The Rise and Fall of Levi Strauss & Co.

The ultimate demise of Levi Jeans Company came long before the announcement was made on the closing of eleven of its US factories, ending the jobs of over 6,000 employees--many of which had been long term. Although many manufacturing type businesses are notorious for their "slave labor wages" and less than reputable working conditions, Levi's Strauss broke the mold by maintaining its character of always treating its workforce fair and employees as valued. The company was ranked in many polls and by numerous magazines as one of the best to work for.

What led to the downfall? Most say that it was the abandonment of the old piecework system in 1992. Under the old system, an employee did one dedicated task such as sewing buttons or zippers. The worker was paid according to the amount of individual work completed. Unfortunately, the recurring tasks showed increases in "repetitive-stress injuries", for example, carpel tunnel syndrome.

At this point came the birth of the 'work group method', which the company saw as more productive. The idea of teamwork seemed profitable for Levi's US based factories whose competition was already turning to the overseas markets to cut costs on labor. It was obviously more economical for them to hire a seamstress at several dollars a day (overseas) as opposed to having to pay hourly wages stateside. "Teamwork is the basis for solving frustrating and costly workplace problems, such as high stress, unsolved conflicts, low job satisfaction, and high turnover", says Steve Carney, the author of The Teamwork Chronicles. The idea backfired on Levi's and inevitably turned the workers against their counterparts.

Quality Control

Responsibilities: Carry out activities for the implementation of goals, policies, procedures, and systems pertaining to Quality Control (QC) Directly supervise the Quality Control team by providing continuing improvement required to achieve the goals and standards of Owned and Operated (O&O) garment processing plant Assist in monitoring the plant performance based on agreed Development and Production KPIs, provide data on Pre-Production Runs (PPRs) and Commercial Samples (CS) Ensure adherence to specification Control Charts based on Company standards and existing products to determine trends in production line output, record the degree and frequency of conformity or nonconformity Provide assistance in sampling, measurement, and verification of manufactured and finished products to meet the Companys quality standards; identify causes for noted deviations Implement solutions to issues, from process analysis to general QC Team projects Conduct weekly and monthly quality review which will be the basis for creating training and coaching programs for the team Assist in managing the QC teams competency development by actively participating in their training process The individual must be: Able to develop Quality Control Systems and Procedures, design work flow, and controls Able to demonstrate analytical thinking, accuracy of data and judgment to ensure high quality output Proactive, able to anticipate issues, take corrective actions, and make strong decisions in order to resolve issues and meet commitments Able to manage tight work deadlines, multiple and shifting priorities in a fast-paced and challenging environment

Quality Assurance

Perform detailed analysis of NCR data and implement identified improvement projects with the aim of reducing the Cost of Non-conformance. Ensures compliance of Quality Procedures, recommends changes to procedures, and updates procedures as needed. Review, develop a plan and integrate procedures, work instructions and forms of new acquired businesses into an existing quality system. Identify Quality Management System (QMS) training needs, develop and implement quality related training for employees Facilitate quality assurance/quality control functions on day to day activities Provide inspection support for quality plans, incoming, in-process and finished products Facilitate ongoing continuous improvement initiatives to enhance the effectiveness of the QMSensuring awareness of the system implementation, the quality policy, quality objectives and the role of employees to support the QMS. Plan and implement periodic system and process audits; summarize and complete reporting of the same Uses problem solving techniques to effectively communicate with other departments to resolve problems in an accurate and timely manner. Supports Quality Engineering by reporting problems, finding root causes and effecting corrective action Effectively leads teams by building and maintaining a positive, results-oriented work climate. Regularly monitor and measure suppliers performance with the aim of reducing vendor nonconformances. Environmental procedures and programs and identified workplace personal protective equipment requirements

