1. What is relationship management?

2. Explain how relationship management can benefit both retailer and supplier?

3. How might the use of a quick response system affect the financial performance of Capital Sportswear?

4. What problems would Wilson have implementing a quick response system with vendors?

CASE 19 Capital Sportswear: Buying "We need to have vendors who can take this burden "I never thought I would have to complain about a off of us," said Ken Joynes, Capital Sportswear in sales increase, but it is obvious that the sales are ventory manager. "We have had a sales increase of well beyond our control. Something has to be done 20 percent over the last two years and my people and that is why we are meeting today." can't keep up with it anymore." Capital Sportswear was founded by George In this hypothetical case, Keith Wilson, general Wilson in 1963 in a major metropolitan area. For manager of Capital Sportswear, reviewed the years, Capital Sportswear has been successful in the colourful chart showing the sales trend and replied, sportswear market. In 2000, George Wilson retired, and his son, Keith Wilson, was appointed general Worrying about not being able to meet demand manager. From the beginning, Keith Wilson has on time, Joynes met with suppliers and asked them been a real go-getter. Recently completing his MBA, to provide more timely delivery schedules to Capital he has wasted no time in locating new markets for Sportswear. When he stated that the company was Capital Sportswear. He immediately contacted ma- not going to tolerate any reasons for future delays, jor universities and colleges and gained four-year two major suppliers expressed their concerns about exclusive contracts for apparel purchases made by his lack of flexibility and requested price conces. the sports teams of their athletic departments. sions. They simply indicated that Joynes's demand Soon after, Capital's sportswear became popu- had to be supported by providing cash or reducing lar among students. This growing demand for the quantity discounts. Joynes ignored these comments company's products motivated Wilson to open two and indicated how serious he really was by stating more retail stores. During the fall of 2013, sales had that Capital Sportswear could always find new increased beyond expectations. Although the suppliers company achieved a successful reputation in the By the end of a long discussion, arguments marketplace, sales growth has generated major were beyond the manageable point and the two problems. large suppliers decided to quit dealing with the In the beginning, operations were fairly smooth company. After the meeting, Joynes received a and the company's inventory control department memo from Wilson, Wilson was very concerned updated most of its procedures. Joynes emphasized about the potential reactions of the rest of the ven- the crucial role of routiniention in the overall inven dors. He stated in his memo that since Capital tory maintenance process to keep up with the in- Sportswear was continuously growing, it was ex- creasing turnover. The sales increase was 20 percent,pected to present a more supportive attitude to its as opposed to the 12 percent that had been fore suppliers. He expressed his belief that the company casted for 2014. It was this increase that initiated a needed a cohesive atmosphere with the rest of the series of problems in the inventory control depart- channel members, especially with its vendors. ment. To temporarily alleviate the backlog, Wilson During the next six months, Joynes had limited authorized Joynes to lease an additional warehouse success in locating one or more large suppliers (see the replenishment level for July 2013 that would be able to deliver the products to