Executive Summary

This case study analyzes the Levi Strauss and Companys

production and operations management. Levi Strauss & Co is an
American Jeans and Casual Wear manufacturer. The company is
founded by Levi Strauss on 1853. As of now, it runs four brands
which are Levis, Dockers, Denizen and Levi Strauss & Co.
According to their company website, their brands are among the
most celebrated names in the history of apparel. They are
recognized for their quality, originality and integrity.

With

the analysis of the operations management of the company, it is

observed that they are keen in protecting the environment. In
their layout and process design, they pioneer in practices that
reduce the use of energy, water, chemicals and other materials in
the apparel activity. The company also implements its own Code of
Conduct to ensure having a good performance of its suppliers. In
order to achieve good quality of the products, the company has
established research and development facilities. The human
resource department of the company also gives competitive salary
to its employees however some problems occurs in the workplace
since the company is using team approach that leads into
unexpected array of problems in the company. The problems
observed in the production and operation management are: first
no good quality control is established and second problems

arise in the human resource area of the company. This analyses

how to address these problems and how they are to be implemented.
Description of the Production and Operations Management
Layout and Process Design
The process of Levi Strauss & Co. begins with outsourcing of raw
materials from a different suppliers. Fabrication process is done
once the raw materials are in hand. The production company has
its own unique process and specialized equipment. However, the
labor force in the company is very necessary. Specialized tasks
like sewing and putting of buttons need attention which can be
coming from the workers. Semi-finished products are delivered to
the washing process. The washing process of the products is
substantial part of the process since it is used as part of the
quality control of the products. When the washing process if
finished, the products will to cleaning, ironing, tagging, total
inspection and packaging and be ready to distribution.

After the

distribution process customers now buy the Levis products. One

part of the lifecycle of products of Levis is the recycling
process which the consumers have the vital role. Used jeans can
be recycled to make another new one which will lessen the
consumption of cotton.

Sometime in 2013, Levi Strauss & Co. introduced their Wellthread

initiative which implements sustainable design and production
process that benefits consumers, apparel and the environment.
Such initiative will have design that complements with
durability, anticipates rise of clothing recycling, modifies
consumer behavior through design and also tightening up the
manufacturing process of the company.
The company uses more efficient, more sustainable practices from
the environment to the closets of the consumers. Low-impact
production, crop preservation, water and energy savings are built
into every part of their production process.
Planning and Control Mechanism
The Levi Strauss & Company generated a Code of Conduct Management
Systems Guidebook that is used for improving Code of Conduct
performance. It is a tool in order to provide a tool that would
guide the suppliers.

This management system is used for

incorporating code of conduct goals and priorities into routine

operations. Given this code of conduct, the company can compel
its suppliers to demonstrate sound code of conduct management and
are prepared to delist those that fail to do so.

Quality
With regards to ensuring the quality of the products of the
company, Levis has established a pioneering research and
development facility called the Eureka Innovation Lab. The
facility has tools necessary to enable the product, technical and
design teams to leapfrog the competition. The Eureka consists of
30 employees who are dedicated to hands-on testing and developing
prototypes. With the help of this R&D facility, the quality of
the companys product will be possible to achieve.
Human Resource
Levis Human Resource starts with recruitment using the Levis
Human resource Recruitment and Selection Process. It includes
personal interview which is a tool to look into the selected
candidates communication and movement skills. After the
selection process and when an applicant is selected for a job,
there will be a training program called Training and Coaching for
about six (6) months. Such program involves trainings which will
enhance the technical and personal skill of the trainees to carry
out their specific jobs. Training development also includes
language training, fashion trends pick up training, product
training and enhancement of skills on how to launch the designs
in the market. The Human resource of Levis is focused on
attracting, developing and retaining the top talent in the
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industry by building a culture of ownership, high-performance and

pride.
The company also offers a total compensation package that
includes a competitive salary and a wide array of benefits. Levis
also has established a foundation which benefits its employees.
The Red tab foundation is created as a financial safety net for
the employees. The funding is coming from the employees and
retirees worldwide, descendants of Levi Strauss and other company
shareholders. Donations coming from private individuals are also
considered by the foundation.
In 1992, the company directed its U.S. plants to abandon the old
piecework system, under which a worker repeatedly perform a
single, specialized task and was paid according to the amount of
work he or she completed. Under the new system, there are
groupings that are composed of 10 to 35 workers who will share
the tasks and be paid according to the total number of clothing
the team accomplished. The company figured that this would cut
down on the monotony of the old system and enable stitchers to do
different to do different tasks, thus avoiding repetitive-stress
injuries.

