Increased cash awareness and common ways of working
Rossignol was founded in 1907, and is today a leading winter sports equipment manufacturer, with business including skis, boots, bindings, bicycles and apparel. Products are provided to the market under numerous brands such as Rossignol, Dynastar, Look and Lange. While having a global presence with sites all over the world, Rossignol is based in France and owned by private equity firm Altor.
The ski manufacturing business is by nature a highly seasonal business with a long operating cycle. While sales is mainly focused during winter, production is done during spring/summer. This led to an imbalance when it comes to incoming and outgoing payments and thus created a strained liquidity situation during parts of the year. Rossignol also had a legacy to focus more on growth and taking markets shares rather than working capital and cash flow, which was reflected in the organization by low cash awareness.
Furthermore, as production during the season is very limited – forecasting is key, both when it comes to hitting sales targets but also to avoid old stock. Since a large share of the assortment is replaced every year, thus lacking historic data, good communication between sales and operations is crucial. A formalized sales and operation planning process was only partly implemented leading to large differences in performance between business areas.
“We knew the issues we had, and together with Capacent the initiatives were leveraged to another level. The team came in with an external focus, but more importantly with expertise and long experience on the subject.”
Vice President Transformation, Finances & IT - Rossignol
The aim of the project was to establish a cash culture within the organization, establish common ways of working, and reduce working capital.
Following an initial define phase, where potentials were assessed and action plans set up, work streams with assigned teams were formed to cover all working capital areas, addressing both quick-wins and structural changes. A few of the main actions:
“The project with Capacent provided us with a foundation and structure to manage working capital. Together we made the change happen, and now the different teams within the company are working together to handle the pandemic crisis. Without the project we would be in a worse situation.”
The organization adopted a true cash culture and included capital effects in business decisions. Cross company collaboration and communication was improved and by the end of the project, monthly S&OP meetings were held in a structured way. Furthermore, important processes were formalized to enable common ways of working, and a working capital monitor was implemented to enable frequent follow-up of performance and transparency.
During the course of the project, the working capital performance was improving. However, the covid-19 pandemic hit the recreational business hard, posing new severe challenges for the entire industry to prioritize. Although facing these challenges, with customers being out of cash and unable to meet agreed payment terms, the improved working capital prior to the pandemic left Rossignol with a strengthened bargaining power towards financiers, such as banks.
“Together with Capacent we got our people onboard on the change journey. By supporting their action plans on facts and figures, they got us working towards a common goal.”
Do you want to know more about how we can support your journey towards improving your working capital?
Erik Påhlson is Managing Director and Working Capital Lead at Capacent_x in Sweden. Book a meeting below to discuss how we can support your journey or request a free WCM benchmark analysis to compare yourself to your competitors.
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