Discussion Thread: Fabulous Footware At the end of Chapter 12, please read the Fabulous Footware Case Study and respond to all three of the case questions.. For this Discussion, you will post one thre

Production at both the compan y’s plants totals 12,500 pairs per da y. The two factories are located within a r adius of 60 miles of Chicago: one at Centerville, which produces 4,500 pairs per da y, and the other at Meadowvale, which produces 8,000 pairs per da y. Compan y headquarters is located in a building adjacent to the Centerville plant.

It is difficult to give an accur ate picture of the number of items in the company’s product line. Shoes change in style perhaps more r apidly than any other style product, including garments. This is chiefly because it is possible to change production processes quickly and because, historically , each company, in attempting to get ahead of competitors, gr adually made style changes more frequently. At present, including both major and minor style changes, F abulous Footwear offers 100 to 120 different products to customers each year.

A partial organizational chart, showing the departments involved in this case, appears in Exhibit 12.9 . Exhibit 12.9 Partial Organization Chart of Fabulous Footwear Competitive Structure of the Industry Details Very large gener al shoe houses, such as International and Brown, carry a line of women’s shoes and are able to undercut prices charged b y Fabulous Footwear, principally because of the policy in the big companies of producing large numbers of “stable” shoes, such as the plain pump and the loafer. They do not attempt to change styles as r apidly as their smaller competitors. Thus, without constant changes in production processes and sales presentations, they are able to keep costs substantially lower.

Charles F. Allison, the president of F abulous Footwear, feels that the only wa y for a small independent compan y to be competitive is to change styles frequently, taking advantage of the flexibility of a small organization to create designs that appeal to customers. Thus, demand can be created and a price set high enough to mak e a profit. Allison, incidentally , appears to have an artistic talent in styling and a record of successful judgments in approving high- volume styles over the years.

Regarding how Fabulous Footwear differs from its large competitors, Allison has said: Yo u se e, B ro wn a n d I n te rn atio nal Sho e C omp an y b oth pro duc e hun dre ds o f t ho usan ds o f t he s a me p air of s ho es. The y s to re t he m in in ven to ry a t t he ir fa cto rie s. The ir cus to me rs, t he la rg e who lesa le rs a n d re ta ile rs, s imp ly k n ow the ir lin e a n d s e n d in o rd ers . The y d o n ot ha ve t o c h an ge s ty le s n ea rly a s o fte n a s we d o. S o me time s I wis h we c o uld d o t ha t, t o o. I t ma kes f o r a muc h more s ta b le a n d o rd erly s y ste m. The re is a ls o le ss f ric tio n betwe en p eo p le in sid e t he c o m pan y. The s a le sp eo p le a lwa ys k n ow wha t t he y’re s e llin g; t he p ro duc tio n p eo p le k n ow wha t is e x p ecte d o f t he m. The p la nt p ers on nel are n ot s ho ok up s o o fte n b y s o me on e c o min g in o n e mo rning a n d t a mp erin g wit h the ir ma chin e lin es o r the ir sc he dule s. The s ty lin g p eo p le a re n ot s ho ok up s o o fte n b y t he p la nt s a y in g, “ W e c a n ’t d o y o ur new sty le t he wa y y o u wa nt it .” T o help F abulous F ootwear be more competitive against larger firms, Allison recently created an e-commerce and social media department. Although his main interest was in mark eting over the Internet, he also hoped new technology would help reduce some of the internal friction b y giving people an easier way to communicate. He invested in sophisticated new information technology and hired consultants to set up a compan y intranet and provide a few da ys’ training to upper and middle managers. Katherine Olsen came on board as director of e-commerce, charged primarily with coordinating Internet mark eting and sales. When she took the job, she had visions of one da y offering consumers the option of customized shoe designs. However, Olsen was somewhat surprised to learn that most employees still refused to use the intranet even for internal communication and coordination. The process for deciding on new styles, for example, had not changed since the 1980s. 516 Major Style Changes The decision about whether to put a certain style into production requires information from a number of different people. Here is what typically happens in the company. It ma y be helpful to follow the organization chart (see Exhibit 12.9 ) tracing the procedure. M. T . Lawson, the styling manager, and his designer, John Flynn, originate most of the ideas about shape, size of heel, use of flat sole or heels, and findings (the term used for ornaments attached to, but not part of, the shoes—bows, str aps, and so forth). They get their ideas principally from reading style and trade magazines or by copying top-flight designers. Lawson corresponds with publications and friends in large stores in New Y ork, Rome, and Paris to obtain pictures and samples of up-to-the-minute style innovations. Although he uses e- mail occasionally, Lawson prefers telephone contact and receiving dr awings or samples by overnight mail. Then, he and Flynn discuss various ideas and come up with design options.

