Question

Luxury athletics and yoga apparel retailer Lululemon Athletica has had great success in its less than 20 years of operation. With more than 200 retail locations, the company netted a 51.4 percent growth in revenue from fiscal year 2010 to 2011 and projected a more than 10 percent growth in the first quarter of fiscal year 2012. While the company has made its name on high quality, high-cost apparel for fitness enthusiasts—a pair of yoga pants can cost as much as $100—a recent manufacturing error shook consumer confidence and gave rise to quality control problems in the company's supply chain. In March 2013, Lululemon was forced to recall its signature "Luon" yoga pants after finding they were so sheer that they were practically see-through. The recall of the nylon and Lycra-blend Luon pants followed a similar event in 2012, when several of the company's swimsuits and light-colored pants were found to be too sheer. According to RBC Capital Markets analyst Howard Tubin, Lululemon’s fabric errors may simply represent a growing pain for the rapidly expanding company. “They tried to get in front of this by not letting the merchandise stay on store shelves and they’re working with vendors to try to figure out how this happened,” said Tubin. “They're probably handling it the best way they can.” Citing Lululemon’s fourth manufacturing snafu in one year, Credit Suisse analyst Christian Buss strikes a slightly less forgiving tone: “Their supply chain hasn't kept up with the demand that they have for their product, and their quality control processes have been proven inadequate.” "Lululemon Athletica Inc. Announces Fourth Quarter and Full Year Fiscal 2011 Results," Lululemon, March 22, 2012, www.lululemon.com/media/index.php?id=219 (Accessed March 27, 2013); "Lululemon: Yoga Demonstration Not Required for Returns," CBS, March 27, 2013, www.cbsnews.com/8301-201_162-57576590/lululemon-yoga-demonstration-not-required-for-returns (Accessed March 27, 2013); Wendy Kaufman, "Lululemon's Too-sheer Yoga Pants Reveal Problems in Company's Supply Chain," NPR, March 20, 2013, www.npr.org/2013/03/20/174867737/lululemons-too-sheer-yoga-pants-reveal-problems-in-companys-supply-chain (Accessed March 27, 2013).

Suppose that, in the wake of Luon yoga pant recall, Lululemon instituted a policy requiring its manufacturing plants and materials suppliers to streamline work processes and thereby provide smooth, high-quality customer experiences. Which of the five types of external integration would such a policy represent?

A. Material and service supplier integration.

B. Relationship integration.

C. Customer integration.

D. Measurement integration.

E. Technology and planning integration.

Answer 1

Ans: A, Material & service supplier integration.

By definition M & S supplier integration means that firms need to associate with external service providers to enhance quality to customer and Lululemon instituted the same policy to streamline their workflow with their suppliers & manufacturers.

Below diagram will give you an overview of other integration models used in supply chain management.