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Scentsy, a direct seliing company, is a distributor of Wickiess candles, decorative warmers, diffusers, cleaning products, and other scented items. Direct seling is the marketing of products to end consumers through person-to person sates presentations at nonretail locations such as consumer homes, parties, events, the workplace, or online. Founded in 2004 by Heldi and Orville Thompson, Scentsy got its start in a 40 -foot shipping container on a sheep farm in Meridian, Idaho. The comparry, which now has a 73-acre campus and a 770,000 -square-foot (and growing) he adquarters, has evolved into an international business, Scentsy products are sold through the company's more than 250,000 independent contractors in more than 14 countries with distribution centers in the United States, Australia, Mexico, the Netherlands, and the United Kingdom. When the COVID 19 pandemic struck the United States in 2020 , Scentsy had to act fast. Stay at-home orders were issued throughout the country. and the business was engulfed in uncertainty. The executive team considered the pandemic's implications for its independent contractors and its 1,000 employees if the company was unable to operate. From the beginning. Scentsy was ciassified by local and state government as an essential business in the states where it distributes products. When its Lexington. Kentucky, warehouse operations were shut down by local authorities. Scentsy's fegal team worked with state ofticials to demonstrate that the company met their definition of an essential business. Extensive safety measures were put in place for the company's essential workers who could not do their jobs from home. 0.6 .. warehouse, distribution, and manufactuing) to protect employees from potential virus spread that would threaten Scentsy's ability to operate. Scentsy's inventory management philosophy is grounded by the fact that the cost of having too littie inventory to support the potential growih of its independent consultants is much greater than the cost of having excess inventory. This policy set Scentsy up for success for the pandernic. When Inventory for a catalog season is heavily front-loaded, it enables Scentsy to meet massive, near-term spikes in demand. To meet the needs of consultants and consumers, each department analyzed its workforce and re-deployed employees to operations based on wilingness, ability, and previous experience to cnhance the company's abulity to produce products and fulfill orders. A process was put in place for high-level management and other white-coliar workers to volunteer after-hours and on weckends to support manufacturing and shipping operations until the company could hire and train more than 800 new employees, effectively doubling its operations and consultant support teams. The Thompsons made the critical early decision to lean into growth and imvest heavily in additionat inventory (raw materials and finished goods) and employees to be able to service growth while operating under challenging conditions such as social distancing. extra cleaning cycies, and personal protective equipment (PPE) needs. They implemented hazard poy for essential workers, which led to a significant philosophical shift and the implementation of living wage standards. A new bonus plan was also rolied out for every Scentsy employee. The company's abality to quickly implement safefy and social distancing measure5, adjust processes, and add PPE allowed Scentsy not only to meet health and safety requirements from the government but also to prevent an outbreak that could have drestically reduced output of even forced a shutdown. Overseas factory shutdowns created concem around sustainable growth. Supply chain managers worked with suppliers to facilitate large Page 266 . purchase orders. The company also engoged in supply chain mapping. Identifying and selecting alternative owerseas and domestic suppliers. The company even swapped out pockaging as necessary due to availability issues: Scentsy offered some products that were missing a nozzie at a discounted price due to the limlted supply of cieaning pockaging so that the company could continue to provide products for consultants to sell. Scentsy's diversifled product portfolio proved to be akey strength. The compony's ability to supply cleaning items while stock outs happened ln the retail spoce validated the company's decision to move production in-house. Being more vertically integrated over time has allowed Scentsy to become less reliant on others in the supply chain. making the company more nimble and flexibie. The company ramped up business with an aiternative small package carrier (FedEx) and negotlated with a primary small package camier (UPS) to enable last-mile shipment of packages to customers and consultants despite the imposition of caps on package counts during the busy hollday season Scentsy's It team moved quickly to enable the rest of the company's employees to work from nome-including the acquisition of special workstations for consultant support employees to take incoming cals from home. The Thempsons decided to step up communication frequency to its Independent sales field via Facebook Live and Zoom videoconferencing events. They were transparent with fieid ieaders about Scentsy's efforts to remain operational and its plan to retain all corporate employees by moving to a work-from-home format, as well as regarding the uncertainty the company taced. Sales leaders banded together to ensure the home office could avoid layoffs by establishing sales challenges to motivate consultants, such as "Active in Apeli, "Slay in May." and "Joy in June. "These sales challenges worked, resuiting in dramatic growth. Total worldwide revenue for the company in 2020 was $896 mision, up 91 percent yeor over year with substantial growth in all regions. consultants, such as "Active in April," "Slay in May," and "Joy in June," These sales challenges worked, fesuiting in dramatic growth. Total worldwide revenue for the company in 2020 was $896 mallion, up 91 percent year over year with substantial growth in all reglons. Scentsy's independent salesforce thrives on social events. Howevet, due to the pandemic, the company canceled its in-person events for the year. including the Scentsy World Tour, a traveling event with onsite training and a sneak peek of new products. This was merely a bump in the road. Scentsy successfully shifted from in.person to virtual events (e.g. Director Boot Camp, Leadership, Scentsy Family Reunion) Quarantine. working from home, and the avallability of stmulus funds created a perfect storm that led to the massive demand for Scentsy home fragrance and cleaning products. Scentsy's products and culture attract people seeking alternate sources of income, especially during uncertain times. The total number of independent consuitants increased more than too percent year over yeat. Scentsy worked to ensure its consultants could service the majority of their customers while they waited for other products to come back into stock. The company also successfully worked with the field to make the shift away from the company's long held policy of keeping catalog products available on backorder throughout the catalog season. Leadership ramped up communication and transparency with the field regarding product avazability as manufacturing issues and shipping delays hit hard amid continued hyper-growth. One critical move was creating a new role dedicated to understanding and communicating product avallability to the field daily to help with uncertainty and maintain confidence in the field. Scentsy stands out because it successfully meets the needs or key stakeholder groups. The company has been recognized by the Direct Selling Association for its customer-centric sales and marketing. Adaitionally, Scentsy's efforts to bolster its supply chain amid a global pandemic and its ability to effectively communicate with its consultants were a recipe for success. The pandemic, which could have spelied disaster for the company. led to one or Scentsy's strongest years yet 40 Critical Thinking Questions 1. Describe Scentsy's inventory management philosophy. 2. What temporary measures did Scentsy put in place to support manufacturing and shipping operations? 3. Why do you think Scentsy sales spiked amid the pandemic