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The context:
Success that threatens profitability. A luxury house is experiencing rapid e-commerce growth of 45%. Paradoxically, this success is weakening its cash position. Physical stores face shortages of bestsellers, while warehouses dedicated to online sales overflow with dormant inventory. Working capital requirements are limiting the brand's investment capacity.
La Boussole's diagnosis:
Costly silos. Our analysis reveals a complete disconnect between Marketing, which launches campaigns, and Supply Chain, which only discovers the volumes once a campaign is under way. Sales forecasts are managed in separate Excel files, with no consolidated view of inventory in transit or in stores.
The solution:
A customer-centred approach. We work to break down these organisational silos:
- Introducing S&OP — Sales and Operations Planning: establish a monthly routine where Sales and Supply Chain agree on a single sales forecast and the associated supply plan.
- Dynamic working capital optimisation: redesign replenishment algorithms to move from a push model based on historical forecasts to a pull model driven by actual demand.
- Tactical outsourcing: support the selection of a specialist e-commerce logistics provider to manage seasonal peaks, such as Black Friday and holiday periods, without increasing fixed costs.
The outcome:
Flow restored. Working capital requirements fell by 18% over one seasonal cycle, releasing €4 million in cash flow. In-store product availability reached 99%, while end-of-season unsold inventory fell by 12%.
