case Study: Multi-Speed Capabilities To Sustain Vans’ DTC Growth W/ HEM ISPHERE M ANUFACTURING NEARSHORING M ANUFACTURING AUTOM ATION AUTOM ATION (Pha s e II) CAPACITY (Pha s e I) M ATERIALS M ANAGEM ENT M ANAGEM ENT 2021+ 2020 2018 2017 2016 LEAD TIME 170 days 140 140 70 70 30 Core + Core + Core + STYLES --- Core Core Seasonal Seasonal Seasonal % DTC --- I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Case Study: Supply Chain Capabilities To Support The North Face Breakthrough Innovation INNOVATION New methods of make and standards Agile supply chain execution PARTNERSHIP Strategic partnership with vendors New models for internal collaboration SUSTAINABILITY Sustainable materials and chemistry Aligned sustainable suppliers I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

The Scope of Our Supply Chain Provides Opportunity to Drive Large-Scale Change OUR IMPACT ON PEOPLE OUR IMPACT ON PLANET VF carbon emission footprint Material origin Tier-3 material farmers transformation Supply Materials 900,000 1,200,000 Chain 34% 24% >6,000,000 LIVES Tier-2 material Tier-1 product Logistics 8% production manufacture 3,000,000 1,200,000 Direct impact <1% I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Purpose Led Supply Chain W H A T D R I V E S U S I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

“ “ Anonymous

Our Integrated Responsibility And Sustainability Efforts Create Value ENVIRONMENTAL WORKER RIGHTS SUSTAINABILITY AND SAFETY PRODUCT WORKER AND STEWARDSHIP COMMUNITY DEVELOPMENT I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Leading in Traceability and Supply Chain Transparency

We are on Track to Impact One Million Lives in Our Supply Chain by 2025 WATER + SANITATION HEALTH + NUTRITION CHILDCARE + EDUCATION I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

When We Lead, We Are Movement Makers And Transform Our Industry I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y

Key Takeaways  Building on solid foundations – Operational disciplines to manage complexity – Globally balanced footprint – 23K talented associates  Faster together strategy – Digitizing our supply chain end-to-end – Automation for cost, speed and innovation – Enabling consumer- and retail-centric transformation  Purpose Led supply chain – Responsibility and sustainability aligned to value creation – Positively impacting one million lives by 2025 – When we lead, we are movement makers I N V E S T O R D A Y 2 0 1 9 / S U P P L Y C H A I N & C O R P O R A T E R E S P O N S I B I L I T Y