The watch industry is complex and many faceted. It has always faced challenges both from competition within as well as from outside market disruptions such as the ‘Quartz Crisis’ of the 1970’s & 1980’s. Then, it was upheaval caused by the explosive growth of cheaper quartz movements threatening the Swiss mechanical movement industry. Now it is the growth of ecommerce combined with outdated production and operation methods.
Perhaps, as the declines of the last few years have shown, the failure to evolve is the greatest enemy facing the industry today. Montrichard created the FINS watch manufacturing solution to recognize and solve these problems.
In this 5 part series, we examine the most troubling issues facing the watch industry today, the underlying cause of each and how implementing the FINS solution solves them for watch brands.
For the watch industry over the last several years, growth was measured by greater production and more sales to distributors. However, greater production doesn’t always indicate healthy growth. As the industry has changed, smaller watch companies and independent brands have slowly been consolidated into larger entities and business groups, which are bound by the demands of big business models that rely on never-ending growth as a catalyst for success.
In previous years, the luxury watch industry was buoyed by year on year increases in sales, predominately fueled by overseas exports to China and Asia. But traditional methods for driving growth – producing more watches, raising prices, opening more retail locations, doesn’t work in today’s over-saturated market. Fast expansion such as that which resulted from the boost in Asian sales, results in greater overhead and the need to produce inventory for markets that are yet to be proven.
Later, when a strong swiss franc hampered exports of Swiss watches, sales slowed down. That, combined with anti-corruption campaigns that took the bottom out of the Chinese sales that had artificially inflated demand, began a contraction that would be felt for years.
The results were serious – factories went silent, layoffs occurred, and overstock of completed watches lay dormant in warehouses. The reaction of the industry was costly. First, many companies resorted to deep discounts to move dead stock. When this failed to work, many were forced to make expensive buybacks from retailers and distributors. Mass production had created new factories and bloated inventories, hurting cash flow and tying up money.
As 2017 witnesses the glimmer of recovery, there is a great opportunity to learn from the mistakes of the past and use newly available resources such as FINS to address them. FINS is the 1st Cloud ERP solution created specifically for the watch industry supporting Just-In-Time manufacturing.
Making Growth Sustainable – FINS creates sustainable growth by boosting profits. It uses the latest in Lean Inventory and micro-manufacturing that immediately reduces inventories, streamlines production and frees up cash flow. It has ecommerce solutions for direct sales to consumers and efficiencies for distributors.
The results are greater margins across collections, lower production costs, and a completely integrated sales and supply chain that delivers accurate forecasting and greater business intelligence data. Brands that use FINS run leaner, are more profitable and remain flexible and able to respond quickly to changing market conditions, protecting them from present and future market volatility.
Register to try out our fully functional online live demo to see exactly what you get with
the FINS manufacturing software solution for the watch industry.