How Pandora Built Its Value Case for Transformation

Summary

Pandora is undergoing a significant transformation with its 'Hero' program, focusing on harmonizing, elevating, and optimizing its planning processes across the value chain. By integrating digital solutions and transitioning from a wholesale model to a fully integrated retailer, Pandora aims to improve product availability, drive higher conversion rates, and enhance profitability. The company is leveraging new technologies to scale its operations while remaining flexible to market changes. With implementation set for 2025, Pandora expects substantial improvements in efficiency, cost management, and sustainability as it expands its presence in the accessible luxury market.

Takeaways

• 😀 Pandora's transformation journey is focused on end-to-end planning, with a program called HERO (Harmonized Elevate, Respond, and Optimize).
• 😀 The company chose Onine as its future partner for this transformation, aiming to enhance planning capabilities.
• 😀 Pandora is the world’s largest jewelry brand, selling over 100 million pieces of jewelry annually, with a revenue approaching 4 billion Euros.
• 😀 Pandora’s corporate strategy, Phoenix, aims to be the largest and most desirable brand in the accessible jewelry market, focusing on growth in core markets and new ones like Japan, Korea, and India.
• 😀 A key element of Pandora’s strategy is expanding product personalization options, including engraving on jewelry.
• 😀 Pandora's business operates on a fully vertically integrated value chain, with 80% of its distribution and manufacturing in-house, presenting significant potential for effective planning.
• 😀 The HERO program is designed to integrate planning across Pandora’s stores, manufacturing facilities, and distribution networks to enhance decision-making and operational efficiency.
• 😀 Pandora’s shift from a wholesale manufacturer to a fully integrated retailer relies on becoming sellout-driven, rather than sell-in-driven, to align with consumer demand.
• 😀 The transformation includes upgrading several systems, such as warehouse management (WMS), transportation management (TMS), and manufacturing execution systems (MES), along with the implementation of Onine for planning.
• 😀 Pandora has worked on maturing its planning processes for years, improving coordination between departments like merchandising, supply chain, and crafting to optimize operations.
• 😀 The value case for the transformation is tied to product availability, with a strong focus on the top and bottom-line impact, including improved revenue conversion, inventory management, and cost avoidance, while also reducing CO2 emissions.

Q & A

What is the main goal of Pandora's transformation journey?

The main goal is to transform Pandora's end-to-end planning processes by replacing fragmented solutions with a single integrated platform, enhancing decision-making, and improving product availability while aligning with the company's growth strategy.

What is the significance of the 'Hero' program in Pandora's transformation?

The 'Hero' program, which stands for Harmonized Elevate Response and Optimize, is a central part of Pandora's planning transformation. It aims to integrate planning systems across the value chain and focus on becoming sellout-driven instead of sell-in-driven.

Why did Pandora choose Online as their technology partner for this transformation?

Pandora selected Online after a careful selection process because of its ability to provide the digital solutions needed to support Pandora's integrated planning and supply chain transformation. Online's platform will help streamline operations and improve overall planning capabilities.

What are some key facts about Pandora's current operations and scale?

Pandora is the world's largest jewelry brand, with over 100 million pieces sold and produced annually. It has close to 4 billion Euros in revenue, employs 33,000 people globally, and operates its own crafting and supply facilities, particularly in Thailand. It has also achieved a milestone of sourcing only recycled silver and gold for its jewelry.

How does Pandora's corporate strategy, 'Phoenix,' align with the transformation?

The 'Phoenix' strategy aims to establish Pandora as the largest and most desirable brand in the accessible luxury jewelry market. It focuses on expanding the product range, entering new markets, and enhancing personalization options for customers. This strategy requires efficient planning and operational excellence, which is where the transformation comes in.

What is Pandora's unique operating model?

Pandora’s operating model is vertically integrated, meaning they own 80% of their distribution through their stores and control the majority of their manufacturing. This integration gives Pandora the opportunity to optimize and leverage their planning across all stages of the value chain.

What is the role of digitalization in Pandora's transformation?

Digitalization plays a crucial role in Pandora's transformation by enabling advanced planning solutions. The company is implementing various digital tools, including a new ERP system, WMS, TMS, and manufacturing execution systems, to improve operational efficiency, scale, and planning capabilities.

How does Pandora measure the success of their transformation?

Pandora measures success by focusing on key supply chain metrics like forecast accuracy, inventory turnover, and product availability. The company also emphasizes converting these improvements into tangible financial outcomes, such as revenue growth and cost savings.

What is Pandora's approach to the value case in their transformation?

Pandora’s value case focuses on improving product availability and inventory management, which directly impact conversion rates and revenue. By calculating the financial impact of these improvements, Pandora ensures that investments in planning technology are justified and can lead to long-term business growth.

What is the timeline for Pandora's transformation program?

Pandora’s transformation program is ongoing, with the blueprint and design phases already completed. The first phase of the program, focusing on replenishment, demand planning, and supply chain capacity, is expected to deliver its first release in Q2 of the following year, with additional updates throughout 2025.