When Lawson decides on a design, he tak es a sketch to Allison, who either approves or disapproves it. If Allison approves, he (Allison) then passes the sketch on to L. K. Shipton, the sales manager, to find out what lasts (widths) should be chosen. Shipton, in turn, forwards the design to Martin Freeman, a statistician in the sales department, who maintains summary information on customer demand for colors and lasts.

To compile this information, Freeman visits salespeople twice a year to get their opinions on the colors and lasts that are selling best, and he k eeps records of shipments by color and by last. For these needs, he simply totals data that are sent to him b y the shipping foreman in each of the two plants.

When Freeman has decided on the lasts and colors, he sends Allison a form that lists the colors and lasts in which the shoe should be produced. Allison, if he approves this list, forwards the information to Lawson, who passes it on to Jenna Richards, an expert pattern mak er. Richards makes a paper pattern and 517 then constructs a prototype in leather and paper. She sends this to Lawson, who in turn approves or disapproves it. He forwards any approved prototype to Allison. Allison, if he, too, approves, notifies Lawson, who tak es the prototype to Paul Robbins, assistant to the superintendent of the Centerville plant. Only this plant produces small quantities of new or experimental shoe styles. This is referred to as a “pilot run” by executives at the plant.

Robbins then literally carries the prototype through the six production departments of the plant—from cutting to finishing—discussing it with each foreman, who in turn works with emplo yees on the machines in having a sample lot of several thousand pairs made. When the finished lot is delivered by the finishing foreman to the shipping foreman (because of the importance of styling, Allison has directed that each foreman personally deliver styling goods in process to the foreman of the next department), the latter holds the inventory in stor age and sends one pair each to Allison and Lawson. If they approve of the finished product, Allison instructs the shipping foreman to mail samples to each of the compan y’s twenty-two salespeople throughout the country . Olsen also receives samples, photos, and dr awings to post on the web page and gauge customer interest.

Salespeople have instructions to take the samples immediately (within one week) to at least 10 customers. Orders for already established shoes are normally sent to Ralph Ferguson, a clerk in Shipton’ s office, who records them and forwards them to the plant superintendents for production. However, salespeople have found by experience that Martin Freeman has a greater interest in the success of new “trials,” so they rush these orders to him b y overnight mail, and he in turn places the first orders for a new style in the interoffice mail to the plant superintendents. He then sends off a duplicate of the order, mailed in by the salespeople, to F erguson for entering in his statistical record of all orders received b y the company.

Three weeks after the salespeople receive samples, Allison requires Ralph F erguson to give him a tabulation of orders. At that time, he decides whether the salespeople and the web page should push the item and the superintendents should produce large quantities, or whether he will tell them that although existing orders will be produced, the item will be discontinued in a short time.

