2. What would you recommend to solve these problems?
Our solution to Chabot Wallpaper’s customer problem involves three steps. They are to evaluate and discontinue the number of ineffective product offerings, identify and develop accuracy in the forecast by partnering with Lowes for collaborative information sharing of in store inventories, and to develop an infrastructure of cross docking platforms to allow customized shipping quantities of products by textures, colors and patterns.
In the letter dated November 1, 20xx, from Lowes Executive Vice President of Merchandising, Karena Bailey, it is identified that there are problems with inventory turnover leading to mark downs which erode profits. The costs of carrying inventory on wallpaper can be as high as 50%, per 2010 Academic Case Study Series, Chabot Wallpaper Company, Thomas, R., ...view middle of the document...
Efficiency in the deployment of customized order sizes, labeling and styles will help regain the customer service focus that Lowes requires. Cross docking will allow Chabot Wallpaper the opportunity to fulfill the demand of retailers like Lowes by customizing the orders to data collected by the RFID’s for replenishment and consumer demand
4. Why are your solutions justified?
Lowes Executive Vice President of Merchandising showed his dissatisfaction in the letter to Challbot Wallpaper and requested that Chalbot Wallpaper should take a lead and determine how Lowes can reduce the amount of non-productive inventory, reduce the amount of markdowns and have bestselling items stock. The first proposed step will help Chalbot Wallpaper to improve customer satisfaction. By Radio frequency identification (RFID) implementation in product labels will allow for real-time data collection of inventory and will signal to the retailer and supplier that inventories need replenishment as well to provide information about what product offerings are selling well. This kind of data collection will aid Chabot Wallpaper to analyze the market; regional demand and products on shelve as per their customer needs.
Data from Lowe’s Wallpaper Assortment listing Wallpaper Category and YTD Sales $ help to identify slow moving items and the items which are generating more revenues.
Efficiency in the deployment of customized order sizes, labeling and styles will help regain the customer service focus that Lowes requires. Cross docking will allow Chabot Wallpaper the opportunity to fulfill the demand of retailers like Lowes by customizing the orders to data collected by the RFID’s for replenishment and consumer demand to stay in stock for best selling items thereby reducing the significant markdown cost which has been increasing over the past three years as stated in the Annual Income Statement of Chalbot Wallpaper
2006 2007 2008 2009
4,320,000 6,235,000 7,890,009 12,000,450