GMS Case 3

I am a part of the management team of a rapidly growing, privately-held apparel company. Over the last year, we have generated $80 million in sales and for the next year, we have projected sales of $150 million. Our operations are entirely based in the U.S., which is a strange occurrence due to the fact that most apparel companies outsource almost all of their manufacturing to foreign countries because the manual labour is much cheaper and more affordable. The rapid growth in our company is largely due to our niche target market. Overall this niche target contributed towards flexible and rapid operations. Another differentiating factor that separates us from the common apparel company is our employee policies. The company philosophy that we have enforced since our inception has been to treat all our employees with fair labor practices and to be as profitable as we can without exploiting the nature of employee policies. This fundamental rule has earned us a positive reputation in the eyes of media and the good-spirit of corporate responsibility.
This coming summer, we found that our company cannot keep up with the amount of orders coming in. We added in a second shift, amounting to 1,000 new employees, resulting in 3,000 total employees. It is now September and it has become clear that our inventory has grown too large for our company to hold. It was also known that during the winter season, company sales would slow down, subsequently slowing down production. Our productions cannot exceed 4 million dozen between October – March, but with our current staffing, there is too much production going on. With this production dilemma, we have to figure out a way to slow down productions to meet the quota. We are faced with the choice of laying off our workers, which some of our workers have already faced in previous jobs. If we lay off workers, there is no guarantee that we will be able to rehire the same people in the spring. We also cannot afford to lay off the