According to Allison, the procedures outlined here have work ed reasonably well. The a v era ge t ime f ro m whe n L aws on d ecid es o n a d esig n un til we notif y t he C en te rv ille p la nt t o p ro duc e t he p ilo t run is t wo we ek s to a mo nth. Of c o urs e, if we c o uld s p eed t ha t up , it wo uld ma ke the c o mp an y j us t t ha t muc h m ore s e cure in s ta y in g in t he g a me a ga in st t he b ig c o mp an ie s, a n d in t a k in g s a le s a wa y f ro m our co mp etit ors . The re s e ems t o b e e n dle ss b ic kerin g a mo ng p eo p le aro un d he re in volv ed in t he s ty lin g p ha se o f t he b us iness. Tha t’s t o b e e x p ecte d whe n y o u ha ve t o mo ve f a st— the re is n’t muc h time t o s to p a n d o b se rv e a ll of t he s o cia l ame nit ie s. I ha ve n ev er tho ught t ha t a f o rma l o rg an iz atio n c ha rt wo uld b e g o od in t his c o mp an y— we ’v e wo rked o ut a c us to ma ry s y ste m here t ha t fun ctio ns we ll. M. T . Lawson, manager of styling, said that within his department all work seems to get out in minimum time; he also stated that both Flynn and Richards are good emplo yees and skilled in their work. He mentioned that Flynn had been in to see him twice in the last year: To in quire a b out his [ F ly nn’s ] f ut ure in t he c o mp an y. H e is 33 y ea rs o ld a n d ha s t hre e c hild ren. I k n ow tha t he is e a ger to ma ke mo ney, a n d I a ssure d him tha t o v er the y ea rs we c a n r a is e him rig ht a lo ng f ro m the $65, 000 we a re n ow pay in g. A ctua lly, h e ha s learn ed a lo t a b out s ho e s ty le s s in ce we hire d him fro m the d esig n dep art me nt o f a f a b ric c o mp an y s ix y ea rs a go . John Flynn revealed: I wa s a ctua lly b eco min g d is sa tis fie d wit h this j o b . A ll sho e co mp an ie s c o p y s ty le s— it’s a g en era lly a cce p te d p ra ctic e w ithin the in dus try . B ut I ’v e p ic ked up a re al fe el fo r desig ns, a n d s e v era l time s I ’v e s ug geste d t ha t t he c o mp an y ma ke a ll its o wn o rig inal sty le s. W e c o uld ma ke F a b ulo us F o o twe ar a s ty le le ad er an d a ls o in cre ase o ur volume . W he n I a sk L aws on a b out t his , he s a y s it t a k es t o o muc h time f o r the d esig ner to c re ate o rig inals — tha t we ha ve a ll we c a n ha ndle t o d o r e se a rc h in t r a d e ma ga zin es a n d ma inta in c o n tr a cts f e ed in g us t he re sult s o f e x p ert s. B esid es, he s a y s o ur sty le s a re s ta n din g t he t e st o f t he ma rketp la ce . Projects X and Y Flynn also said that he and Martin Freeman had frequently talk ed about the styling problem. They felt that: 518 Allis on is re ally a g re at p re sid en t, a n d t he c o mp an y s ure ly wo uld be lo st wit hout him. H owe ver, we ’v e s e en t ime s whe n he lo st a lo t of mo ney o n b ad j ud gme nts in s ty le s. N ot ma ny t ime s— perha ps six o r se v en t ime s in t he la st e ig ht een mo nths . A ls o, he is , o f co urs e, e x tre me ly b us y a s p re sid en t o f t he c o rp ora tio n. H e mus t look a fte r ev ery thin g f ro m fin an cin g f ro m the b an ks t o b arg ain ing wit h the un ion. Th e re sult is t ha t he is s o me tim es un av aila ble t o d o his s ty lin g a p pro vals f o r se v era l d ay s, o r ev en two we ek s. I n a b us iness lik e t his , t ha t k in d o f d ela y c a n c o st mo ney. I t a ls o ma kes him slig htly e d gy. I t t e n ds, a t t ime s whe n he ha s ma ny o the r thin gs t o d o, t o ma ke him look q uic kly a t t he s ty le s we s ub mit , o r the p ro to ty p es R ic ha rds ma kes, o r ev en t he f in ishe d s ho es t ha t a re s e n t f o r ap pro val b y t he s hip pin g f o re ma n.

