In 1912, when 90 of the first 100 boots Leon Leonwood Bean shipped were returned, he refunded his customers and fixed the products. Over 100 years later, L.L. Bean’s commitment to customer service is challenged by strains on its supply chain. Specifically, today’s “me-commerce” era reflects growing consumer expectations: consumers want the products they like, when they want them, and where they want them, with no tolerance for delays.
During the 2014 holiday shopping season, L.L. Bean crumpled under the weight of consumer demands when it sold out of its popularized winter boots. The company immediately increased labor shifts and ramped production, but holistic changes were needed. Indeed, many companies have failed and shut down because of poor supply chain management practices.
They See What We See – Creating Supply Chain Visibility
L.L. Bean’s management is addressing these challenges by optimizing its supply chain. Kirsten Piacentini, VP of Inventory Management at L.L. Bean, explains the implementation of new forecasting and fulfillment tools. With these tools, L.L. Bean creates a rolling 18-month forecast that generates a net need for vendors. When this data is shared with vendors, the vendors can more efficiently reserve production capacity and purchase raw materials. Importantly, vendors can respond in real time to backorders by reprioritizing work. In its pilot with select vendors, L.L. Bean has seen quantifiable improvements. One vendor in Peru was able to reduce the lead time it needs to process a P.O. by 4 weeks. This allows L.L. Bean more time to get a sense of the market before committing to styles.
Enhanced forecasting capabilities also allow L.L. Bean to invest in the right products for the upcoming season. Rachael Kennedy, Process Lead at L.L. Bean, explains how new tools have optimized inventory levels. This capability reduces lost sales and unnecessary inventory builds, improving the company’s cash conversion cycle.
Encouraged by these early signs of success, management is developing a longer-term roadmap to further enhance its capabilities. In the medium-term, the company plans to implement assortment planning tools, which helps maximize revenue by putting the right products in the right channels. Over the longer-term, the company plans to add tools for promotions and mark-down planning.
Building the Supply Chain of Tomorrow
L.L. Bean’s management has rightly focused on visibility and integration, which is consistent with other managers’ priorities according to the 2016 SCDigest Supply Chain Digitization Benchmark survey.
Source: Digital Supply Chain for Dummies eBook 
Moving forward, management should create performance measurement systems to evaluate the efficacy of the new supply chain tools. Specifically, management should include measurements of resources, output, and flexibility (how well the system reacts to uncertainty) in its assessment of success.
A bolder recommendation is to rethink digitalization of the product itself. Other apparel companies are already adding technology to clothing. Nadi X yoga pants have embedded technology that guides users through yoga flows. Jacquard by Google has collaborated with Levi to create a smart jacket: a tap on the sleeve will play music or send an incoming call to voicemail. L.L. Bean should consider incorporating similar technology into its products: technology to capture miles or elevation hiked, or technology suggesting when an apparel item needs replacement. This type of technology creates new revenue opportunities through after-sale services.
While successful thus far, management faces difficult decisions. To remain relevant in the next 100 years, will L.L. Bean be able to provide consumers a sufficient fulfillment experience, or must it partner with a third-party firm? If the company were to incorporate technology into its products, what brand messaging should it adopt to elegantly infuse technology with traditional, durable products?
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 JDA Software, “L.L. Bean – JDA Real Results,” YouTube, published July 26, 2016, https://www.youtube.com/watch?v=bUWmVRyQRZU, accessed November 2017.
 Digital Supply Chain for Dummies eBook, https://jda.com/knowledge-center/collateral/digital-supply-chain-for-dummies, accessed November 2017.
 Benita M. Beamon, “Measuring supply chain performance”, International Journal of Operations & Production Management, vol. 19 issue: 3, p. 275-292, (1999) https://doi.org/10.1108/01443579910249714, accessed November 2017.
 Michael E. Porter and James E. Heppelmann, “How Smart, Connected Products Are Transforming Competition,” Harvard Business Review, (November 2014).