Insights

A newly established furniture company with a centralized warehouse in Melbourne experienced rapid growth during Covid. However, the company struggled with high inventory levels and lacked a systematic process to monitor inventory or place orders. This resulted in bulk ordering whenever stockouts occurred. In addition, long lead times placed further strain on profitability, as extended lead times meant prolonged stockouts.

Our first task was to understand the key drivers of sales in their business and then map out a step‑by‑step process. One of the most critical elements in the furniture industry is the short product lifecycle. On average, the company introduced 40 to 50 new products each year, making it essential to involve the Product Development team early in the S&OP process so that cannibalization effects on existing products could be properly assessed.

In the e‑commerce segment, 35% of their sales came from marketplace channels, with one marketplace customer contributing nearly 70% of that revenue. We developed a process to bring the account manager into the planning cycle and incorporated the key marketplace customer’s forecast as a major input influencing overall demand planning.

Without a brick‑and‑mortar presence, their primary marketing drivers were online promotions managed by the performance marketing team. We helped them build annual promotional calendars based on major Australian events and incorporated the impact of advertising efforts across all relevant channels.

The unconstrained forecast was rolled out on a 12‑month basis and shared with key stakeholders, particularly finance, who then used it to develop the Annual Operating Plan.