So me time s I wo rry t ha t he ma kes t wo k in ds o f e rro rs. H e s imp ly rubber-s ta mp s wha t we ’v e d on e, whic h ma kes s e n din g t he se thin gs t o him a wa ste o f t ime . A t o the r time s he ma kes s n ap jud gme nts o f his o wn , o v erru ling t ho se o f us who ha ve s p en t s o muc h time a n d e x p ert ise o n t he s ho e. W e d o t hin k he ha s g o o d jud gme nt, b ut he hims elf ha s s a id a t t ime s t ha t he wis hes he ha d mo re t ime t o c o n ce n tr a te o n s ty lin g a n d a p pro val o f p ro to ty p es a n d f in al p ro duc ts . Flynn further explained (and this was corrobor ated by Freeman) that the two had work ed out two plans, which they referred to as “project X” and “project Y.” In the first, Flynn created an original design that was not copied from existing styles. Freeman then gave special attention to color and last research for the shoe and recommended a color line that didn’t exactly fit past records on consumer purchases—but one he and Flynn thought would have “great consumer appeal.” This design and color recommendation was accepted b y Lawson and Allison; the shoe went into production and was one of the three top sellers during the calendar year. The latter two men did not know that the shoe was styled in a different way from the usual procedure.

The result of a second, similar project (Y) was put into production the next year, but this time sales were discontinued after three weeks.

Problem Between Lawson and Robbins Frequently, perhaps 10 to 12 times a year, disagreement arises between Mel Lawson, manager of styling, and Paul Robbins, assistant to the superintendent of the Centerville plant. Robbins said: The s ty lin g p eo p le d on ’t un ders ta n d wha t it me an s t o p ro duc e a s ho e in t he q ua ntit ie s t ha t we d o, a n d t o ma ke t he c ha nges in p ro duc tio n t ha t we ha ve t o . T he y d re am up a s ty le q uic kly , o ut o f thin a ir. The y d o n ot re aliz e t ha t we ha ve a lo t o f ma chin es t ha t ha ve t o b e a d jus te d a n d t ha t s o me t hin gs t he y d re am up t a k e muc h longer on c e rt ain ma ch in es t ha n o the rs, t hus c re atin g a b ottle neck in t he p ro duc tio n lin e. I f t he y p ut a b ow or str a p in o n e posit io n r a the r tha n a n othe r, it ma y me an we ha ve t o k eep p eo p le id le o n la te r ma chin es while t he re is a p ile up o n t he s e win g machin es o n whic h this c o mp licate d lit tle o p era tio n is p erf orme d.

This c o sts t he p la nt mo ney. F urt hermo re, t he re a re t ime s whe n the y g et t he p ro to ty p e he re la te , a n d e it he r the f o re me n a n d I wo rk o v ert ime o r the t ria l run wo n’t g et t hro ugh in t ime t o ha ve n ew pro duc tio n run s o n n ew sty le s, t o t a k e t he p la nt c a p acit y lib era te d b y o ur sto p pin g p ro duc tio n o n o ld s ty le s. L aws on d oesn ’t k n ow muc h ab out p ro duc tio n a n d s a le s a n d t he who le co mp an y. I t hin k a ll he d oes is t o b rin g s ho es d own he re t o t he p la nt, s o rt o f lik e a me sse n ger boy. W hy s ho uld he b e s o ha rd t o g et a lo ng wit h? H e is n’t g ettin g p aid a n y mo re t ha n I a m, a n d my p osit io n in t he p la nt is j us t a s imp ort an t a s his . Lawson, in turn, said that he has a difficult time getting along with Robbins: There a re ma ny t ime s whe n R ob bin s is j us t un reaso n ab le . I t a k e p ro to ty p es t o him fiv e o r six t ime s a mo nth, a n d o the r min or sty le cha nges t o him six o r eig ht t im es. I t e ll him ev ery t ime t ha t we ha ve p ro ble ms in g ettin g t he se re ad y, b ut he k n ows o n ly a b out the p la nt, a n d t e llin g him doesn ’t s e em to d o a n y g o od . W he n we f irs t j o in ed t he c o mp an y, we g o t a lo ng a ll rig ht, b ut he ha s g o tt e n ha rder an d ha rder to g et a lo ng wit h. Other Problems Ralph F erguson, the clerk in the sales department who receives orders from salespeople and forwards totals for production schedules to the two plant superintendents, has complained that the salespeople and Freeman are bypassing him in their pr actice of sending experimental shoe orders to Freeman. He insisted that his job description (one of only two written descriptions in the compan y) gives him responsibility for receiving all orders throughout the company and for maintaining historical statistics on shipments.

