Final Report on Jo-Ann Fabric and Craft Stores (Research Paper Sample)

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Final Report on Jo-Ann Fabric and Craft Stores
Executive Summary
Reading the reviews from shoppers across the nation, there are a lot of disgruntled clients pulling out of the Jo-Ann Stores’ loyalty circle. The complaints raised relate to the online ordering and delivery processes and customer service by managers across the nationwide stores. The objective of this report is to highlight the issues that could lead to a decline in company revenues and market share, and to provide the relevant recommendations to help improve the process and operations.
General Statement of Understanding
The processes under review and assessment are the online ordering and delivery procedure and consumer relations, which in the past has raised serious concerns from discontented customers. It is true that some of the mishaps that occur when delivering items are unavoidable; however, when the operation’s managers take the relevant precautions, many of the issues raised by those who are loyal to Jo-Ann can be resolved. Some of the issues raised include false advertising, late delivery, delay in customer service, faulty products, and complaints related to a stingy return and refund policy on faulty goods.
Another concern is the lengthy lead time between ordering for products from the corporate warehouse to the retail stores, which means that most customer orders get delayed. Surely, something can be done to improve the current way of doing things. In-house incompetence is also worth noting as most of the employees lack the proper skills, knowledge, and ability to provide effective and satisfactory customer service.
Background Information
Jo-Ann Stores, Inc. (JAS) is the leading retail chain of crafts and fabrics; its headquarters are in Hudson-Ohio, United States. The foundations of the company were laid down in 1943 when German World War II immigrants, Sigmund and Mathilda Rohrbach, and their friends, Hilda and Berthold Reich, opened a cheese store in Cleveland called the Cleveland Fabrics Shop. The store also stocked fabrics, a product which did so well that they had to do away with the cheese as time passed. In 1969, the store’s name changed to Jo-Ann Fabrics, and in the same year became a public company under the name Fabri-Centers of America (FCA). In 1998, the company rebranded itself to Jo-Ann Stores, Inc, an entity that is now a nation leader. The franchise made various acquisitions along the way, which aided in its growth (Chokshi par. 1). The company is currently owned by Leonard Green & Partners, an acquisitive private equity firm (Carter and Cane par. 1).
JAS operates in over 700 locations across 49 states, serving their clientele in issues knitting, crochet, sewing, quilting, jewelry-making, food-crafting, painting, floral design, scrap booking, and framing. JAS owns traditional and superstores, with the traditional stores being more inclined to selling fabric, while the superstores are more skewed towards selling crafts. The arts and craft industry is worth billions. In the early millennium, the growth rate was high but has been fluctuating over the years. In 2005, Craft and Hobby Association held that the industry was worth $31 billion, which shows that as of 2011 there had been a drop to $29 billion (Chokshi par. 2). The challenges facing the U.S Craft and Hobby Industry, and a lack of new trends may be the cause of the drop in sales. Considering the stiff competition that the close competitors [Michael Stores (MIK), A.C Moore Arts & Crafts (ACMR), Hancock Fabrics (HKF), Hobby Lobby] give Jo-Ann Stores, it is important for the company to improve on its service delivery and its operation’s management. Many employees lack proper training and an understanding the system, which results in poor customer service as evident in the company’s ‘pissedcustomer.com’ website (Chokshi par. 2).
Engagement Activities
The analysis took an in-depth scrutiny of the processes of customer service and the process of order delivery. The activities included personal observations of fellow employees at the local Jo-Ann stores, giving questionnaires and conducting qualitative interviews on 50 respondents that work and shop at the retail store, reviewing personal accounts of clients online, and reviewing the financial position of the organization over the past few years. The data collected were compared to the general industry performance as well as that of the competitors to determine the market position of Jo-Ann Stores, Inc. The observation period took several weeks, but the documented data were gathered within five working days.