Problems Found in Production and Operation Description

A. Poor quality control and human resource dilemma

1. Evidence of Problem
In the analysis of the Production and Operation
description of Levi Strauss & Co., it is evident that its
quality control for the finished product is quite
lacking. Indeed, the company makes sure that the quality
of the products will be met but the procedures intended
to ensure that a finished product adhered to the set of
criteria is lacking. Another problem with the company is
the concept on having teams in the workplace even though
the labor union agreed to the idea. The employees noticed
that their pay from the company was shrinking when the
team-idea was started. With the production facilities
that are operated by workers that perform specific tasks
there will be an inequality regarding the speed on how
the workers their tasks.
2. Effects of the Problem
Many customers of Levi Strauss & Co. are having
complaints regarding the quality of the products that
they buy at the company. If this problem will continue,
it could give the company major drawbacks to them. Bad
reputation can affect the sales of the company and soon
it will have snowball effect to different units of the
company. In relation with the problem of the employees of
the company, its effect will generally be acquainted on
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the services that they will provide. If the issue will

not be resolved, there will be a tendency that these
employees will rebel to the company and will not do their
job properly.
B. Decline of Sales of the Company
1. Evidence of the Problem
According to Bloomberg, the sales of Levi Strauss &
Company for the recent years have been plummeting. This
is due to the growing sportswear trend that affects the
sales of jeans. Many people now are more health conscious
and that will be the time where different brands of
sportswear can grab the chance in introducing their
products to the market. One reason that supports the
decline of sales of the company is that the idea of
wearing jeans can be a great savings to a consumers.
Since jeans are wear and tear apparel, it means that
consumers will not buy a new one as long as they can
still wear their jeans. Such behavior of consumers will
have an impact to the sales of the company.
2. Effect of the Problem
When sales of a company declines it can greatly affect
different areas of the company. With the growing tension
between the workers and employers of the company, an
additional problem like will more likely to aggravate. If
the market of denim jeans will fall, there will be a
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tendency to cut its workforce in order to uphold its lowcost production while striving in getting back it sales.

Strategic Alternative for Solving Problems

1. Improvement of Quality Control on the Company
A. Benefits of alternative 1
Enhancement of the quality control of the company will
detect error at the inspection level of the production
process which can also reduce the cost during
inspection time. It could also lead to more uniform
quality of production. A good quality control can
reject number of rejects and saves the cost of having
materials. It can detect the bottlenecks and trouble
spots in the production process.
B. Costs of alternative 1
If the company wants to improve its quality control,
then costs in implementing such improvements will be
definitely incurred.

The company could entail as high

as 15 to 20 percent of sales revenue and sometimes as

high as 40 percent of total operations. Once the
improvement of quality control will be successful,
appraisal and prevention costs will also be incurred.
2. Performance of Method analysis and Work Measurement
Techniques
A. Benefits of alternative 2

With the help of administering work measurement

techniques, the company can plan on what are the steps
in improving its manpower resources. It can help to
estimate the number and type of employees who are
required to do the job. Work measurement can also be
used for production planning and scheduling, cost
reduction and control and can be a basis for inventing
incentive schemes for employees. This can encourage the
employees to work fast and efficiently. Along with work
measurement, the company must also have method analysis
in order for them to study what will be the underlying
effects on how the employees will behave depending on
the nature of their work.
B. Costs of alternative 2
Method analysis and work measurement techniques need
the consultation of experts that are able to analyze
and interpret the outcome of the study. Hiring such
professionals subjects the company in acquiring
additional expenses.

The implementation of the outcome

of the study will also make the company to burden the

expenses.
Selection of strategic alternative and implementation

A. The selected strategy for this case are to improve the

quality control of the company as well as implementing
method analysis and work requirements.
B. It is recommended that both strategies must be
implemented because it directly effects the status of the
revenue of the company. Employees must be given
importance because they are one of the contributors in
achieving the strategic development of Levi Strauss and
Company.

However, it will not be enough if the problems

regarding the workforce of the company is the only one

solved. Having a strong and efficient workforce will not
determine the success of a company. Improvement of
quality control can address the impending decline of
sales of the company. Quality of a product is the bread
and butter of Levi Strauss and Company thus quality
control will not be neglected.
Action Plan
In setting up a good quality control is to select the proper
procedures to implement like choosing the statistical criteria or
control rules and the number of control measurements. If the
right procedure is identified, it must be properly implemented.
The company can use a quantitative planning process that can be
implemented with graphic tools. After these procedures, a better
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quality control strategy is formulated that will minimize cost

while maximizing quality of the products manufactured by the
company. It is also recommended that for improvement of the
quality control, the company can employ a three-stage design in
which the first stage provides high error detection, second stage
low false detection and third stage prescribes that length of
the analytical run.
With concern to the strategy needed to address the problem
on the dissatisfaction of the workforce on the company, it can
hire consulting firms and analysts to have method analysis and
work measurement techniques. The outcome of the study will be the
guide of the company on how they will address the certain
problem.

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References
Books
N. Slack, S. Chambers, R. Johnston, Operations Management, 2010,
6th Edition
Journals
Levi Strauss & Company, Annual Report, 2013
Levi Strauss & Company, Code of Conduct Management Systems, 2005
R. T. King Jr., Jeans Therapy, The Wall Street Journal, May 20,
1998, p. A1.

Websites
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http://thethrivingsmallbusiness.com/12-steps-to-implementing-aquality-management-system/
http://www.levistrauss.com/who-we-are/#message-from-the-ceo/
http://www.ncbi.nlm.nih.gov/pubmed/14629798
http://www.rafautomation.com/Manufacturing-And-IndustrialAutomation-Solutions-From-RAF-Automation/bid/335036/11-Tips-ForImproving-Quality-Control-Without-Increasing-Costs

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