When a crisis of coordination demands a digital solution
A specialty sporting goods manufacturer had a problem: the right hand didn’t know what the left hand was doing. The company’s production department was almost entirely disconnected from its sales function, meaning that the manufacturer was producing goods with virtually no knowledge of whether its customers—sporting goods stores and mass-market retailers—actually wanted them. As a result, orders were seriously delayed, sales were slumping, customers were dissatisfied, and unsold inventory was mounting fast. Some customers grew so frustrated that they stopped doing business with the manufacturer. The company’s owner, a private equity firm with a large portfolio of specialty sporting goods brands, engaged AlixPartners. Our tasks were to get production in sync with sales, clear away the inventory glut, and win back alienated customers.
A new digital platform matches supply with demand
Job one for our team was to develop a temporary, digital solution to settle the immediate crisis. The solution essentially pulled real-time sales orders, linked the sales to proper equipment, and created production scheduling and required procurement functions, enabling the company to swiftly align demand with supply. For the first time, the company could view its entire business pipeline, from production to final sale. This initial fix served as the blueprint for the permanent solution we developed once the crisis had passed. At the same time, we developed a strategy for quickly unloading the massive inventory of unsold goods.
When it really matters
The client had stressed the need for speed in designing and executing a solution to the disconnect between production and sales—and speed is what we delivered. In just three months, the new production system was in place and working as advertised. The company cleared $10 million in unsold inventory within two months. The systems we implemented generated tens of millions of dollars in earnings improvement, and customers that had drifted away returned to the fold.