Both the salespeople and Freeman, on the other hand, said that before they started the new practice (that is, when F erguson still received the experimental shoe orders), there were at least 8 or 10 instances a year when these were delayed from 1 to 3 da ys on Ferguson’ s desk. They reported that F erguson just wasn’t interested in new styles, so the salespeople “just started sending them to Freeman.” Ferguson acknowledged that there were times of short dela y, but said that there were good reasons for them: 5 19 They [ the s a le sp eo p le a n d F re ema n] a re s o in te re ste d in n ew d esig ns, c o lo rs , a n d la sts t ha t t he y c a n ’t un ders ta n d t he imp ort an ce o f a s y ste ma tic ha ndlin g o f t he who le o rd er p ro ce d ure , in clud ing b oth old a n d n ew sho e s ty le s. The re m us t b e accur acy. S ure , I g iv e s o me p rio rity t o e x p erime nta l o rd ers , b ut so me time s whe n rus h ord ers f o r ex is tin g c o mp an y p ro duc ts a re p ilin g up , a n d whe n t he re’s a lo t o f p la nnin g I ha ve t o d o t o a llo ca te p ro duc tio n b etwe en C en te rv ille a n d M ea d owv ale , I d ecid e whic h co me s f irs t— pro ce ssin g o f t he se , o r pro ce ssin g t he e x p erime nta l sho e o rd ers . S hip to n is my b oss, n ot t he s a le sp eo p le or Fre ema n. I ’m go in g t o in sis t t ha t t he se o rd ers c o me t o me . The Push for New T echnology Katherine Olsen believes many of these problems could be solved through better use of technology. She has approached Charles Allison sever al times about the need to make greater use of the expensive and sophisticated computer information systems he had installed. Although Allison alwa ys agrees with her, he has so far done nothing to help solve the problem. Olsen thinks the new technology could dramatically improve coordination at Fabulous F ootwear. Every on e n eed s t o b e wo rking f ro m the s a me d ata a t t he s a me time . A s s o on a s L aws on a n d F ly nn c o me up wit h a n ew desig n, it s ho uld b e p oste d o n t he in tr a n et s o a ll of us c a n b e in fo rme d. A nd ev ery on e n eed s a cce ss t o s a le s a n d o rd er in fo rma tio n, p ro duc tio n sc he dule s, a n d s hip pin g d ea d lin es. I f e v ery on e— fro m Allis on d own t o t he p eo p le in t he p ro duc tio n p la nts — wa s k ep t up t o d ate thro ugho ut t he e n tire p ro ce ss, we wo uld n’t ha ve a ll this c o n fus ion an d b ic kerin g. B ut n o o n e a ro un d he re wa nts t o g iv e up a n y co n tro l— the y a ll ha ve t he ir own lit tle o p era tio ns a n d d on ’t wa nt to s ha re in fo rma tio n wit h an yo n e e ls e. F o r ex amp le, I s o me time s don ’t e v en k n ow the re’s a n ew s ty le in t he wo rks un til I g et fin ishe d s a mp les a n d p ho to s. N o o n e s e ems t o re co gn iz e t ha t o n e of t he b ig gest a d van ta ges o f t he I n te rn et is t o he lp s ta y a he ad o f cha ngin g s ty le s. I k n ow tha t F ly nn ha s a g o od f e el fo r desig n, a n d we ’re n ot t a k in g a d van ta ge o f his a b ilit ies. B ut I a ls o ha ve in fo rma tio n a n d id ea s t ha t c o uld he lp t his c o mp an y k eep p ace wit h cha nges a n d re ally s ta n d o ut f ro m the c ro wd . I d on ’t k n ow ho w long we e x p ect t o re ma in c o mp etit iv e us ing t his c umb ers ome , s lo w-mo vin g p ro ce ss a n d p ut tin g o ut s ho es t ha t a re a lre ad y b ehin d t he t ime s. Q uestion s 1. How would you char acterize the structure of F abulous Footwear?

Explain. 2. In what wa ys is the structure appropriate or inappropriate for frequent changes in shoe styles? What structure changes would you recommend? 3. If you were the CEO, how would you get employees to use the new information technology available within Fabulous Footwear?