THE RETAILER'S PROBLEM

Introduction: Encore Super Markets is one of the fastest-growing retail chains in its region. It has six locations in the area, and every location carries multiple categories for consumer product goods: convenience goods, shopping goods, specialty goods, and more. The retailer's growth has been unprecedented, but a few months ago, they encountered a problem.

Their Current Situation: They've been consistently running out of laundry detergent in every single one of their regional stores. They don't know what's causing it, but they do understand their failure cost:

Customers are getting upset because their local Encore Super Market is consistently out of laundry detergent

Laundry detergent manufacturers are getting frustrated. They're willing to provide Encore with as much product as necessary, so there's really no excuse to not have the product in stock

Their Required Situation: Ideally, they'd have exactly the right amount of laundry detergent in stock. They don't want to run out, but they don't want a huge surplus either.

Your Role: Encore Super Market's corporate office has hired you to solve this problem. Using the data provided on the Foundation tab, explain three things:

Why are they running out of laundry detergent?

How can they fix this problem and prevent it from happening in the future?

How can Encore turn their customer dissatisfaction into customer delight?

Your Goal: Investigate Encore's problem situation, develop probable causes, and verify those causes.

Your Resources: Below, you'll find internal data and external data related to the problem. This data will help you solve this problem.

Internal data is information you can gather from within Encore's business

External data is information you can gather from outside Encore's business?for example, data from Encore's competitors, industry news, market trends, etc. Don't ignore any data source, but make sure all the data you collect is directly related to the problem you're trying to solve. A lot of data can seem very interesting, and it'll sidetrack you into doing a lot of research that isn't relevant to the problem. You can avoid this problem by using the Is/Is-Not Analysis tool.

Your Tools: As you analyze the problem, don't forget about your investigative tools:

The 5P Framework

Is/Is-Not Analysis

Cause-Effect/Fishbone Diagram

The Human Performance Formula

Question 1: Is this problem familiar or unfamiliar? What are some of the costs of failure for external customers, employees, and the organization?

Question 2: Investigate the Internal and External Data that is available to you (or is provided in this case study). Using the 5P Framework and Is/Is-Not Analysis, list out all the People, Process, Position, Period, and Progression data that IS CONTRIBUTING to the problem.

Question 3: Investigate the Internal and External Data that is available to you (or is provided in this case study). Using the 5P Framework and Is/Is-Not Analysis, list out all People, Process, Position, Period, and Progression data that IS NOT CONTRIBUTING to the problem.

Question 4: Craft a concise problem statement (three sentences or fewer). Include the organization's current problem situation, the required situation, and some of the variables the organization can use to track the severity of the problem (e.g., sales volume, number of defects, etc.). Be absolutely precise with your words. If your problem statement is vague, it may lead to the wrong solution.

Question 5: What's causing the problem? Use a fishbone diagram to create several different cause categories (e.g., equipment, people, materials, etc.). List at least two of those categories below. If any of the cause categories are related to people, can you attribute the problem to Skill, Will, or Hill factors?

Question 6: Analyze your cause categories. Which of them is most valid, and why? Explain below, along with the Internal and/or External Data that proves its validity.

Question 7: In the previous question, you validated a cause category. Now brainstorm possible solutions to this cause (ask others for their ideas, if possible). List three potential solutions that might address the root cause of the problem.

Question 8: Use a reverse fishbone diagram to create list of action steps required for each of your solutions. Then, in the space below, describe which of your solutions would be the most efficient (fewest steps/lowest cost) and effective (maximum motivation of the people involved). List the steps required to implement it.

Question 9: Conduct a force field analysis on your solution. Based on the information you've gathered about the company and the industry, list out both (1) the driving forces and (2) the restraining forces that might influence the implementation of your solution.

(Note: you might feel like you don't have enough information about the company's policies/history/finances/etc. That's okay. Go ahead and make your suggestions anyway.)

Question 10: So far, in previous questions, you've pinpointed an efficient and effective solution. Now, create action plan to implement that solution (in the real world, you'd normally include everything you must, should, and could have; but for the purposes of this template, list only the must-have requirements for your solution). Describe: (1) action items, (2) who's responsible for each action item, (3) the allotted time to complete each action item, (4) any support that might be required, and (5) measurable controls to monitor the progress of your implementation.

(Note: you might feel like you don't have enough information about the company's policies/history/finances/etc. That's okay. Go ahead and make your suggestions anyway.)

Question 11: If your proposed solution solves the problem, list three ways you would share and build upon the organization's success. Conversely, if your proposed solution fails, list three ways that you and your team might learn from the experience, so that you succeed next time.

The Retailer's Problem External Data Category Description Competitors {other retailers in the area] EcoClean's Website [detergent manufacturer] You explore the stores of several competitors in the area, and you notice two important details: {1} these competitors devote significantly more shelf space to laundry detergent, and [2} they had plentyr of detergent in stock during your visits. ***Scare deais an Eco-Clean, yourfovorite detergent brand! Up to EEO-percent of iiistore purchase at quaii'ing iocatr'ansi'\" According to their website, EcoClean [the region's leading laundry detergent manufacturer} is running a major seasonal sale. You can't find any evidence that they ran the same sale last year. Must be a new marketing initiative. Industry News Tech Blog Argosy Spring's Website [detergent manufacturer] About four months ago, Parasol UitraFresh [one of the leading laundry detergent manufacturers] triggered a product recall. Their detergent formula was causing a rash. However, you're not sure if this is relevant. Encore Super Markets hasn't carried this brand of detergent in aimost five years. Over the past year, liquid detergent sales have slightly decrease-din this region. Why? According to a popular technology biogger, stateoftheart washing machine technology has increased the popularity of laundry pods. ***Buy 150+ ounces ofArgosy Spring and get haifo'ony of the leading fabric softeners!!\"* A month ago, Argosy Spring {another leading detergent brand} kicked ofFa crosspromotional strategy with the leading fabric softeners. The deal is valid through the end of the upcoming month. The Retailer's Problem Internal Data Category Description Online Customer Complaints Joshua [Regional Managerl Encore's Website * i it it 1% \"They're always out ofiound'ry detergent! if they don 'tfix their operation, i'm gonna start shopping elsewhere. " Nicholas C. Overall, the region's top store has favorable online reviews {4.3 out of 5.0 stars}. But over the last six months. onethird of the reviews are 1 or 2 stars, and many ofthern complain about the store's lack of laundry detergent. "ifyou ask me, this is lGina's fault. She took over when Larry retired, about eight months back. And man. she's definitely not Larry. His traclc record was flawless. He knew more about ordering than anybody I've ever worked with. He built our ordering processes himself, you know. From scratch." In the last 12 months, Encore Super Markets opened two new stores and hired more than 85 people in the region. According to the website, they plan on opening two more stores before the end of the scal year. Gina lDrdering Manager] Income Statements "l've heard the complaints. I get it. We're constantly running out of laundry detergent, but don't look at me. I'm ordering exactly the same amount of stock as Larry did last year." According to these income statements, Encore Super Markets entered into online sales about nine months ago. However. the online marketplace makes up only 6 percent ofoverall sales {and the products that are sold online get fulfilled directly from distribution centers]