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.
I went to Andy’s office to verify this was his order.
Fortunately he was in and saw me right away.
“Several vendors have called today concerned with the size of the orders they received in our weekend transmission,” I told him.
“We’re trying to increase the in-stock appearance of the stores by building inventories,” he replied.
“Well one company told me their order was ten times the norm, another said we were ordering a two to three year supply,” I informed him.
“Who,” he demanded.
I told him it was Corning and that I had verified their numbers were correct.
“Wait a minute,” he interrupted. “Are we talking about the gift sets?”
“Among other items, yes we are.”
“Can’t anyone think for themselves?” he yelled in a totally frustrated voice. “I don’t need a bunch of robots.”
There was a short pause while Andy was cooling down.
After what seemed like a few hours, (okay, it may have been five seconds at the most, but it seemed like hours) Andy continued.
“They were supposed to increase facings to two so the shelves looked fuller. With the gift sets you can’t see behind the first one anyway. I told them to increase facings, but I thought they would do it more analytically,” he lamented.
This is an excerpt from my book “Life’s Leadership Lessons” a collection of 53 anecdotal leadership lessons, each with an anecdote and the application of the topic in your everyday life. It is designed for use in weekly staff meetings or for personal development.