Quality costs The first indication of Levi been this position is that Levis states that they wanted to avoid price-based competition due to their history of brand recognition and brand loyalty to their customers. Therefore Levi created value to the customers by providing them with customised jeans and accustomed the price according to the Levis brand which carries enough clout to justify a reasonable price premium. Over the years though it seemed that the brand name lost some importance and it was critical for Levi to create valued features to the customers in order to differentiate them from their competitors. The cost structure showed that Levi sold their products through wholesale channels which were then distributed by the retailers. Levi also maintained a chain of Original Levi Stores. These two choices allowed Levis to be closer to the customers and help them satisfy their needs in the search for the perfect fitted jean. The next factor that indicates the position is that Levi emerged with mass production with the use of emerging communication and computer technologies. The concept allowed Levi to find a niche market and help them create a competitive advantage over the competitors by providing customized made jeans. Previously it was thought that highly-customized products were expensive to produce, however with information technology Levi was able to meet the customer needs for flexibility and it created a chance for Levi in becoming more economical. Levi found a way to make a mass production and have services delivered due to the technology. Levi was facing a lot of competitors that provided the low-cost and high volume producers, therefore they had an advantage over the company. The Personal Pair Proposal project allowed a discovery of a niche market and this allowed Levi to create differentiation from its competitors and by adding price premium. Levi wanted to avoid competing against the low-cost volume producers therefore Levi did market research and revealed that only a quarter of women were truly happy with how their jeans fitted them. This project was a jean customisation program that made it possible to approach the customers with having lower distribution costs and unsold inventory. The mass customised program allowed the costs to be lower as well as provide the differentiation advantage due to the reengineering process of new technologies. Therefore the position of differentiation is providing customers with value, medium prices and high perceived value is created for Levi jeans. The fact that there is value added with the service. The proposal of a $15 premium and with focused groups suggested that women would consider the price fair due to them finding a superior fit, which competitors have not done yet. Suggestions have been made that a realistically price would be between $5 and $10. The fact that there is a brand name involved it would not be considered for the premium to be $15 as customers know the quality of the jean that they will be receiving and the knowledge that the jeans are hand sewn. Manufacturing and raw materials will not be affected with the proposal both therefore eliminating unnecessary costs and allowing prices to be reasonable for the customers, which creates more value for differentiation.

LEADEERSHIP TQM CONTEXT

The U.S. rebound has energized the search for new management strategies. The reason: The rebound has raised the stakes as overseas rivals work to catch up -- some with management theories of their own. A key U.S. management strategy was crafted by Hammer, the consultant, and called "Re-engineering," designed to help companies strip out waste. Sometimes, that made some workers superfluous, bringing forth another strategy: "Downsizing," the painful rounds of layoffs that remain a key reason why management theories meet with skepticism and resistance by workers. Yet, many of these strategies make sense, proponents say. "Total Quality Management," or TQM, shows firms how to improve via an unfailing focus on the customer satisfaction. TQM and "Empowerment" -two strategies used at the local Clorox plant -- give workers close to the action more say in how jobs get done. And "Knowledge Management," one of the newest theories, tries to survey, inventory and spread throughout the company the crucial know-how that exists only in workers' heads. Unfortunately, the search for the "silver bullet" can become its own burden. The typical company finds itself using an "astonishing" 14 of the 25 most popular tools, according to another study published by Consultants News. So why the allure? According to the Consultants News study, 70 percent of managers surveyed say companies that use "the right" tools are more likely to succeed. But the search for "the right" tools can turn a company into a Whitman's sampler of management theories. Even a partial list of the most popular is lengthy: Benchmarking, Competitive Gaming, Core Competencies, Cycle-Time Reduction, Groupware, Knowledge Management, Mission and Vision Statements, Re-engineering, Self-Directed Work Teams, Value-Chain Analysis and, the granddaddy of the theories, TQM. Despite the heavy use, dissatisfaction runs high. In one survey, 77 percent of the respondents said management tools promise more than they deliver. That's partly what happened to San Francisco-based Levi Strauss, the last U.S. clothing maker to own and run domestic factories. Making jeans is labor-intensive because most of the process can't be automated. Thus, as consumer tastes shifted and competition escalated from countries where labor costs are incredibly low, Levi couldn't just counter with technology. It tried to swap business models to cut costs and protect jobs.