Celio* makes quantum leap into digital era
Most supply chain executives cry out for simplicity. Laurent Thoumine, VP Supply Chain of men’s fashion group, Celio*, faces an overwhelming web of complexity. By being multinational, multi-sourcing, multi-channel and with multi lifecycle products, every change in the market place is multiplied he says. The evolution towards the digital environment and omni merchandising is reinventing the business. “Everything is moving at an amazing pace. It is really exciting but we have to reinvent the business model almost every day.” In the last two years Celio* has made a “quantum leap” in IT to enable it keep pace. It’s using social media to enhance forecasting and the customer experience and it’s investing in algorithms to bring visibility to the multi-channel sales environment.
By Martijn Lofvers & Helen Armstrong
Founded in France in 1985 by Marc and Laurent Grosman, Celio* produces value for money, ready-to-wear men’s wear. With 1,000 stores, 500 of which are in France including its flagship store on the Champs-Élysées, expansion continues across southern Europe and Asia. The digital era is bringing its own new challenges. Laurent Thoumine took over the job of coordinating the increasingly complex supply chain two years ago. Hot items on his agenda are alternative sourcing, reduction of lead times, e-commerce and supply chain visibility through RFID. Investment in mathematics is solving some of the problems and helping Celio* keep a competitive edge.
What are your responsibilities in the supply chain?
“Planning the merchandising and the assortment. We are sourcing from Asia so we have a big office in Hong Kong, plus offices in Bangladesh, Vietnam, Cambodia, mainland China and we are going back to Mynamar. In total it’s about 140 people. I am also responsible for inbound and outbound logistics across the globe which are run from offices in Mumbai, Hong Kong and two in France. We also have important franchises in northern Africa and the Middle East. I also head a team that calculates the needs of our 1,000 stores from the initial allocation, which depends on capacity and potential per product line, to admission of garments. This includes time and date when goods will be received, the lifespan of the new collection, size of inventory delivered, all taking into account the different rhythms in our assortment. When the stores start to sell we analyse sales and recalculate the needs and dispatch accordingly.”
How is e-commerce changing merchandising?
“In 2011 our shareholders decided to aggressively go online. However, we did not have the skill set internally to successfully become an e-retailer so we had to subcontract the entire operation – logistics, marketing, technology – to a third party. I joined in 2012 and felt this was not a good strategic decision. In my opinion we have to master the complexity of having real stores and the digital on-line interaction, via tablet, mobile etc, with our customers. The company hadn’t invested in IT for ten years so we had to make a quantum leap. Our mission started internally. Firstly our people had to embrace the digital culture. We started by developing many small Celio* aps for internal use, for example an ap for our QC department so that they could take photos of garments and publish them on our internal social network where everyone can make comments. It took 6-8 months to see the result of the investment and then we decided to insource our e-commerce operations. At the same time we are considering joining digitial market places, such as those run by the Zalando brothers. We have no choice.”
How has the investment in the digital environment impacted the supply chain?
“We used to forecast based on historical information per country taking into account the time of the year, the promotional affect, etc. But in the past we were not forecasting accurately. Our forecasting volumes were wrong in 50-60 % of cases in terms of style or quantity and so we had to mark down product. We only sell 32% at full price yet we know we can make money by having the right products in the right quantities. With the digital environment we are entering a new era. I believe we can use the digital environment to improve forecasting by having our customers tell us what they would like to buy. We are reconnecting with the customer via our store staff because they decide the quantities. We call this ‘crowd-forecasting’.”