MBA 600 – Production & Operations Management
Final Project Report - June 2, 2003
Executive Summary – By adopting five new proposed initiatives, the L.L.Bean Factory Store Division can
provide brand appropriate product to customers and it can also improve its in-stock position and
inventory turns while reducing costs in the Supply-Chain and management of corporate
inventory. If we leverage a Special Purchase strategy and negotiate with existing vendors to sell
us all their manufacturing defects of existing L.L.Bean products at an agreed upon reduced rate,
we can provide better costs for the full price products and higher cost recoveries for deleted
merchandise. …show more content…
that are caused by sell-through or discontinued merchandise and second quality return
availability. The Chief Merchandising Officers review all selections to insure brand consistency.
Merchandising for the Factory Store Division is currently managed and organized by
channel. One Merchandiser focuses on the Direct Channels (Mail Order & E-Commerce).
Another Merchandiser focuses on the merchandising and allocation of product to the Factory
Stores and Off-Site Sale Events.
Proposed State - Balance of Sales – Because the size of programs being deleted by the full price
brands is decreasing, we need to budget properly and reduce the number of Mailed
Sale Catalogs and increase the number of Factory Stores and Sale Web Pages. By reducing the
circulated space of sale products available through mail order and increasing the overall amount
of floor space in Factory Stores and product pages on the sale web site, we will shift sales toward
the less expensive sales channels. This shift makes sense since forecasting sales of full price
products has become more accurate. The amount of available deleted product in a given program
needs to be sizable enough to warrant the expense of exposure in a mailed catalog. The
Corporate Strategy this