Chabot Wallpaper Company Case

1093 Words Nov 25th, 2012 5 Pages
1. What are the major issues and problems facing Chabot?
Chabot faces a variety of issues and problems in the wallpaper industry. First off, as the number of wallpaper manufacturers decreases over each year, remaining company’s market share is increasing, this in turn is creating more competition among these companies. Depending on the market share, some of these companies may be exerting more power and control over retailers than others are able to. Wall coverings outside of wallpaper are also eating at the profits of wallpaper manufacturers as these manufacturers must not only produce a good that is highly valued but is also offered at a reasonable cost. When wallpaper pattern designs become obsolete, markdowns are necessary to help
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Chabot is in a difficult position because retailers are pressuring Chabot to maintain lower in-store inventory levels while consumers are pressuring Chabot to adequately provide a wide selection of wallpaper. Chabot is creating demand by providing a wide selection of wallpaper that appeal to consumers, but may be providing too large of a selection that production lead time suffers. More wallpaper patterns are slowing down the manufacturing process because changing over from a line pattern increases lead time by up to 2 hours. Chabot is constraining itself to produce patterns in one batch run which builds up the amount of production time necessary to complete the rest of the wallpaper patterns. Chabot is also wasting a lot of time and money on creating separate packaging, labels, and SKU’s for each retailer. Chabot is also wasting possible storage space at DC’s. 2. What would you recommend to solve these problems?

Chabot needs to increase the flexibility in its supply chain. Chabot is an innovative product manufacturer trying to utilize an efficient supply chain. In order to be able to meet demand, the company needs to deploy excess buffer capacity. Lead time is not up to par so Chabot needs to increase its inventory if it plans to meet unpredictable demand. This will also help increase Chabot’s level of

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