CASE STUDIES

King Baby

The Problem

The client is a luxury jewelry & accessories brand. The business had a great margin but was suffering from cash flow constraints operationally. Production & Fulfillment inefficiencies, along with a ballooning inventory were draining the company’s cash. The client described their problem/pain point as order fulfillment. They were filling orders late and getting worse. Our deep dive revealed the root cause of their issues was improper inventory control leading to overstaffing, improper production scheduling, and late fulfillment all of which had a major negative impact on bottom line.

The Process

Phase 1

Inventory Control

Cycle Count Process implemented
Operational controls in place to support on hand inventory accuracy
Safe Levels and production schedule set for core products and components

Phase 2

Standardized Workflow

Weekly purchasing practice streamlined working with ERP provider
Purchasing and Receiving SOPs in place
Weekly Production scheduling systematized
SOP in place for Daily order fulfillment practice

Phase 3

Profit Focused Leadership

Revenue & Expense plan set
True Cash Breakeven & Profit points outlined

Phase 4

Performance to Plan Management

Key metric dashboards built and shared with key staff
Custom tool in place for tracking weekly demand vs. capacity for production team
Structured weekly check points and monthly financial meeting

The Deep Dive

Our Deep dive revealed several large opportunities including establishing ﬁnancial plans, correcting inventory & purchasing process, and implementing a weekly P2P check in with established performance and ﬁnancial metrics.

The Work

Financial plans set
Retail/Service pricing validated
Understanding of Breakeven/Proﬁt Points
Staff Compensation structure aligned with Breakeven Point
Inventory Control Process established and Weekly Purchasing systemetized
Key Retail Metrics established for tracking

The Results

Retail % increased from 9% to 16%.
Inventory process implemented
Reorder levels set for all inventory products and weekly purchasing practice established
Retail Pricing analyzed and corrected to cover expenses and ensure proper margin contribution from each sale. ($9k additional gross proﬁt through year one)

Ongoing Support From Nercher

Financial Planning and Goal Setting
Weekly expense Review
Decision support and Financial validation
Pop up Inventory Audits
Monthly Financial Meeting
Bookkeeping Services
Nercher Quick View Dashboard

Key Results

>99%

Inventory Accuracy

40%

Reduction in Direct Labor Spend

+$38K

Monthly Gross Profits