The first hand study entailed identifying the various loopholes in the servicing of orders by making several personal orders through a third party. It also entailed observing the personnel at the local store during the shifts and afterwards, a period that facilitated interviewing and questionnaire fill-ups. During the research period, further information was sought online to determine the number of complaints raised vis-a-vis the number of positive reviews. It is clear that people had mixed feelings especially in relation to coupons in individual areas. The internet findings were jotted down in terms of relevance and similarity of issues raised concerning the company. The performance of the company in relation to the competitors is useful when it comes to providing recommendations and final remarks.
Findings an Observations
Out of the 45 clients interviewed, 60% reported having experienced trouble with the website and with one of the workers in the store. 66.67% reported experiencing issues with getting assistance from the employed staff, while 31 respondents reported being displeased with the delays in receiving their orders. For a company that was founded about seven decades ago, which operates in more than 49 states, having 5,363 full time employees out of a total 23,000 can be considered understaffing (Forbes ‘Jo-Ann Stores’ par. 2). Most of them are part-time workers, an issue that may be the contributing factor to the poor service delivery by majority of the laborers. After conducting a personalized interview with five of the part-time workers, the main concerns were that some of the managers-in-charge were too bossy and domineering.
Job security acts as a motivating factor to workforce performance and morale. Therefore, giving the team a sense of job security is important if the efficiency of the organization is to improve. Delving into the comments of customers on joann-fabric.pissedconsumer.com, it is clear that most of the concerns relate to faulty products and poor service from the store personnel who should be assisting these customers by sorting out their problems. The enterprise’s website appears to be trailing in terms of inventory. Some customers had countless orders cancelled and the excuse given was that the particular goods were out of stock, yet the product appeared to be in stock online (Pissed Customer par 4). The lack of coherence between the retail stores and their online page could be detrimental to the loyalty of most customers who appear to be unimpressed by the company’s lack of professionalism.
It takes an average of seven days for people to receive their custom goods. The delay is due to a poor supply chain management since most of the material must come from the main hub of distribution, which is inconveniencing in times of rush orders. Jo-Ann hires private vehicles to transport their products to the different stores, which explains the delay. The coupons offered by the stores and the organization as a whole usually raise controversies in many cases. Customers come in with coupons they saw online only to be told that the goods are on sale and not on offer. Many have walked out irate because of this confusion (Pissed Customer par 2).
The information technology and quality of service is lacking in many of these stores. One of Jo-Ann’s closest competitors is Hancock Fabrics - an enterprise that owns more than 250 stores across 35 states. A closer look at the 2014 financial statements of Hancock Fabrics shows that the gross profit at $118.755 million from a total revenue of $276.03 million this financial year (Hoovers par. 1). According to Forbes, Michael Stores posted $4.41 billion in sales compared to Jo-Ann’s $2.3 billion (par. 2). Michael Stores operates more than 1000 stores across the U.S and Canada. It is clear that the competitors are attracting more clientele. Therefore, it is important to ensure that the customer base within which Jo-Ann conducts business is maintained and that marketing efforts be deployed to capture new potential.
The Graph below displays the market share analysis of the major players in the Fabrics and Crafts Industry by IBISWorld (TribLIVE par. 6-7):
 EMBED MSGraph.Chart.8 \s 

The illustration clearly shows how fast Michael Stores has risen in the past few years to beat Jo-Ann Stores in revenue last year.
Recommendations
One of the most important changes that needs to be implemented is the adoption of a Material Requirements Planning System (MRP) that schedules and manages the supply chain processes by ensuring that the goods are received on time, and in proper condition. It is advisable that Jo-Ann Stores adopt a lean manufacturing system to cater for wastage, excessive inventory, and excessive demand. The lean system can only be effected if the organization comes up with an efficient demand management sector that works closely with the information systems department to take orders in time, communicate with the distribution hub and satisfy the demand without hitches (Longo 25-30).
The company should also implement the DMAIC (Define, Measure, Analyze, Improve and Control) project of Six Sigma, which covers the aspects of p...