Due Thursday November 14th at 12:00 PM PST

For Case 73 you can address the "major question": what would you advise this company to do in this situation?  Come up with two possible ways to go.  Also consider what the company can do moving forward to make sure they are really getting organic fabric.

PLEASE do some research to support your solutions!


Major Question

If you were a business consultant to Lewis & Lee, what would you advise it to do about this situation?

Case 73 THE FLANNEL ORGANIC FIBER FIASCO

Connie Ulasewicz, San Francisco State University

Lewis & Lee is a contemporary domestic clothing manufacturer of a line of whimsical layette items and accessories for the infant to 4T set. The line includes hats, booties, blankets, and bibs offered in bright novelty stripes, prints, and solids. The Lewis & Lee layette collection is marketed as a 100 percent organic cotton, gift-packaged, flannel program. The layette items are continually available for stores to reorder 12 months of the year. Lewis & Lee products are available in a variety of department stores including Macy's and Saks, independent specialty stores, hospital gift shops, and through its Web site. The manufacturer is successful because it delivers a high-quality, domestically manufactured, well-priced, organic fiber product.

One of the fabrics with wide customer acceptance in the layette line is a 100 percent organic cotton flannel. Moms seem to love the softness next to their babies’ skin and are willing to pay a higher price for an organic cotton receiving blanket, cap, and booties from Lewis & Lee versus a nonorganic or blended flannel from their competition. Based on the success of their flannels, the company offered a second product line this past year: corduroy hats and booties lined in flannel. The products are quite sturdy and still have the softness of organic flannel next to the infant's head and toes.

Finding a consistent quality of 100 percent organic cotton flannel available year-round in solids, prints, and matching yarn dyes at an affordable price is a real challenge. The responsibility of the Lewis & Lee fabric merchandiser, Kayla Woolsey, is to swatch, sample, and test fabrics from many different resources. The fabric tests performed are for shrinkage and colorfastness. Both finished garments and fabric squares are tested. When Kayla approves a quality, an order is placed. Most of the solids and basic prints are ordered three to five months in advance through a fabric distributor in Oregon. The lead times are long because the flannels are manufactured in China. This requires long-range planning, but it has been worth it for the ability to reorder the same color and prints throughout the year and the great price received when purchasing in large quantities.

One day while taking the fabric inventory of a recent shipment, Kayla discovered a fiber content label reading 60 percent organic cotton/40 percent polyester stuck inside one of the rolls of fabric. The fabric and color number on the tag was the same as the flannel she had been ordering for four seasons. After looking inside several more tubes, she discovered three more of these 60/40 content labels. She was shocked. Was there an error? She had order confirmations for 100 percent organic cotton flannel. Had she been sold 60 percent organic cotton/40 percent polyester goods all along with the assumption she would not know it was not 100 percent organic cotton? She immediately telephoned her fabric manufacturer in Portland to find out what was going on.

After a sleepless week of investigation, the situation became more complicated. Indeed, Lewis & Lee had been shipped from Oregon some 60/40 flannel on this and past orders. The fabric supplier had contracted for 100 percent organic cotton flannel from China and was unaware of the switch. Unfortunately, all current available solid red flannel would need to be the 60/40 blend. At this time, another concern was raised regarding the cotton: was it really organic? As there are no standards for labeling or international standards for methods of growing organic cotton, the owners of Lewis and Lee began to question if the cotton in their fabric was organic. They no longer trusted their fabric distributor and questioned the company's integrity.

The owners of Lewis & Lee were outraged. Their company's image was based on delivering an organic fiber product, not a blend like their competition. Also, all the garment labels sewn in the products and in the warehouse clearly stated 100 percent organic cotton. The owners knew that legally all textile products must be correctly labeled with the percentage of each fiber present listed in order of greatest percentage. With the new knowledge of the actual fiber content, all garments containing red and blue flannel in production and in stores were incorrectly labeled.