Tag Archive: cash flow

Let’s Manage Inventory for Our Customers

May 16th, 2019

inventory managementAmazon is propelling this age-old topic into a new realm. Since the CEO of the Ontario Airport Authority used the phrase “last mile” has become “last minute” on a panel I facilitated last year, I have shamelessly reapplied his brillant quote.

If customers don’t even know what they want, how can we? Interestingly, we have found that many customers, even the seemingly most confused and  volatile ones, have a pattern to their demand. If we take a holistic view of their demand and inventory planning processes from beginning to end and from high level to the minute detail, solutions emerge.     

One strategy that has proven quite effective is to “remove the middleman”, the customer himself. Instead, with access to demand information direct from the customers’ customer or end user, you can not only manage the extended supply chain inventory better for a happier customer but you also can improve margins, efficiencies and cash flow to boot.

In consumer products circles, this strategy often termed, vendor managed inventory is usually dictated by the “big guys”.  In aerospace, it is also expected but termed differently, customer based ordering, min max and other names. It is also common in healthcare as we won “supplier of the year” for two years in a row because of what we accomplished with VMI for Cardinal Healthcare when I was VP of Operations at PaperPak. We decided to make it a strategy for key customers at PaperPak, even though Cardinal is the only one who requested it. Should you consider a strategy like this to get ahead of your customers’ demand?  It is just another aspect in creating a resilient supply chain. Check out our series on the topic.

 

 



Time or Money – Which Gets the Priority?

July 11th, 2017
delivery

Customers have come to expect instantaneous delivery. Here are 7 questions to consider when weighing time vs. money.

In today’s Amazon-impacted world, we believe in instantaneous delivery. It has become an expectation. Even my mom who orders on Amazon by calling me believes a two-day delivery is a bit long. After all, she might not realize she needs something until the last minute. Thus, which is more important – time or money?

Here are a few questions to ponder when thinking about time vs. money:

1. Do you expect rapid deliveries across the board?

2. Are you willing to spend extra money for speed? Are your customers? Do you know this answer or are you guessing?

3. How important is cash flow to your business? How long is your supply chain? Regardless of how well inventory is managed, how much will be tied up by virtue of your supply chain design? How does that compare with delivery expectations?

4. Have you thought about investing in your demand plan instead of into inventory to be better prepared to deliver quickly without sinking cash into what is likely to become slow moving inventory?

5. Have you thought about investing money into strategically placed inventory? Having what your customer needs when they need it might be the difference between success and failure.

6. In your business, can you have time AND money?

7. What other types of time and money are you overlooking?  Get the full picture before jumping in.

 

Did you like this article? Continue reading on how to be the Strongest Link in your organization:

Slashing Lead Times to Counter the ‘Amazon Effect’

Lean or No Lean, a Demand Plan is a Must

 



Case Study In Increasing On Time Delivery Performance

February 14th, 2017
on time delivery

Do you have a bottleneck that is impacting service to your customers? Finding the source and fixing that bottleneck will accelerate improvement and customer service.

Situation: Our client struggled with low customer service levels since they cut back with inventory on the ‘wrong’ items during a time of tight cash flow. Of course to add fuel to the fire, the customer also wanted product to be delivered at least 20% earlier, ideally 50% earlier.

If our client didn’t find a way to respond quickly, they would risk losing key customers.

Path Forward: Upon looking at the order fulfillment flow, there were countless areas of opportunity. However, simultaneously working on these solutions would tax already-maxed out resources (who also were frustrated by angry customers) and accomplish nothing.

If everything is a priority, nothing is a priority. And, if you wait for all the details to align perfectly, you’ll start long after your key customers start looking to replace you. Instead, take a step back and do nothing except observe and take a fresh view of the people, processes and systems. Where are the vulnerabilities? Undoubtedly, each person/department will have a pet project. Eliminate all the noise and just look for the bottleneck.

Of course there could be more than one bottleneck but there will be one that is most significant. Start there. Find the source of this bottleneck and put all your resources on eliminating that bottleneck. If the bottleneck is in a particular area of your operation, the related supervisor is the most important person in the facility. If she/he needs help on a Saturday, everyone from the CEO to the line manager will find out how he/she can help. Solving these one at a time will accelerate improvement in delivery performance.

 

Did you like this article? Continue reading on how to be the Strongest Link in your organization:

Slashing Lead Times to Counter the Amazon Effect 

Is Your Supply Chain Ready for Growth?

 

 



SIOP Success is a Straight Line to People

May 26th, 2016
SIOP success

The technical aspects of SIOP still have to filter through people. Success happens when everyone in an organization is operating from a single integrated plan.

As with everything in business success, SIOP (sales, inventory and operations planning) success is a straight line back to people. Thus, it is the reason I started my business with the “Profit through People” brand and continue with it as one of our service lines and for our newsletter. In the last 5 years, we have completed many SIOP projects and have found the keys to delivering rapid, bottom line results – exceptional customer service, significant growth, improved margins, accelerated cash flow and high morale. These keys to success are built into our proprietary process for SIOP, 4 EXCEL, which drives exponential results.

Even though SIOP is all about aligning demand with supply and has many technical components ranging from demand planning to master scheduling to inventory strategy and cash flow planning, we have gained the most significant results by aligning ALL areas of the organization on one page – the PEOPLE! There is no coincidence that the first of the 4 E’s of EXCEL is ENGAGE.

Some of the most challenging issues we’ve faced while implementing SIOP had nothing to do with the technical components. For example:
• How do we get sales and production on the same page?
• Can R&D and production work to one integrated plan?
• How can we align our customers and suppliers on the same page?
• How can we get finance, sales and operations on the same page?
• And so on…

We find that becoming expert in culture change and collaboration is important to success. Clearly, communication is at the crux of this equation as well. If you are thinking about how to get each of these parties to see how SIOP will benefit them to align on one page, give us a call to learn more about 4 EXCEL.

Did you like this article? Continue reading on how to Profit Through People:

4 Excel for SIOP Success

Why Are Communications So Difficult?

 



Why Planning is at the Crux of Success

May 25th, 2016

IveBeenThinkingBlog-1024x459

I just had a brainstorming session with one of my key clients about the integrated planning process — in essence, how demand and supply match up to ensure customer service (which is #1 for every client in today’s environment), growth, and improved margins and cash flow. It almost doesn’t matter the reason I come into a client — and the reasons can be wide ranging — there is always opportunity to improve the integrated planning process, get everyone on one page with clarity and sync up demand with supply. It sounds much easier to do than it is in reality. Yet it is vital!

Some of the results I’ve seen with this focus include the following: 1) Improved service levels from the low 60%’s to the high 90%’s. 2) Reduced lead times by 30-70%. 3) Reduced inventory levels by 30-60% while maintaining service levels. 4) Improved margins and reduced costs substantially — by millions of dollars, 5-20% and so on. 5) Improved employee engagement — probably the most important of all as happy employees not only ensure happy customers but they also are much more likely to be innovative in growing the business with new products, increasing margins, etc.

One tip to implement this week:

The good news is that there is a LOT you can do this week to improve your integrated planning process. If you are a leader, simply ask questions about this process of the people involved in these areas, customers, suppliers, etc. Listen for common threads. Undoubtedly, you’ll uncover an opportunity or two, low hanging fruit and the like.

If you are “in” the process, take a step back and think about the inputs and outputs of your process. Of all the items on your to-do lists and priorities of customers (both internal and external), which inputs really matter — and are NEEDED to gain the right outputs (results)? Answering this question can be the 80/20 to success.

Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”