VF’s unique approach to partnering with select suppliers, known as The Third Way, shares our best practices with suppliers who have a desire to make their facilities among the highest quality, socially progressive and cost effective in the industry.
The Third Way merges expertise in engineering, social compliance, environmental leadership and knowledge of and experience in the local marketplace.
The Third Way is a concept that helps us create and grow mutually beneficial, long-term relationships with strategic suppliers. Building on what we have learned in operating our owned manufacturing facilities, the Third Way is a long-term strategic partnership that yields significant shared benefits for the workers and their communities, as well as our customers, employees, and shareholders.
Once VF and a factory agree to implement the Third Way program, VF engineers and trainers work closely with factory owners to implement manufacturing best practices. Steps are taken to improve safety and productivity and ensure that water, electricity and other resources are used wisely. The Third Way program also incorporates VF’s approach to employee-focused workplaces that recognize and celebrate individual and team achievements, leading to improved morale, decreased turnover and decreased absenteeism.
The Third Way creates value for everyone involved. Our multi-year memoranda of understanding with Third Way suppliers incorporate significant capacity targets, guaranteeing production for factory owners. We benefit from knowing our products are produced in a responsible manner with the level of quality we expect.
A PROVEN MODEL FOR IMPROVEMENT
In 2007, VF instituted its first Third Way operation on one floor of an eight-story facility in Dhaka, Bangladesh. Today, VF’s Third Way operates on six of the facility’s eight floors. Efficiency has improved by 23 percent for cutting, 41 percent for sewing and 52 percent for finishing — while product defects decreased by 8.5 percent. Employee morale has improved as well. When hiring, the facility looks to ensure prospective employees are matched with jobs that complement their skills. Employees are recognized individually with birthday, anniversary and trainee graduation celebrations, thereby improving labor relations.
VF’s Third Way facility in Mahona, Bangladesh is a model facility for sustainability and safety.
Based on this success, VF partnered with a local factory owner to design and build a new, state-of-the-art Third Way facility just north of Dhaka in Mahona, Bangladesh. The building encompasses cutting-edge energy efficient design and equipment. With the first phase of production due to be completed in October 2014, the facility integrates VF’s commitment to environmental and social compliance. By 2019, it is estimated that the facility will produce seven million pairs of jeans each year.
Today, we have Third Way facilities in Bangladesh, Cambodia, the Dominican Republic and Nicaragua. In the future, we hope to increase production at Third Way facilities to 40 percent of our total manufacturing.