Lulemon’s CEO’s blame on supply chain issues for poor performance a stretch ?

An article in the Wall Street Journal (September 12, 2013) describes a conference call in which Lululemon’s CEO blamed supply problems associated with Luon, a stretch fabric that was the cause of see through black yoga pants that had to be recalled, for lowering earnings estimates. The company blamed its single supplier as a problem and claims it has two current suppliers with a third to be added soon. In addition, she described capacity related delays in its “commercialization” department, responsible for products from design to delivery. The result was delayed deliveries of fall products, with stores having to rely on summer merchandise to last them through August. Do these product delivery delays, the result of earlier product design mishaps, sound reasonable or a “stretch” as the reporter asserts ? Is increasing the number of suppliers the right supply chain response to product design problems or will it further delay correction in the event of a design issue that has to be corrected with new production ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , , , , , . Bookmark the permalink.

One Response to Lulemon’s CEO’s blame on supply chain issues for poor performance a stretch ?

  1. Yuntao Guo says:

    It sounds reasonable, but increasing the number of suppliers might not be a good solution.
    The core supplier program might be more suitable solution and it is easier to monitor a few suppliers than stock up in case some suppliers failed.

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