After 100 Years, a Year is the Limit

After 100 Years, a Year is the Limit

February 18, 2018

L.L. Bean has changed its 106-year old return policy. Returns will now be limited to a one-year time period.

If that sounds generous, keep in mind that for over a hundred years, the company has offered an ‘unlimited’ customer return policy.

Over the last five years, the viral nature of social media has accelerated losses on returns to $250 million. These products are what the company calls “destroy quality”, items so used or damaged they’re sent to landfills.

This post is based on the CBS News article, L.L. Bean changes its unusually generous product return policy, by The Associated Press, February 9, 2018. 

Discussion Questions
1. How might the merchandise return policy change impact L.L Bean’s order winner(s)?

Guidance: Students should review the concept of order qualifiers/order winners.  Ask students to identify the order winner(s) that L.L. Bean had under the old customer return policy.  Students should then compare the new customer return policy to competing firms in the retail industry.  Does the new return policy change L.L. Bean’s order winner(s)?

2. With over $250 million of returns at L.L. Bean over the last five years, identify the supply chain issues created by Continue reading

Facebook
Twitter
Whole Foods and Prime Time Delivery

Whole Foods and Prime Time Delivery

February 17, 2018

Amazon is piloting free delivery within two hours from a Whole Foods location for Prime members. One hour delivery will also be offered for $7.99.

This post is based on the CBS News article, Amazon to deliver Whole Foods groceries for Prime members, by Aimee Picchi, February 8, 2018. 

Discussion Questions
1. What additional capacity will be required for Amazon to offer fast delivery? How can this additional capacity be generated without requiring significant resources?

Guidance: This is a thought question for students to discuss.  Students should note the use of technology to quickly schedule and route truck deliveries, possible changes to service design within Whole Foods to free personnel to drive the trucks, and potentially outsourcing to a 3PL to implement the shipping service.

2. How does Amazon’s acquisition of Whole Foods change the supply chain system for Amazon?

Guidance: Students should be asked to explore the differences in inventory perishability between Amazon’s traditional products and grocery products.  How does perishable inventory impact the design of a lean supply chain?

 

Facebook
Twitter
Tesla Needs To Build Fast and Furious

Tesla Needs To Build Fast and Furious

January 24, 2018

Tesla has had multiple issues with production of its new Model 3 car. They’ve missed targets for volume production again and again, producing only 1% of the cars originally forecast for 2017. Tesla is struggling with the learning curve, and likely with the design of production processes, to mass produce a quality car.

Production rates have increased in recent weeks. Is the worst behind them?

This post is based on the Bloomberg article,  Tesla’s Model 3: Slowest. Rollout. Ever., by Dana Hull, January 11, 2018.

Discussion Questions
1. How could learning curve theory be applied to help Tesla produce the Model 3 in a timely manner?

Guidance: Review the learning curve concepts. Students should be asked how the learning curve could be applied to the production of the Model 3.  This discussion could include mentions of the learning curve for parts of the production process, the entire production process, training of workers, etc.

2. What manufacturing process should Tesla consider to mass produce the Model 3?

Guidance: Review manufacturing processes. Students should be asked to develop a list of pros and cons for each manufacturing process option as related to the Model 3.

Facebook
Twitter