LuLulemon works hard at providing a sustainable business while maintaining a positive relationship with their customers and their suppliers.
Lululemon follows a front office strategy in the brick and mortar stores and a back office strategy in the operations department. The sales department uses the front office strategy which rests in high customer involvement as the employees cater to the consumers. The employees of the Lululemon stores aim to successfully satisfy customers needs and wants in order to build a strong customer relationship. Employees deal with customers one on one to fulfill orders, make transactions, and deal with returns. When customer orders are placed online, the back office strategy comes into use because there is low customer interaction. At this point, there is little customer interaction because the order is being filled by the employees of the warehouse. The warehouse and distribution work is standardized because it is just fulfilling the right merchandise for each order placed.
Process Structure in Supplier Relationship Management
Lululemon does not own any of their own manufacturing facilities. Therefore, the company outsources to different suppliers facilities both inside America and also to different countries. Due to the success of the company and the spread in globalization Lululemon is able to access different vendors effectively and efficiently. There is a screening process that vendors have to go through before Lululemon agrees to partner with them. Lululemon only partners with vendors who uphold the same ethical and sustainable values as their company. Lululemon promotes sustainability by making a conscience effort to protect endangered rain-forests and their inhabitants. The company does this by not working with suppliers who source materials from ancient or endangered forests. Animals and the environment are a big part of the supply chain sustainability. One of the ways to ensure no animals are harmed in sourcing the materials used in their product lines, Lululemon is certified Responsible Down Standard (RDS). Lululemon is very particular about the raw matericals that the vendors use, such as wool and cotton. Lululemon only partners with suppliers who don't source their cotton from Uzbekisten and who are apart of the Responsible Sourcing Network Cotton Pledge. Also, Lululemon has high standards for wool suppliers as well. The suppliers must use non-mulesed wool and must comply with domestic animal welfare laws. When Lululemon partners up with a vender they actively train, consult, and coach to make sure the vendor is keeping up with the standards set by Lululemon. If vendors do not actively make improvements where required to meet these standards then Lululemon will no longer do business with that vendor. Lululemon only affiliates themselves with suppliers who follow the company's policies and procedures.
Equipment
Inside their brick and mortar stores, Lululemon uses basic equipment to keep the store operating on a day-to-day basis. In the front of the store there is a register, that the employees are trained in using, where customers can make transactions or returns. Additionally, employees use the register and or computers/tablets to place orders for customers that are looking for a specific item that is not in the store. Each of their stores has a inventory system that is uses to keep track of the merchandise.
Pos System -Lululemon uses a "Xstore" Pos system.
It is a Point of Service is a point-of-sale application that provides the
capabilities to carry out day-to-day transactions and conduct daily store activities.
Tasks such as scanning items, applying price adjustments, altering, and printing
receipts as well as processing returns and web orders can be performed. Store
operations including opening the store, managing registers and tills, and closing the
store can be handled through Oracle Retail Xstore Point of Service.
They also use a RFID system called BBR= BackBack Room app on an Iphone. The RFID system uses uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically stored information. It allows store employees use handhelds plus to check inventory without leaving the customer's side, and lululemon also offers an app that enables customers to look up inventory information themselves. They also have a "wand" system that works together with the RFID system . If you are searching for an item, the wand will alert the user with a visual and audio indicator, allowing the user to complete an inventory and search for an item at the same time.
Inventory
Lululemon has a high inventory turnover ratio in order to have effective inventory management. They achieve this by forecasting inventory needs and placing orders based on the estimate of future demand. This method is also known as EOQ model. Stock sells out relatively quick in stores and inventory levels are kept low on purpose as a strategy to generate brand value and urge eagerness for the next line of apparel and upcoming releases of new trends such as new patterns, prints, mesh cutouts and other added detailing.
How they manage their inventory
New technology introduced to the company now allows them to display their entire inventory to customers through an app. In 2015, research showed this app increased sales for all athletic apparel lines. Lululemon's inventory strategy is to overstock inventory through certain seasons and keep inventory low through other seasons. For example, in the beginning of changing seasons, customers often look to create a new wardrobe to accommodate weather conditions. Keeping this in mind, Lululemon brings in apparel that will best suit sporting activities performed inside or outside during those seasons. In cases of overstocked inventory, the company will mark down certain items and offer discounts to excite customers to shop more and then further boost revenues.
Flow Chart
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