Supply Chain Management - L.L. Bean Essay

2520 Words Oct 26th, 2011 11 Pages
Mark Cronin
MBA 600 – Production & Operations Management
Final Project Report - June 2, 2003

Supply-Chain Management

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.
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During the past year (Fiscal 2002), our division undertook a strategic initiative to

transition from marketing itself as a separate or sub-brand to being the liquidation channel for the

L.L.Bean brand. This was no small feat and a point that should not be glossed over or taken

lightly in an organization as large as L.L.Bean. There were many meetings at all levels of the

company to help employees, who were still with the company after two major downsizing

periods, understand the significance of this change in philosophy. There are currently four sub-channels used to achieve the liquidation and inventory

management goals of the L.L.Bean Factory Store Division:

1.) Mail Order 2.) E-Commerce 3.) Outlet Stores 4.) Off-Site Sale Events

Current sources of product for the Factory Store Division are discontinued merchandise,

customer returns not suitable for full price sales and special purchases.

Special purchases can be defined in the following categories:

Overstocks, Cancellations and Irregulars – This is L.L.Bean labeled product available to the open

market by our vendors.

Manufacturing Irregulars – All saleable irregulars produced in L.L.Bean manufacturing facilities.

Make Ups – Excess fabric, yarns and materials owned by L.L.Bean made into product under the

“L.L.Bean Factory Store” label.

Program Buys – Product programmed

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