It seemed like a normal Monday morning in the Vendor
Development Department at
Kmart’s headquarters in Troy,
Michigan. All systems had apparently run properly over the
weekend and the merchandising staff was in their normal
Monday morning routine of evaluating sales.  

Early in the afternoon I began getting a series of unusual
phone calls. One of the services Vendor Development
provided to Kmart’s suppliers was that of a sounding board.
Vendors were able to come to us with questions they were
afraid to ask their buyers (for fear of reprisal or
embarrassment) and we would get answers for them.

The first call came from Advanced Watch, a jewelry supplier
claiming their orders that week were larger than the entire
past year. They wanted to make sure the orders were
correct as they would need to run overtime in their shipping
facilities to fill them. I took down some figures from them so I
could investigate.

A few minutes later a call came from Corning Ware with a
similar, but larger, claim. According to their customer
service department the Kmart orders were a two to three
year supply. They had called the person placing the order
and been told the orders were correct because of a policy
change. Corning Ware said to fill the orders they would have
to take all the reserve they had for Target and Wal-Mart and
ship it to us. They were afraid we would find our mistake and
expect them to take back the shipments, paying freight
charges in both directions.

An unfortunate command
I found out an order had been given by then company
president Andy Giancamelli. Wall Street had been criticizing
Kmart for having an appearance that stores were out of
stock. A research study found that customers had a
negative impression because some shelves and peg hooks
only had 1 item which could easily be seen as a false front
to an empty shelf.

Andy had told his next in commands to make sure there
were two items in every position so the shelves did not look
empty.

Click here to see how this was implemented.
Andy G.
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